Why Brands Are Shifting Strategies for Amazon
Julie Stewart • September 13, 2019
Uncertainty about changes in Amazon’s Vendor Central operations is the main reason why brands are shifting strategies for Amazon.
Earlier this summer, Amazon curtailed purchase orders from brand wholesalers in its Vendor Central program, in some cases without resuming, and in all cases without explanation.
This sent waves throughout the Vendor Central community. Brand e-tailers had been accustomed to the continuous flow of orders from Amazon which they’d enjoyed in exchange for giving up some measure of control over their pricing and product listings.
For more on the differences between Seller Central vs Vendor Central, see the previous article.
While there are benefits to both, Seller Central allows users more control over certain business operations, and sellers can set more of their own rules. This fits with what many brands are looking for right now, particularly because of the revenue uncertainty that currently surrounds Vendor Central.
With purchase orders at a standstill and growing frustration with chargebacks as well as diminishing customer support, Vendor Central merchants are shifting their strategy. Aiming for more control over business operations, they’re taking a fresh look at joining Amazon Seller Central.
Even though it’s something of a pain to set up, Seller Central gives brand vendors a backup flow of orders from the regular Amazon marketplace if branded orders dry up.
Concerns with protecting their brands
One concern for all brands selling on Amazon is preventing unauthorized sellers from listing counterfeit or low-quality versions of their products.
The Amazon Brand Registry
The best way to stop unauthorized selling is by enrolling in the Amazon Brand Registry. This program gives Vendor Central brands and makers a few tools to help combat counterfeiters. It can also help brands make a more seamless switch from Vendor to Seller Central.
Only one product listing is permitted per unique ASIN on Amazon. For brands and manufacturers, this used to mean Amazon was in charge of their product descriptions. The Brand Registry was a means of helping brands police bad actors. It gives them
- more control over the information on product pages from other sellers using the brand name;
- access to search and reporting tools that help identify potential cases of brand infringement; and
- predictive notices from Amazon about potentially inaccurate or low-quality product listings associated with your brand.
Having a registered brand means more control over competitors, even if everyone is using Seller Central, because brands can maintain their registration regardless of which program they’re using.
The changing nature of brand name products in the Amazon ecosystem
Brands’ strategies for Amazon has changed over time. Most consumers on that marketplace today are searching for items generically, rather than by brand name. This has caused private label brands to proliferate, and in many cases they’re ones launched by Amazon itself.
To appease established brands, the company has also made moves to help them more than others. We suspect that the newly introduced “Top Brand” badge being assigned to certain clothing and shoe retailers is a new initiative they will roll out more broadly to other products in the near future. Similar to its “Top Seller” and “Amazon Favorite” badges, the Top Brand badge flags a product with a proof point that can influences many buying decisions.
It’s a curious move. For a while, Amazon appeared to favor the Seller Central system, which uses a data-driven flat catalog, where all products compete exclusively based on reviews and ratings. The Top Brand badge goes against this since it gives a select group of well-known brands an advantage.
It’s not entirely clear what the Top Brand badge’s true purpose may be, or whether it might be related to Amazon’s recent halt in purchase orders from top brands. For participants in Vendor Central, a lot of uncertainty remains as of this posting.
A hybrid approach may be best for now.
An alternative to making the complete switch to Amazon Seller Central is to maintain accounts on both platforms. This option is probably best if they’re still fulfilling PO’s on Vendor Central, or want a backup plan to fulfill orders in case Amazon mistakenly runs them out of stock. It’s also a hedge against the possibility that Amazon again cancels or curtails the flow of purchase orders. Not only will your product visibility remain but you’ll also gain more control over it.
My mission at Shoppingfeed is explaining how to leverage e-commerce platforms and SaaS technology to e-merchants who just want to run their business and make more money.
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