In the last week, Amazon.com has been reported to have discontinued its routine orders from thousands of brands that, until now, sold their products directly to Amazon through Vendor Central. This activity signals a potential fundamental change in the landscape of Amazon sales.
Companies can either sell products directly to Amazon (for Amazon to resell to customers through its Vendor Central system), or they can sell products themselves to consumers on the Amazon marketplace through the Seller Central system. When companies sell to Amazon, they are able to shift storage and shipping costs to Amazon and maintain Amazon as an authorized seller. Amazon’s apparent decision to move away from selling a number of brands through Vendor Central suggests that the third-party marketplace will only continue to grow in terms of size and strategic importance to brands.
Impacted brands are likely realizing that they will have to quickly redirect their sales through Seller Central. These changes will further require brands to be more vigilant than ever in terms of addressing unauthorized sales of their products by third-party resellers, as they will no longer be able to benefit from any inherent buy box advantage maintained by Amazon’s 1P products.
The implications of these reported actions are potentially far-reaching and, at this point, still unclear. In the coming weeks, Vorys eControl will continue to post about this topic and its ramifications on the Marketplace Solutions Blog.