Vendor

 Vendors differ from third party sellers because they do not sell directly to end customers.
 Instead, they act as wholesale suppliers to Amazon.
Amazon buys inventory through purchase orders, holds the stock in its fulfilment centres, manages pricing, handles customer service, and sells the items on the marketplace as the retailer.

This model is typically invitation only and used by:

• manufacturers
• brand owners
• authorized distributors

Key characteristics of vendors:

• sell products wholesale to Amazon
• Amazon owns the inventory
• Amazon sets the retail price
• Amazon handles all customer interactions
• vendors manage catalog, cost prices, and operational compliance in Vendor Central

Vendor responsibilities:

• confirm purchase orders on time
• maintain product data and content quality
• comply with packaging and labelling standards
• manage shortages, chargebacks, and disputes
• provide reliable lead times and forecasting inputs

Amazon’s role in the vendor relationship:

• negotiates wholesale costs and trade terms
• forecasts demand and places POs
• determines the final retail price
• manages returns, refunds, and customer service
• handles storage, picking, packing, and shipping

Benefits for vendors:

• predictable PO based revenue
• strong retail placement and high trust signals (“Ships from and sold by Amazon”)
• customer service fully managed by Amazon
• access to major promotional events

Challenges for vendors:

• lower margins due to wholesale pricing
• limited control over retail price
• strict operational requirements and chargebacks
• sensitive to Amazon’s forecasting accuracy

Example:
A home appliance brand sells its microwaves to Amazon at a negotiated wholesale cost.
Amazon lists the microwaves on Amazon.com, sets the final customer price, and manages fulfilment and customer service.

Why It Matters:
Understanding the Vendor model is essential for brands operating as first party suppliers, since Amazon controls pricing, inventory decisions, and much of the retail strategy.

In short:
A Vendor is a brand or manufacturer that sells products directly to Amazon under the 1P wholesale model, where Amazon becomes the retailer and manages pricing, inventory, and customer service.