Selling as an Amazon Vendor

[Jayser100]

So, having sold products as a third-party seller for five years, we're now selling to Amazon as a vendor partner and the jury is still most definitely out for me as to whether it is going to work. We are trialling 20 products until Christmas on their 5% marketing package.

It is clear they are getting all the sales on those products now but all I can see at the moment is a sales ledger growing with thousands of pounds owed to us by Amazon that won't be paid for 60 days.

Does anyone else who now sells to Amazon have any feedback as to whether they think their sales increased (as Amazon say will happen)?

A key feature of selling to Amazon is supposed to be that your products rank higher in search but I'm not seeing that. I am also not impressed that they have made ridiculous titles for the sunglasses, with the size of the frames shown (i.e. 13cm x 4.5cm x 13cm), as if anyone chooses a pair of sunglasses based on the size of the frame! I did point this out to our point of contact at Amazon and she said she would get it changed but that was weeks ago and nothing has been done.

Look forward to your comments.

 

[profscooter]

I tried Amazon Marketplace for a while but their cut on the sale made it impractical to use for anything other than stock I just wanted to get rid of at any price. And for that purpose I find Ebay better. At the moment, given all the Amazon tax concerns in the press and the damage they can do to small businesses I'm having a bit of an anti-Amazon phase, buying elsewhere wherever I can.

 

[amac]

I tried Amazon Marketplace for a while but their cut on the sale made it impractical to use for anything other than stock I just wanted to get rid of at any price. And for that purpose I find Ebay better. At the moment, given all the Amazon tax concerns in the press and the damage they can do to small businesses I'm having a bit of an anti-Amazon phase, buying elsewhere wherever I can.

This makes a lot of sense. Those platforms (Amazon, Ebay) are good for starting out in ecommerce i.e you'll learn the ropes of inventory, pricing, marketing etc. Reality is, as you've mentioned, you want to migrate eventually to your own platform once you've build the customer base, reputation, technical resources, warehousing etc.

I run a store that still sells on Amazon though I'm moving customers towards my own site more and more all the time.

 

[Jayser100]

Thanks for your input, although with respect, you didn't actually answer my basic question (I need someone who sells directly to Amazon to do that).

Regarding the points you raised, we do have our own website as well, plus I sell on eBay and all of the other Amazons except China and Japan (for language reasons). I therefore have many different sales platforms and I also sell to trade, so I don't rely on any single one, which of course is good.

Having said that, Amazon UK has brought in the most money out of them all and so it is important to me that I get it right. It was a borderline decision as to whether I should go for selling to them once they approached me, as I always suspected the benefits to them would be far greater than they would be for me.

The sunglasses have always been discounted on Amazon, but at the full RRP's on my own website to keep the dealers happy but as the trade side is now minimal compared to the old days (since the credit crunch) I have now also dropped the website prices to match Amazon, so that as few people as possible go and buy on the latter just because it's cheaper. The website sales have of course increased as a result and I do intend to concentrate far more effort on basic SEO and content on the website to maximise sales there.

At least I have the option of drawing the line under selling to Amazon at Christmas if it doesn't show me any real benefits - then, I will be able to get them off the ledger for good!

Thanks again

John

 

[kulture]

Once I did see a thread on this forum somewhere regarding the perils of being an Amazon supplier, but I cannot find it.

From memory the possible pitfalls were

- who pays for customer returns
- what about damaged stock when it arrives
- what about mis counted/missing stock when it arrives at amazon
- them undercutting your own prices and selling at a loss and cheapening the brand

 

[Mister B]

Our story is almost identical to yours...we started as normal 3P sellers, migrated to FBA and now we're being chased to sell direct.

We've now been approached four times and each time we've said no despite all of the sales pitch...ok so sales may increase but we have to work on a reduced margin and let them hold onto the cash for sixty days. But the biggest concern for us is that if we were to supply them, we will then lose control over one of our biggest sales avenues which is not something that we are prepared to do.

Out of curiosity, did you see the uplift in sales that were promised? We were told to expect an uplift in sales of around 25%

Mister B

 

[threenine]

60 days payment and margin squeeze! I personally would tell amazon to PFO.

You're basically financing them, in effect you're giving 2 months financing for a modest 25% increase in sales!

You could get far better returns as a payday loans company! ;-)

 

[Toon]

I am an Amazon "Vendor" but went straight into that rather than as a "Seller".

The way I see it, some of our other stockists pay in 60 days anyway so that never really bothered me. They do take quite a lot in terms of early settlement discounts (60 days), marketing budgets and other expenses that probably adds to over 10% but the thing that really annoys me is that they can order say 10 of something at a time, which we may need to order in from our supplier, then a month later they will return 9 of them! This means we've had to pay for the stock from our supplier and there's no guarantee we would sell these products again. Now we could have a situation where we've too much stock in our warehouse!

 

[greengecko]

60 days payment and margin squeeze! I personally would tell amazon to PFO.

You're basically financing them, in effect you're giving 2 months financing for a modest 25% increase in sales!

You could get far better returns as a payday loans company! ;-)

With us it has been a far different story with Amazon, we invoice on a certain date each month and average payment time is 27 days (despite being on a maximum of 60 days). We also get a greater profit from selling to Amazon directly, mainly because they increased the fees from 7% to 12-15% on some items we sell.

 

[blueboy]

I sell on amazon merchant fulfilled, fba and started vendor about a month ago. At the moment amazon are happy to buy at very close to RRP and sell at RRP, so overall the commission is a lot less than the 12% + fba fees i'd pay otherwise on amazon.

So far it seems like a good deal apart from the time it takes to process the paperwork, which at the moment outweighs the advantages but hopefully that will change in future as the order sizes grow, and their payment terms are within 60 days or 30 days for an extra 1.5% commission which is a bit of a drawback. I'm not convinced that vendor gets more sales than FBA, but certainly they both get more sales than merchant fulfilled.

 

[Greengardening]

Any update ? We are now at same question, were asked to trade as vendor. so far selling on Amazon from our own warehouse.

I am not sure what price to offer Amazon as a vendor and what sales to expect.What is your experience so far, please.

 

[cshaw]

We've been selling through Vendor Central for almost 9 months, and it's not been a good experience. We trialled with just 150 of our lines, and things started encouragingly. Around 28% increase in turnover. But the last three months saw no change in our turnover from last year, but with added headache of big hole in cashflow, extra staff costs to help pack up massive orders with short lead time (and no prior indication of what was coming, so impossible to ensure stock levels are correct), lots of smaller orders all the same but with split deliveries to different FCs so carriage costs make them unworkable, fines totalling £2000 for missed appointments by carriers (Amazon rules crazily strict and unreasonable - kept our carrier waiting for two hours once and still fined us £500!), refusal to acknowledge our requests to increase any prices, and more. Upshot is we are practically on our knees, and our Happy New Year from the head of dept was to practically double all our fees! So now ALL our prices need revising! The best new fee is a 6.4% annual rebate on our turnover with them, so they can share the benefit of the 'savings we have made with our economies of scale' since selling on the VC programme. Ha! VC might work for you if you have stock you can pull easily off the shelves and on to pallets, nice high margins, a big wodge of cash in the bank. Otherwise, think very hard.

 

[blueboy]

Our experience has been similar to cshaw, less commission than fba / fbm but lots of extra admin/packing work, support from amazon isn't as good and loss of control of retail prices. we've gone back to fba for most of our lines.

 

[samuel5]

We used to sell direct to Amazon but reverted back to FBA for full control of the Amazon market.

We had the same issue with Amazon messing up the images, titles and descriptions when they stocked our products.
And you loose all control of the ASIN.

Also, they can completely devalue your products as they do not seem to care about profit margins!

 

[Greengardening]

Many thanks to you all , very appreciated.
I understand that no need to get too excited from this "opportunity "from Amazon.
They never seems to be care too much on the seller side, his benefits/ margins. I think we may use it for few items only . Your answers are well appreciated!! Thank you samuel5, blueboy and cshaw .

 

[Greengardening]

Another very interesting question , does anyone sell on ecommerce and use the Amazon advertising to get customers to the ecommerce ?. In theory it seems safer and more profitable , are there any pitfalls . What rate of converting can you get from it ? Once again many thanks, ahead

 

[Kylelewis]

is there any affiliate's type of work?

 

[BigTimeTrader]

interesting, I have not had experience but I am a 3rd party retailer reseller. Not a brand or manufacturer supplying trade etc.

Some of our suppliers do not like supplying Amazon direct due to their terms and conditions, like said above, the fines for mis-delivery slots. The 60/90 day credit, retrospective discounts, sale or returns and split carriage paid orders to multiple FC's.

The big suppliers who are used to dealing with multiples such as: Argos, Debenhams, NEXT etc will advise Amazon to have their own similar product.

i.e. a red widget in a red box is standard so like they do with the multiples they will only supply if they confirm a Minimum Order Qty of say 1000 units but it will be a burgundy widget in their own branded burgundy box. (same item from same factory just very slightly different in their own box, this is therefore incomparable to their standard red widget item).

A supplier of watches was telling me that they have a member of staff logging into VC and they have to provide images, descriptions etc.

I laughed - not only are Amazon playing extreme hardball bully with their t&c's but they are getting the supplier to do all the work!

Still in trading this is nothing new, it is a known fact that "big" businesses can bully small. Look at the current price wars with supermarkets affecting the dairy farmers.

If it were me, I would only supply them with a limited amount of SKU and it would be on my terms, not theirs.

 

[Jayser100]

Great thread this, and it is interesting to see that others share my poor experience of being an Amazon Vendor. We haven't supplied them since September, but they are still in the last doings of shaf*ing us - they have just 'cancelled' an order for 21 pairs of golf sunglasses they say we never sent them, and which they had showing as outstanding on their system. We have NEVER not sent them anything they ordered. I reckon we've written off at least 100 pairs of sunglasses we shipped them on various orders, that they claim they never received.

They will give you a very hard sell if they want your products. They will tell you what a wonderful seller you are, how great the products are and how they would love for you to be an Amazon Vendor. Don't be taken in by the constant flattery. Do what is right for YOUR business and not theirs. If you are a successful third-party seller, trust me, you don't need them.

 

[Hanloumac]

After an excellent 18 months selling through seller central, we were approached by Amazon, at the same point our sales fell through the floor (coincidence???). We had been selling 30 lines, but they wanted our entire 9,000 line catalogue. After 6 months of painful product submission (we only managed to upload 500+ products), ridiculous fines for delivery issues and the most depressing job for any member of staff dealing with this account, we backed out. Our accountant declared the whole nightmare hardly made us a penny. If you are having success with seller central I'd stay well away from vendor central. We have since reverted back to seller central and things are looking good again.

 

[Brian JW]

Hi I am a first tier Vendor to Amazon

After a reasonable two years the last four years have been an absolute nightmare, Vendor Central, is manned by a handling house in India, and sorry i don't care how this sounds, its the basic truth, they are either stupid, don't understand English, are or are unable to think for themselves, all you get is cutting and pasting of the Amazon bible.

My advice do not become a Vendor stay in your market place,

Their own system screws up on a daily basis, for example we get these messages everyday:-


The following item(s) will be CANCELLED from the Purchase Order(s) listed on the date(s) mentioned below. If these item(s) are still current in your system and are in process of being shipped, please notify us immediately.


If the items have already shipped, please raise a Contact Us and include the carrier tracking information.





PLEASE CONFIRM YOUR RECEIPTS OF THIS NOTIFICATION IN 24 HOURS.


If any item listed in this notice is shipped, then Amazon retains the right to return the stock at the vendors expense.

then we have to go through it send PODs ALWAYS the product has been delivered ALWAYS!
many times the items has been delivered months ago the best one last week was they something should have been delivered on the 1st September, 2015 it was actually delivered 1st September 2014.

Our products have suddenly started displaying the packed product size rather than the Actual products size, bear in mind the product has been displaying properly for 3 years!

They say (here comes the Amazon bible reply) "If you have recently updated your products please submit the details visa the "add new items" on Vendor Central.

We are restricting a lot of what we allow them to have, winding back to the point where i will stop supplying them.

Their returns is a joke, "aged returns or over shipped goods", now we allow single item ordering but they say your over shipped items we be returned (our expense of course) they order the damm things, but when they are returns items in 2015 for 2011, thats taking the you know what.

We have bigger customers than amazon with their own market place on amazon, we do far better with them than Amazon, they will be getting a price list of 20% increase in prices, hopefully this will stop them ordering

Truly truly truly, they are not worth the work, great to get you established, the after the undercutting of other customers etc, pull away.

I would be more than happy to speak to anyone about our companies experience PM me we can swap numbers & yo can have no frill basic facts

Best Regards Brian, (the overweight balding manic depressive Amazon Vendor in the corner)

 

[Mark Williams]

Hello,

I found this thread via a search engine and thought I had to sign up for UKBF to share my ordeal with Amazon.

The company I work for were invited to join Vendor Central under the Stationery & Office Supplies category. Our experience with Amazon as a company is very limited, as we do not sell to the public, but our products are on the Amazon marketplace through several of our trade customers which are Amazon sellers.

In January 2015 we listed 100 lines using the Stationary & Office Supplies template, whilst using the 'Contact Us' system to identify if we were in the correct category. We felt that we were more suitable for the Toys & Games category rather than Stationery & Office Supplies, because at the end of the day our product is bought for children to decorate bedrooms, books etc etc. We were told directly by the buyer for Toys & Games that we can in future list our products in both categories and be given access to the template for uploading to both.

Initially sales were very slow, and similarly to the frustrations of other people that have posted, orders are stagnated and required to be shipped to various DC's up and down the country. The MOQ for our products is 12 and the trade price for our most popular format is £6.36. Amazon would order 12 of those for delivery on a required date which costs £5 with our courier - eliminating any kind of profit.

Sales increased over time as more units were added, but that leads to the ability for more mistakes to creep in. Amazon warehouses suddenly changed their systems and started processing our pre packed product as 1 unit rather than 12. We believe that the workers at the DC's just scan the back of one packet and think they've done their job - despite us placing a label in capitals saying 'AMAZON - PLEASE PROCESS AS 12 UNITS.' Similar to Brian JW's post, we would receive countless emails from Amazon saying they would be cancelling the remaining 11 units (after only processing 1 of the pack of 12) which leads to disputes for invoicing and fulfilment. When this occurs, you have to submit a POD to Amazon. Our issue is, there is no dispute of delivery, it is that Amazon have incorrectly counted the number of units! We are currently disputing upwards of 20 invoices, overall it just seems like a spiteful way of Amazon getting more than what they are going to pay for.

The most distressing part of all of this, is the Vendor Account Manager and Contact Us. We have an email address which we use if we are in need of assistance, and the response is always - Please raise a Contact Us if you need help. Our very own Account Manager, effectively tells us to leave him alone and use the merry-go round system of the Contact Us which is correctly documented on previous posts. When raising a Contact Us, you will receive a fairly quick response, pasted from the Amazon bible that 'they are forwarding the case to the appropriate team and will contact you shortly'. Then there is the fun part of twiddling your thumbs waiting for the 'appropriate team' to look into it. I have once waited 27 days for a response, and it was to suggest that they wouldn't help me with the issue I was having.

To summarise, Amazon Vendor Central has been a complete nightmare from start to finish. We decided to try it because Amazon increased their fees to their sellers to 40p or 20% of the sale price, when you consider our products' RRP of £1.25 it leaves our sellers making no profit whatsoever. As a result, we have not received anywhere near the number of orders now through AVC as we were with our sellers last year. Amazon DC's constantly get the number of units received wrong, and you as a company take the fall, not them. The Account Managers are ghosts, and the Contact Us system is just useless. Not worth the hassle of constantly chasing something incorrect up, with the false hope that they will actually sort it out.

I would be happy to speak to anyone about our experience too, please PM me.

Thanks,

Mark

 

[Iain Hill]

Hi Mark,

Sounds like you have had a few problems with Amazon! It can be extremely difficult to operate under the types of margins you have as any errors or mistakes (by Amazon on this part) can be extremely costly. There are other fulfilment houses around (I do work for one) which may be able to help, we have account managers that will reply to enquiries immediately and we have systems that would be able to cope with a box of 12 for example being picked as a box of 12.

I have heard some good things about FBA and that they will help you with the buy box etc. and the volume of sales will increase, but I have also heard of a lot of bad experiences like yours. Amazon are so big that sometimes they just seem to be able to act as they please, which can leave companies like you in a difficult position.

I appreciate that Amazon is one of the biggest, have you thought about any other sales channels (also mentioned by Brian above). There may be some out there where you can increase margins and have more control over the sales/fulfilment side of things.

I appreciate that you may have thought of the above and don't want to tell you how to suck eggs, however all I would say is that you are not the only one that has had this type of experience (although that may be little consolation) and if I can be of any help on the fulfilment side of things (even if it is a general question about the market) please do not hesitate to send me a PM.

Many Thanks,

Iain

 

[Brian JW]

Well "Holy old post revival Batman" well 3 years hence & Amazon are a complete utter shower.
The chargebacks that have been introduced, are complete fabrications, as im the type that wont give up on a principle, ive been badgering "Contact Us" to the point Ive been asked to stop raising cases, as the are utterly incompetent, but mainly liars!, im turning it on themselves, cutting and pasting from the Amazon Bible / Manual.

Now we get chargebacks for "Carton None Compliance" which has been confirmed is not correct, after one particular showdown, ALL our carton None Compliance's are set to be "Waived", basically you can be as brusque and direct with them as you want the never bite back, which due to my wicked sense of humour, has afforded me some light relief.

We even had a chargeback for a product we rejected at the PO stage (as they keep ordering it incorrectly, basically they swapped 2 ASINS & EAN & SKU number around that they cant get right after 3 years)

I have listed some of our new range but quickly made it unavailable as they keep getting the listing wrong, the title, the colour, missing the brand off, something set up as weighing 0.32 kg (a pillowcase) is displayed as 75kg!!!

The turnover is really very poor with them, since they have introduced all these "Vendor Performance Improvements" you spend more wasted time sorting issue with them, than frankly its worth.

We have a customer a lady who works out of her house,with her Amazon storefront, we do DD for her her turnover is some 6 times greater! as are our other customers that list on Amazon, they all do better tan Amazon themselves. we are listed with Wayfair, who still have system issues but the turnover is astronomically better & i have a great relationship with them in London, Ireland & Berlin.

MY advice if you have listed with Amazon, for more than 4 years, keep a few items on there, but keep a lot away from them, its less pain in the end, and dont be frightened of tackling them head on, threats to delist, reject orders usually result it rapid attention ha ha

regards Brian

 

[Pish_Pash]

The amazon chargeback that really irks me, is the one for not meeting their delivery deadline

Each time, I'm pretty convinced UPS have tried to deliver but the Amazon fulfilment centre won't provide UPS with a delivery bay slot...then for whatever reason UPS either back off (then too many delays elapse = chargeback) or more likely, Amazon just keep refusing a delivery slot = chargeback.

So you have the bizarre situation where Amazon fine me for missing their set delivery deadline (5 days from giving me thier PO), but the reason I keep missing their set deadline is because they (Amazon) won't provide a delivery slot at their fulfilment centre in time.

Kerching.

 

[Deniz Olmez]

I definitely suggest the Seller Central, especially because of minimum advertised price (MAP).... Amazon says that it will honor your minimum advertised price (MAP) requests. However, Vendors are always complaining that Amazon rarely does so. We should remember, they also promises to their customer to match any other seller's price, Amazon will follow the sellers which are not following automatically. You can still use Amazon warehouses as a seller (FBA) if you don't have fulfillment option.