Amazon: Should I sign up as a Seller or a Vendor?

Here’s what we know about Amazon South Africa (Project Fella) – the launch will be lowkey. All brands, especially small, local brands need to be ready. That’s where Billie and Code come in! We’re here to give you all the scoop and insight on Amazon South Africa. We have been writing blogs based on different topics regarding Amazon, and you’re currently reading Part 4. Find Part 1, 2 and 3 on our blog.

Let’s dive right in! Tons of people will be signing up as Amazon sellers, so the competition is pretty intense. It’s important to know all the ins and outs of becoming an Amazon seller. Amazon offers two different methods of selling. These two methods will determine how your business or brand operates within the Amazon marketplace.

The Vendor Model

 This is a classic wholesale model where businesses and brands sell their products to Amazon at a fixed cost. This is very similar to how Takealot operates. Your products are then sold to buyers under Amazon’s name. In this model, Amazon has full control over product assortment and pricing, making this model the simpler option available.

Although it may seem to be your go-to option, there is a disadvantage to consider. If Amazon decides to change the prices of your products and your competitors follow the same process, this may lead to a lower demand for your business or brand.

The Seller Model

This model is a direct-to-consumer model, where you have full control over how your business or brand operates on Amazon. You, the seller, will be responsible for your catalogue, inventory, shipping methods and RRP (Recommended Retail Price). In this model, sellers pay Amazon a fixed fee on their sold products and can make use of the Fulfillment by Amazon Program (FBA). This program will give your brand or business access to Amazon’s global warehousing and fulfilment services.

Compared to The Vendor Model, this model allows you to have more control over your business or brand. The only disadvantage you may come across is needing a more hands-on approach which requires more time and energy.

So, the question is, which option is most suitable for you? At Billie and Code, we often say that no one knows our brand better than you. Only you can decide the capacity you have to work with. Allow your goals, objectives, and available resources to help you select the right model for you.

Keep your eyes out for Part 5 about Amazon South Africa!