We’re getting reports from brands that Amazon suspended their Dropship accounts last week (now called Direct Fulfillment). This is not related to sellers who dropship, but rather, this applies to brands who are set up as vendors where Amazon sells the item and has the vendor ship the product to the customer. (See updates below.)
This may be related to reports that Amazon is moving lower-volume vendors to the 3rd-party selling model, as reported by DigiDay back in December. In a report on Monday, TJI Research said it appears Amazon is pushing smaller vendors to become marketplace sellers on Seller Central.
A seller forwarded us the email he received notifying him of the suspension:
Greetings from Amazon Direct Fulfillment,
Your direct fulfillment warehouse (redacted) has been suspended. As a result of the suspension, the inventory for all items in this warehouse is set to zero; no new orders will be sent until it is reinstated. If you have any open orders, please do ship them.
The Amazon Direct Fulfillment Team
Upon inquiring, Amazon told him that the Direct Fulfillment accounts were temporarily suppressed “for business and inventory management reasons.” And, like other vendors who discussed the problem on the Amazon boards, he was told his suspension was not due to metrics but was given no further information.
One vendor said an Amazon Vendor Success Rep had been trying for the past month to get them to sell their items directly to Amazon instead of through the Direct Fulfillment program. “I am starting to think now Amazon knew they were ending this program and were trying to get us to switch over before this happened.”
Another asked, are they stopping the Vendor Central Account program as a whole?
According to DigiDay, that seems likely – the publication said Amazon was consolidating vendors and sellers into a single program called Amazon One Vendor. The article delved into the pros and cons of brands selling on Amazon as a vendor versus a seller – chief among them: pricing.
Update 3/6/19: See this post on LinkedIn from Teikametrics founder Alasdair McLean-Foreman about the notice vendors received. “In typical Amazon fashion, it’s a move driven by a maniacal survival of the fittest model for growth,” he wrote. “Merging Vendor Central and Seller Central optimizes for Amazon’s own profitability while providing lower prices and massive selection to consumers.”
“Direct-to-consumer is the future of retail and to survive, brands must evolve to master the “seller playbook.””
Update 3/6/19: An Amazon spokesperson provided the following statement: “Our mission is to build the best shopping experience for customers, with unbeatable prices, selection, and convenience. We aspire to work with every brand owner and reseller. To do this, we must deliver an experience that is easy and efficient for the millions of brands and small businesses selling through our stores. While we’ve been working to standardize the products, tools and services we offer to our selling partners on Amazon, there is no program called “One Vendor.”” Note that she did not respond to our follow-up questions asking for clarification.