Amazon Retail vs Marketplace: What’s Right for Your Brand?

As a brand looking to scale on Amazon, one of the most critical decisions you’ll face is whether to sell through Amazon Retail or Seller Central. Each model comes with its own set of advantages, challenges, and trade-offs. Choosing the right path can significantly impact your margins, control over the customer experience, and long-term success on the platform.

In this blog, we’ll compare Amazon Retail vs Seller Central, diving deep into key differences such as ownership, margins, the Buy Box, and retail media access. By the end, you’ll have a clear understanding of which option is best for your brand’s growth strategy on Amazon.

1. Understanding Amazon Retail vs Seller Central

Before diving into the advantages of each model, let’s quickly define what they are:

• Amazon Retail: Also known as Amazon Vendor Central, this model is where Amazon purchases products directly from you at wholesale prices, and they handle all the selling on the platform. Amazon acts as the seller, and your brand becomes a supplier.
• Seller Central: In this model, you maintain full control over your products. You list, sell, and ship your items directly through your own Amazon account, keeping full control of your inventory and pricing. This is often referred to as the “3P” (third-party) model.

While both models provide opportunities to scale on Amazon, they differ in key areas, which we’ll now explore.

2. Ownership and Control

One of the primary distinctions between Amazon Retail and Seller Central is the level of ownership and control you maintain over your brand.

• Amazon Retail: When you sell through Amazon Retail, you relinquish control over key aspects of the customer experience. Amazon sets pricing, manages your product listings, and determines how your brand is marketed. While you still control your product catalog and inventory, the lack of direct control over your product listings and customer interactions can be a downside.
• Seller Central: Selling on Seller Central offers full control over your brand. You manage the product listings, pricing, marketing, and customer communication. If maintaining brand ownership is important to you, Seller Central is the best route, as it gives you direct access to your customers.

If brand control and ownership are key for you, Seller Central offers more flexibility and control, allowing you to make strategic decisions about pricing, inventory, and customer engagement.

3. Margins and Profitability

The way you’re compensated and the margins you earn vary significantly between Amazon Retail and Seller Central.

• Amazon Retail: When you sell via Amazon Retail, you generally sell products to Amazon at a wholesale price, which can be significantly lower than your retail price. While this model reduces your involvement in the day-to-day operations, your profit margins are typically thinner. Amazon assumes the risk, but the trade-off is lower profitability.
• Seller Central: Selling on Seller Central allows you to sell directly to customers at retail prices, giving you better control over margins. While you’ll be responsible for things like storage, shipping, and customer service, you retain a larger portion of the sale price. The downside is the increased operational responsibility, but this comes with higher profit potential.

For brands that are focused on maximizing margins, Seller Central offers a better opportunity for higher profitability. However, if you’re looking for convenience and are willing to sacrifice margin, Amazon Retail might be the right fit.

4. Buy Box Competition

One of the most coveted spots on Amazon is the Buy Box. The Buy Box is the “Add to Cart” button that drives a majority of sales on Amazon. However, gaining ownership of the Buy Box depends on whether you’re selling via Amazon Retail or Seller Central.

• Amazon Retail: If Amazon buys your products directly, they have exclusive access to the Buy Box for your listings. Since Amazon controls the pricing, listings, and promotions, it is easier for Amazon to control which brands win the Buy Box.
• Seller Central: When selling via Seller Central, you compete with other third-party sellers for the Buy Box. The competition is based on price, shipping speed, and seller performance metrics such as customer feedback. Winning the Buy Box means your product will appear as the default purchase option on Amazon, significantly boosting sales.

While Amazon Retail gives Amazon sole ownership of the Buy Box, Seller Central opens up the opportunity to compete for this valuable spot. Brands that focus on great service and competitive pricing can win the Buy Box and capture more sales. Learn more about the essential lessons for starting and thriving on Amazon.

5. Retail Media Access: The Power of Sponsored Ads

Retail media access is one of the most powerful marketing tools available to Amazon sellers.

• Amazon Retail: Selling via Amazon Retail doesn’t give you direct access to Amazon’s advertising tools such as Sponsored Products or Sponsored Brands, though you may have limited opportunities to participate in Amazon’s marketing activities.
• Seller Central: When you sell via Seller Central, you have full access to Amazon’s advertising suite, including Sponsored Products, Sponsored Brands, and Sponsored Display. These tools help you increase visibility, drive traffic to your product listings, and boost sales.

For brands that are looking to leverage Amazon’s advertising capabilities and gain more exposure through targeted campaigns, Seller Central offers better opportunities for marketing and driving traffic to your listings.

6. Fulfillment and Logistics: FBA vs. Amazon Managed Service

Fulfillment is another area where these two models differ significantly.

• Amazon Retail: With Amazon Retail, Amazon handles all fulfillment, so you don’t need to worry about shipping, storage, or customer service. This can be appealing for brands that want to offload logistics responsibilities.
• Seller Central: Selling through Seller Central offers a variety of fulfillment options. You can use Fulfilled by Amazon (FBA) for a streamlined, Amazon-managed process or handle fulfillment yourself with Fulfilled by Merchant (FBM). FBA allows you to reach Amazon Prime customers and ensures that Amazon handles customer service and returns.

If you prefer to offload fulfillment to Amazon, Amazon Retail might be a better choice. However, if you want more control over logistics and fulfillment, Seller Central provides more flexibility with FBA or FBM options.

Conclusion

Choosing between Amazon Retail vs Seller Central is a pivotal decision for any brand looking to scale on Amazon. If you want full control over your listings, margins, and customer experience, Seller Central is likely the better option. On the other hand, if you prefer Amazon to handle most aspects of selling and fulfillment while accepting lower margins, Amazon Retail might be right for you.

At Goamify, we specialize in helping brands navigate the complexities of selling on Amazon. Whether you’re selling through Amazon Retail or Seller Central, our expert team can guide you through the process, ensuring your brand maximizes its potential and drives long-term success.

Ready to take your Amazon business to the next level? Contact Goamify today for expert guidance on choosing the right Amazon selling model for your brand.