What is Amazon Vendor Express?
The Amazon Vendor Express program, which is a wholesale program meant to assist merchants to sell in bulk to Amazon, has been terminated. The company officially stated that it would stop buying from vendors on May 21, 2018, and terminate the program by January 2, 2019. To make sure we’re on the same page, let me tell you a little bit about the Vendor Express program.
Before the launch of the Vendor Express program in 2015, Amazon had two options for new sellers:
Amazon Seller Central (you sell directly to Amazon’s customers)
Amazon Vendor Central (Amazon buys from you and resells to their customers)
However, Amazon decided to introduce a third option that was not only more flexible than the other two, but also bridged the gap between them.
The Vendor Express platform enabled sellers to sell products to Amazon in bulk as opposed to selling directly to customers. The program was free to join, and sellers didn’t need an invitation to become members. Merchants in the Vendor Express program enjoyed certain benefits – the main one being having millions of customers worldwide see your product.
Other benefits sellers enjoyed for being part of the program include:
Free membership: The Amazon Vendor Express platform didn’t come with monthly/annual or referral fees required before signing up like in programs such as Seller Central.
Opportunity to sell in bulk: After merchants passed the trial (meant to check whether the product has the potential to sell) Amazon would start to buy in bulk from them.
Branding: Vendors participating in the Vendor Express program had their product listing associated with the Amazon brand because the products were labeled as “Sold by Amazon”, which boosted trust and increased sales.
Not worrying about the deliveries: Amazon handled the shipment of the products once a seller qualified as a vendor. Amazon made products from vendors eligible for 2 day free shipping for premium (Prime) customers and free shipping for some regular customers.
Free customer service: Amazon provided customer service around the clock on behalf of all sellers enrolled in the Vendor Express platform.
Express vendors benefited from the Amazon Marketing Service (AMS): The ability to advertise on Amazon Marketing Services was considered the most valuable offer to sellers in the program, because it allowed them to create advertisements on Amazon.com.
Why did Amazon decide to terminate the Vendor Express program?
Many have asked this question. There are many answers and opinions out there. Nevertheless, information from affected members, experts on the platform, and news sources points to a number of issues that have delivered the final blow to the program.
1. Quality Issues
In the official statement, Amazon said:
“We’re constantly looking for ways to improve the selling experience on Amazon. After careful evaluation, we’ve decided to retire Vendor Express and refocus the business on other selling programs.”
But, as you can see, they didn’t give the exact reason the company was calling off Vendor Express. Vendors with many years of experience on the platform who spoke to news sources with the condition of anonymity said that the program might have been ended because it was riddled with counterfeits. This might be the reason the program failed to attract high-quality sellers from the time it was launched.
Although for a vendor to participate in the program he/she was required to provide samples and specific registration forms before supplying in bulk, but the process wasn’t rigorous enough to ensure the authenticity of the products.
Some eCommerce pundits speculated that the decision by Amazon to end the Vendor Express program is because the returns on the programs were low due to a high number of counterfeits. Letting vendors sell directly to thirds parties absolves Amazon from having to deal with the risk involved.
Amazon advised affected merchants through an email to sell their products on the Amazon marketplace platform, where sellers double as retailers using Amazon’s shipping systems. The number of vendors using the Amazon Marketplace to sell has increased rapidly over the years and accounts for more than 50% of the sales made on the platform. This might have made the Vendor Express program less attractive to sellers, because it fits in between the popular Marketplace and Vendor Central, which is an invite-only program.
2. Delays in Payment and Test Order Approval
Complaints from vendors not receiving their pay on time was common. Most vendors on the express program received their paycheck after 85 to 120 days – contrary to 14 days like in other programs. Although the vendors agree on the payment cycle upfront, the long wait for invoices to be processed could have made the platform unattractive to vendors with fast-moving products and budgeting concerns.
3. Vendors Had No Control Over Stock or Pricing
The Amazon Vendor Express program is an automated system where a computer algorithm determines the prices at which products are sold, and the wholesale price Amazon pays vendors for bulk purchases. Amazon defended the automated pricing as a strategy to beat competitors by offering the lowest retail prices. However, vendors who didn’t like the prices offered had no avenue to express their concerns. Moreover, if the Amazon algorithm failed to recognize the potential of your product, it meant no purchase orders, no matter how promising your product was. Amazon failed to directly address the issue despite receiving numerous complaints from vendors.
It’s evident that the Vendor Express program was faulty, but the termination of the program definitely affected many sellers. Amazon advised vendors to migrate to the Seller Central platform, but that’s not a straightforward process.
Vendors who have already migrated to the Seller Central program found themselves in a limbo for a while because they could not launch marketing campaigns. The products they were selling were still listed on the Vendor Express program for months although they had no inventory there. This also led to a sharp drop in conversion rates.
Merchants on the Amazon Vendor Express program had limited choices; they were not migrated to the Vendor Central program because it’s an invite-only program. On a positive note, their best option, Seller Central, has robust selling tools that enable you to sell directly to customers, receive pay promptly, control prices, create a detailed brand content listing, and enjoy free membership. These benefits hopefully helped alleviate some of the pain from Vendor Express shutting down.
Share your thoughts
Were you impacted by Amazon Vendor Express shutting down? If so, please leave a comment below and share your story.
We also have a fantastic, free Amazon seller forum where members help each other to discover effective growth strategies and develop standard operating procedures to improve profitability and operational efficiency. You can sign up there and share your Amazon Vendor Express experience with other sellers.