There are two completely different ways of being on the shelf on Amazon. Everyone knows the first: you open a seller account and sell directly to the customer. The other is Vendor, and it works the other way round: you sell to Amazon, which buys your goods and resells them on its own account.
It is the difference between what the industry calls 3P (third party, the marketplace) and 1P (first party, the supplier). Everything changes: who sets the price, who owns the stock, who talks to the customer and, above all, who keeps the margin.
What Vendor Central is
Vendor Central is the portal through which a supplier manages the commercial relationship with Amazon. It is a separate environment from Seller Central, with its own logic and its own tools.
The mechanism, in short: Amazon issues purchase orders, you confirm them and deliver the goods, Amazon pays according to the agreed terms and then sells to the end customer at whatever price it decides. The product page says «sold and shipped by Amazon».
You do not apply for Vendor: you are invited. Unlike a seller account, which anyone can open, the programme is reserved for brands and manufacturers Amazon selects. This is also why the operational documentation is only accessible after the invitation: if you are looking for the detailed terms without an account, you will not find them published.
Vendor and Seller side by side
| Vendor (1P) | Seller (3P) | |
| Who sells to the customer | Amazon | you |
| Who sets the retail price | Amazon | you |
| Who owns the stock | Amazon, once it has bought it | you, even when it sits in a fulfilment centre |
| How you get in | by invitation only | open registration |
| Where the money comes from | wholesale margin on the transfer price | retail price less fees and logistics |
| Relationship with the customer | none: the customer is Amazon’s | yours, including service and returns |
What you gain by moving to Vendor
- Volume in single orders. Amazon buys in batches: the sales forecast becomes a purchase order, and production is planned against it.
- Less day-to-day operation. No shipping to end customers, no returns, no customer service, no disputes.
- The «sold by Amazon» badge, which in some categories measurably affects buyer trust.
- A commercial counterpart instead of a dashboard: the relationship moves from procedures to negotiation.
What you lose, and should know beforehand
In our experience running both Seller and Vendor accounts, this is the part that surprises people arriving from the marketplace.
- Control of the retail price. Once the goods are handed over, Amazon sets the price. If it lowers it, your brand positioning on other channels suffers — and you have no direct lever to stop it.
- The margin. You move from a retail margin to a wholesale one: the arithmetic has to be redone from scratch, not adapted.
- The deductions on the invoice. The gross revenue agreed and the amount actually banked diverge, through a series of contractual allowances that stack on each other — set out one by one below. This is the line most often underestimated during negotiation.
- Dependence on a single customer. If Amazon cuts or stops ordering, you have no direct channel already running to fall back on.
- The data. The end customer belongs to Amazon: what you know about them is what Amazon chooses to show you.
That is not decided by reading a table: it is decided on your catalogue, with the margin per unit in both models placed side by side. We have worked on around 1,000 accounts across Seller and Vendor: we can run that comparison on your real numbers.
What a Vendor agreement is actually made of
This is the part you will not find explained anywhere, because the contracts are not public: they exist inside Vendor Central and are accepted with a click on «accept». What follows comes from the agreements we manage for our clients, reported in their standard form and without confidential data.
The relationship is not a single contract: it is a collection of separate agreements, each with its own number, that stack. The recurring types are:
- Base Accrual — the base allowance on revenue;
- Damage Allowance — an allowance covering damaged goods, so Amazon does not send the ruined units back to you;
- Internal Freight Allowance — an allowance on transport inside Amazon’s network;
- Co-op Activities and MDF — funds for commercial development and agreed marketing activity;
- returns handling — an allowance on processing customer returns;
- promotional agreements: vendor-funded coupons, flexible promotional campaigns, automated marketing;
- unsold stock agreements, with deductions on inventory not sold within a given period.
Each one is a percentage that is negotiated, and each one reduces what you actually receive against the nominal transfer price. It is the reason the agreed Vendor revenue and the money that arrives in the bank almost never match: the difference is these agreements, added together.
Three clauses worth knowing before you sign
Three elements recur in the standard form of these agreements, and they weigh more than they look:
- The counterparty is Amazon EU Sàrl, not the local subsidiary. It is a commercial relationship with the group’s Luxembourg entity — which matters for governing law and for who you are actually negotiating with.
- Renewal is automatic. The agreement has an initial term, usually annual, and then renews itself for 12-month periods on the same terms unless a new written agreement is made. It does not expire: it continues.
- Getting out requires at least 60 days’ written notice. If you notice in December that a percentage is no longer sustainable, it is too late: you are already inside the following year.
The right way to manage them is therefore to put them all into a single schedule — percentage, start date, and the deadline for giving notice — and review it at least three months before the annual renewal. That is exactly what we do for the brands we run, and in most cases nobody had ever done it before.
Renewal is automatic and notice is 60 days: if you notice in December that a percentage no longer works, you are already inside the following year. We put your agreements into a single schedule — percentage, start date, deadline to give notice — and review it three months before renewal. In most cases nobody had ever done it.
Can you run both?
Yes, and it is the configuration we see most often in established brands: part of the catalogue on Vendor, typically the high-rotation lines, and part on Seller, where you need control over price, launch and assortment.
The hybrid model is not free, though: it needs clear rules about which ASINs sit where, because the same product sold simultaneously by you and by Amazon creates internal competition on the same page. That is an assortment decision, not a technical detail.
How to work out whether it pays
The question is not settled with an opinion. It is settled with two numbers placed side by side:
- Margin per unit on Seller, net of referral fees, logistics and advertising.
- Margin per unit on Vendor, that is the transfer price less your costs, net of the allowances and deductions the agreement provides for.
If the second number is lower but the first requires an operational structure you do not have, Vendor can still make sense. If they are similar, Seller usually wins, because it leaves you the control. And if the first is clearly higher, the question becomes a different one: why be on Vendor at all?
That is the reverse journey, and we covered it in moving from Vendor to Seller.
Frequently asked questions
How do you get a Vendor Central account?
You do not apply: you receive an invitation from Amazon. There is no open registration process as there is for a seller account.
Can I have Vendor Central and Seller Central at the same time?
Yes, they are two separate environments and many brands use both. But you have to decide upfront which products sit on which channel.
Do I pay referral fees on Vendor?
No: on Vendor you are not selling to the end customer, so there is no marketplace referral fee. Your margin is the difference between the transfer price to Amazon and your costs, net of whatever the commercial agreement provides for.
Where do I find the operational terms for Vendor?
Inside Vendor Central, after the invitation. They are not published — which is why so much second-hand information circulates on this subject.
Does Vendor change anything if my company is outside the EU?
The counterparty is Amazon EU Sàrl regardless. What changes is everything around it: VAT position, the entity issuing the invoices, and the compliance obligations that fall on whoever places the goods on the European market. That is worth settling before the first purchase order, not after.
If you already have the Vendor account and are looking for someone to run it — terms negotiation, chargebacks and deductions, Co-op and MDF, content and campaigns — what we do is on the Amazon Vendor Central management page.
If you are weighing the move
Vendor and Seller are not a better and a worse: they are two business models with different arithmetic. The wrong choice does not show immediately — it shows six months later, when the margin does not add up, or when the retail price has dropped below the level you were holding on your other channels.
We have worked on Amazon since 2011 and we run both Seller and Vendor accounts. If you want the two numbers put side by side on your real catalogue, write to us: the first 30-minute call is free and exists to establish whether we can be useful.
A note on sources: the portals mentioned are Amazon’s official ones. The economic and operational terms of the Vendor programme are not public and are communicated by Amazon to invited suppliers: the observations on margins, deductions and price control come from our experience running these accounts, not from published documentation. Always check the terms of your own specific agreement.
Let us compare notes: a free 30-minute call to establish whether we can help.
