Recently, Amazon announced a sudden change of their sourcing policies, meaning that thousands of Vendor Central sellers will be negatively affected. This comes under a new procurement policy that comes into effect starting 15.January 2024.
From that date onwards, Amazon intends to stop sourcing products from wholesale resellers and merchandise will be only procured directly from the brand owners or manufacturers.
Since many brands use distributors to reach Amazon customers, this move will likely result in decreased product availability. The reason behind this change appears to be Amazon’s attempt to increase profit margins in its retail division at all costs.
By eliminating distributors who take a cut of the profits to fund its business model, Amazon aims to build a direct relationship with the manufacturing brand, gain greater control over pricing and earn better margins by cutting out the middlemen.
Brands currently relying on distributors to sell on Amazon are now forced to choose between initiating a direct relationship with Amazon or encouraging their distributors to join the Amazon marketplace as third party merchants.
Here you can view a copy of the full wording of a notice e-mailed to Vendor Central users regarding the matter:
| Dear Vendor, As part of a procurement policy implemented at a European level, Amazon has decided to focus on sourcing brands directly from brand owners. As a result, we hereby inform you that we will stop sourcing all products from you, starting on 15 January 2024. We remain at your disposal to discuss the above with you, and if you have any questions, please reach out to Vendor Support through Vendor Central. You still have the opportunity to sell these products to customers directly on our store through Amazon Marketplace, as a third-party seller. If you do not already have a Seller Central account you can get started by speaking to a team member directly here. Sincerely, Amazon EU SARL Luxembourg, February 15, 2023 |
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