Allume Group

Vendors snubbed by Amazon’s ordering system

This week, we’ve talked to many vendors who didn’t receive purchase orders on schedule. What does it mean? Is Amazon breaking up with you? Some are hurt and horrified. Others are happy, because they were totally ready to break up, like, two years ago, and be a seller instead.

First, don’t panic. For many of you, this could be a false alarm (see the variety of messages our clients received below). Maybe you’ll get a PO next week.

We’ve used our data, experience, and intel to put together our version of the Amazon’s story for you.  Here’s what you need to know.

Help! I didn’t receive a purchase order this week from Amazon. Did Amazon break up with me? What’s going on?

Amazon has been working for the last two years preparing for a day when they finally decide whether a brand should be sold vendor, seller, or both based on metrics like profitability and sales velocity. Here’s what they’ve been up to:

  • They’ve built control mechanisms into the seller platform to protect the customer experience regarding price, such as controls over seller retail pricing – buybox suppression and/or applying their own pricing discount
  • They are integrating their vendor and seller teams internally to align with the concept of a “Supplier”, vs. a “Vendor” or a “Seller”
  • They are collecting data comparing profitability across platforms at a brand level – and understanding impact to sales
  • They’ve created near-parity in the advertising platforms across Vendor and Seller
  • They’ve beefed up brand “controls” through Brand Registry
  • They are working on the launch a “merged” vendor and seller portal

They’re ready, and no time like the present to put their plan in action.

How do I know if Amazon has chosen vendor or seller for me?

Manufacturers who did not receive purchase orders this week appear to fall into three groups, based on the content of responses from all of the Contact Us that have been filed this week:

Vendors snubbed by Amazon’s ordering system

Group 1 – We’re really just too cool for you. Sorry, but it’s over. It’s not you; it’s me.  Please open a seller account and sell your widgets there. It’s been fun.

Group 2 – We’re not that into you, but there are some things to like. However, we want to date other people. We might like to go out again, sometime in the future, if you’d just take an interest in self-improvement (like, lower your costs). Then, maybe.

Vendors snubbed by Amazon’s ordering system

GROUP 3 – We really like you, but we’re scared of commitment. Or, we made a mistake, or maybe we’re just going to order every other week. Let’s take a break for a week and see what happens. Note: Maybe you’ll get scared and lower your costs.

Manufacturers who are still getting purchase orders fall into two groups:

Group 5 – We’re in a long-term relationship, but you’re seeing other people – specifically, someone named Seller Central. We either don’t know or don’t care. We’re ordering most of your products, but you (Vendor) are exploring your options.

Group 5 – We’ve proposed to you and have gone a little fatal attraction, killing off the other guy you were dating (ie., Seller Central) or making strong threats with hopes you’ll never date Seller Central.

Andrea, the dating analogy is kinda dumb. What does this really mean? What should I do?

First, don’t panic! You might still get a purchase order next week. No one truly knows what Amazon is doing. If you don’t:

Group 1 – Open a seller account if you don’t already have one. Amazon’s probably through with you, and you want to minimize interruptions to your sales. Make sure to set up every one of your items there, and replicate your Amazon Advertising campaigns for Seller Central. (Note: We can help!)

Group 2 – Open a seller account if you don’t already have one. Consider whether it makes business sense for you to lower costs on some items to continue supporting your Vendor Central business.

Group 3 – Open a seller account if you don’t already have one (see a theme here?) Consider whether it makes business sense for you to lower costs on some items to continue supporting your Vendor Central business.  This group may still have a Vendor Manager; ask questions if you do.

Group 4 – *Winner winner, chicken dinner!* Keep on selling hybrid!

Group 5 – Get creative on ways to continue selling hybrid

I still feel dumped. What else can you tell me?

Hybrid is more important than ever. Not to sound like a broken record, and I’ll spare you by linking to all of my past articles where I tell you to GO AHEAD AND OPEN A SELLER ACCOUNT ALREADY, MANUFACTURERS, but please open a seller account. If you are unable to do so, logistically, from an accounting perspective, philosophically, or even emotionally, don’t just sit around and cry abound being dumped, eating bonbons with your cat. We can help you, so please reach out!