It can be difficult to decide how to trade with Amazon, but understanding the differences between the options can enable organizations to best leverage the advantages of working with this leading eCommerce enterprise. In this blog we’ll explain the differences between being a vendor and a seller, along with the fulfillment options available for both. We also inform the reader as to how Data Masons can help companies fully automate their business processes with Amazon from order to invoice, regardless of the option selected.
In this scenario, Amazon acts as a retailer, buying stock in bulk from a vendor and storing this stock in their distribution centers. The end customer then buys the stock from Amazon and the order is fulfilled by Amazon, so the end customer is Amazon’s customer. This means the communication with the customer is controlled by Amazon, and Amazon also collects margin on every sale.
How Does Data Masons Help?
Data Masons can integrate the entire Order to Cash cycle with Vendor Central via Amazon’s strict EDI requirements which can be fully managed by Data Masons on your organization’s behalf. Data Masons can service interactions with Amazon in any country in which Amazon operates. Data Masons seamlessly enables EDI with Vendor Central for all available Amazon Vendor Central interactions, resulting in lower operating costs for vendors that utilize Amazon’s portal solution.
When participating in Seller Central program, the supplier (seller) sells directly to their customers on the Amazon website. Amazon acts as a marketplace and it takes a subscription rather than margin on every sale. The seller controls the communication with the customer and can therefore build a customer profile, which can in-turn help with repeat business through targeted marketing.
Seller Central also gives the seller more flexibility when changing settings such as delivery service levels, pricing and stock levels. This flexibility can be especially useful on promotional days like Black Friday, enabling a seller to quickly react to market conditions. For example:
- a competitor is selling the same products as your company at a discount you need to match on Amazon
- your warehouse is having issues, so you need to extend the delivery promise
- you want to alter the stock levels available on Amazon depending on how well all your selling channels are performing versus the stock levels you have available
How Does Data Masons Help?
Data Masons has a “ready to implement” solution that manages various RESTful API interfaces that are utilized with Seller Central. Data Masons can work with our clients to determine which ones are relevant to their use case to maximize selling potential and flexibility on Amazon. Orders are retrieved from Amazon automatically and then interfaced to existing ERP infrastructure. The overall result is that distribution through Seller Central can be performed in an efficient, secure and reliable fashion.
Fulfillment by Amazon (FBA)
Fulfillment by Amazon is the third way that a company can utilize Amazon’s platform and services. In this model, Amazon’s responsibilities include warehousing, shipping and even selling a company’s products but, unlike Vendor Central, Amazon does not purchase the goods from the seller and receive margin. Instead, Amazon charges warehousing, selling and fulfillment fees. Fees vary based on whether the goods are sold by Amazon or through other channels or eCommerce sites. In detailed terms this is how FBA works.
- When FBA is utilized, the seller transfers goods to Amazon’s fulfillment centers and retains legal ownership of the goods. Amazon promotes the goods, receives orders, ships the goods and settles the payments that are remitted to the seller. At the same time, orders can be taken by the seller through other means and transmitted to Amazon for fulfilment but no billing is involved by Amazon. In this scenario Amazon behaves like a public warehouse (aka Third Party Logistics Provider 3PL or Logistics Service Provider LSP).
- If both FBA and a company’s own distribution network are being used, the FBA API interfaces will only be run for the orders to be shipped via the FBA workstream.
How Can Data Masons Help?
Data Masons can fully integrate with Amazon FBA APIs and your Microsoft ERP directly or any ERP system that support EDI transactions such as X12, EDIFACT and even custom file formats. Data Masons can help companies utilize the optimal Amazon model for their business and become more competitive overall.
To learn more about how Data Masons can provide seamless integration with your ERP for Amazon and other key trading partners, download our white paper, EDI Made Simple.