Vendor Central is seductive. Amazon places a purchase order, you ship the stock, Amazon pays you. It feels like a clean wholesale relationship with the biggest retailer in the world. Then you look at what actually lands in your account, and the picture changes.
The headline price is not the price
Between the PO value and the money you keep sits a stack of deductions: co-op allowances, freight allowances, marketing fees, shortage claims, compliance chargebacks, and price-protection adjustments. Each one is individually plausible. Together they can quietly erode a margin that looked healthy on the purchase order into something far thinner — and sometimes into a loss you did not notice for months.
We supplied over £40M+ through Vendor Central. The single most important discipline we developed was reconciling every deduction against the original invoice, line by line, so we knew our true net margin per product — not the fiction on the PO.
Most chargebacks are disputable — and most go undisputed
Shortage claims, compliance penalties, and PO-accuracy charges are not fixed costs. A large share of them are disputable, and a large share of those disputes succeed. But disputing them is laborious, so most businesses dispute fewer than half — and write off the rest as a cost of doing business. Systematic recovery typically returns 40–70% of disputed amounts straight to the bottom line. That is money the business already earned and is simply failing to collect.
Vendor or Seller is a commercial modelling decision
The Vendor-versus-Seller question is not about preference. It is a margin calculation. Vendor gives you scale and removes fulfilment, but you surrender pricing control and absorb the deduction stack. Seller gives you control of price and margin but hands you fulfilment, Buy Box competition, and account management. For some products the answer is Vendor, for others Seller, and for many businesses the answer is both — different products on different models.
The mistake is treating it as a one-time platform choice rather than an ongoing commercial decision modelled on real net margin. Run the numbers properly and the right structure is usually obvious. Run on gut feel and you can leave a great deal of margin on the table for years.
FOR YOUR BUSINESS?