The days of having a Vendor Manager to talk to over the phone and have face to face meetings is over. It may still exist for some larger brands, but if you are one of those small to medium sized accounts, you may never have spoken to a Vendor Manager or even knew they existed.
Whilst the role of the Vendor Manager still exists for the larger accounts, Amazon offers vendors different programs to support their businesses. Strategic Vendor Services (SVS) for the major vendors driving a certain level of sales and the Vendor Success Program (VSP) for the small to medium sized vendors.
SVS provides vendors with dedicated, account specific support (at a cost) to help them grow their business on Amazon. VSP focuses on offering vendors more scalable solutions. The program provides vendors general support, as and when it is needed, where vendors don’t have an assigned Vendor Manager. Instead vendors have to rely on ‘Contact Us’ cases.
Think of it as the 80/20 rule, Amazon supports and interacts with the top 20% and the other 80%, also known as the ‘tail end’ are left to fend for themselves.
All of this, highlights the direction Amazon are going. They continue to evolve, automating and consolidating processes and putting more responsibility on vendors to take ownership and become self-sufficient, especially the smaller accounts. Although even the larger accounts with dedicated support are still expected to understand and manage Amazon’s tools and systems proficiently. The only difference is that they get a helping hand.
As an ex Vendor Manager, I remember the pre Vendor Central days when we would work with vendors to devise a strategy, set up products, create promotions and manually change retail prices. The vendor could sit back and watch the sales flood in. But given Amazon’s goal to have the ‘earth’s biggest selection,’ and the rapidly increasing number of vendors, that style of working was far from scalable.
Hence the need to create scalable systems, processes and programs for Amazon to achieve this goal and the reason Vendor Central was born. This allowed Vendor Managers to focus on building long term partnerships with their key accounts and develop and implement strategies to achieve sales, profit and selection targets for their category.
The introduction of Vendor Central changed the dynamics:
It gave vendors ownership of their account. It gave vendors the tools to manage their own business and not be reliant on Amazon. Over time Vendor Central has evolved and become more self-service every day. Starting off with being a system to receive purchase orders and send shipments, it quickly grew into a portal to set up products, manage merchandising activities and pull reports. Then Amazon Marketing Services was introduced to manage the advertising side of the business.
Whilst vendors have all the tools available for them to own and manage their account, the challenge vendors have is devising their own Amazon strategy especially without the guidance from a Vendor Manager or SVS specialist. For those that have a solid understanding of Amazon, it can be a lot easier than those that have a limited understanding of what it means to become a successful vendor on Amazon.
What ends up happening is vendors end up mirroring the same strategy they have, for example with bricks and mortar, and apply it to Amazon and then can’t understand why it doesn’t succeed. As you all know, Amazon has its own language, own systems and own ways of doing things.
So when I talk about ownership, I am not just talking about using Vendor Central. I talk about three things; strategy, execution and review.
First a vendor needs to devise a business plan. In this plan the vendor needs to build goals and targets and define a strategy, effectively what they are going to do to achieve these goals. This strategy should consider; distribution, pricing, marketing, product assortment, competition and customer engagement.
Once the strategy is defined it is about executing it. This is when Vendor Central comes in to play. Vendor Central gives vendors the freedom to manage and optimize their product assortment and manage marketing initiatives, including merchandising activities and advertising via Amazon Marketing Services (AMS). Part of their strategy may also include management outside of Amazon.
After executing the Amazon strategy, the vendor then needs to regularly monitor and review the business to ensure they are reaching their targets and goals. It is also to identify trends, areas of improvement and opportunities for growth. Amazon has a series of reports that allow a vendor to track their performance; ARA Basic for data on sales and inventory and ARA Premium (ARAP) for additional data such as customer behaviour, plus those running ads in AMS can generate reports and obtain data from there as well.
In addition, third party tools such as Sellics give vendors a wider view of the business, from optimizing listings and AMS campaigns, to monitoring the buy box and product reviews.
Over the next few weeks, I am going to look at the following steps vendors need to take to set up their vendor account up for success. See you next week!