Amazon Pulls the Plug on Vendor Purchase Orders

Lance Judd

As many Amazon vendors know, the ways in which Amazon works (or arguably doesn’t work) are often a mystery.

The latest chapter in this saga is currently still very much in play, and as a result of many (by some reports and estimates more than half of Amazon vendors) who find themselves in the awkward position of receiving no new Amazon purchase orders since last Monday, February 25.

For those who don’t know, Amazon direct retail vendors in most, “usual” circumstances, receive a batch of automated purchase orders every Monday morning.   As of the publication timing of this article (03/06/2019 4:40 PM PST)  more than two days have passed since the typical wave of automated purchase orders were expected (but never arrived).  This latest issue is compounded by the fact that in the last few weeks, Amazon has also and according to some vendors, without warning, placed the popular “direct fulfillment” (also known as “drop ship”) program into an indefinite hold status.

With respect to the lack of purchase orders, Amazon has been uncharacteristically quiet on this topic so far (at least from an official spokesperson’s perspective).  However, given the many touch points in which and how Amazon’s Vendor Central portal functions, inquiring vendors (as well as their agency representatives like the team here at Zanoma) have several tactics for asking questions, receiving information and pursuing answers. This process usually involves submitting what’s known as a “contact us” case via Vendor Central.  Those cases are managed by a team at Amazon called “Vendor Services” and it’s those employees who have been at the front lines of this skirmish so far.

What is Amazon Saying?

Responses to the many variations of “why no purchase orders this week?” question have also varied but a few commonly-received examples are included below:

1) I understand your concern in regard to POs not being submitted to you. At this time, we are not placing any purchase orders on your products. I will reach out to the relevant team and share any additional information. We will notify you if we choose to place any purchase orders.

2)  I have contacted our internal team to get more information about this issue. They will research your issue on an expedited basis and reach out to you if any additional information is required.

3) I understand that your concern regards not getting POs. I have reviewed our internal ordering system for your account and at this time, we are not placing any purchase orders on your product(s). I will reach out to the relevant team and share any additional information. We will notify you if we choose to place any purchase orders.

And for comparison purpose, please see the recent response below for the “why was my direct fulfillment account suspended?” question:

4) I would to inform you that your Direct Fulfillment account was suspended due to an Amazon’s business decision. From time to time, Direct Fulfillment offers and accounts are temporarily suppressed for business and inventory management reasons. No additional action is required on your part. We will automatically reinstate the offer and account if circumstances change. [sic]

So, What Does it all Mean?

A quick check of the very active Amazon Vendor Central Group on LinkedIn (which the founder of Zanoma created several years ago) reveals the iceberg tip of panic and confusion currently being felt and expressed by impacted vendors.  Positions and feelings in that forum run the gamut from “this too shall pass” to “this is the end of Vendor Central as we know it” but in a nutshell, and sorry for the buzzkill, no one outside of the upper reaches at Amazon really knows for sure what this all means.

In fact, one astute observer opined that “those who know, aren’t talking and those who are talking, don’t know.”

Many Amazon watchers are aware of the company’s logical and not-so-hidden desire to create a more consistent experience for both vendors (using Vendor Central) and sellers who use a completely different portal called Seller Central.

Anyone actively following this latest bit of turmoil will find ample speculation and a range of theories and perspectives in terms of online content, but again, we encourage you to take it all with a grain of salt – until Amazon speaks in actual detail and substance.

Amazon sellers, who make up what is known as the Amazon Marketplace provided a rich and profit margin-heavy infusion of revenue to Amazon’s bottom line.  Amazon sellers have historically been responsible for at least half of all Amazon sales on an annual basis and by using FBA (Fulfillment by Amazon) those same sellers can even take advantage of Amazon’s own shipping, fulfillment and customer service infrastructure to tap into those 100 million Amazon Prime members (who tend to purchase more than twice that of their non-Prime member peers).

In other words, the bulk of those sellers on Seller Central have not been impacted at all by Amazon’s latest moves on the retail, Vendor Central front.  In fact, savvier Amazon brands (or perhaps those weary of poor communication on the retail side) have for many years played comfortably in both the Vendor Central and Seller Central worlds.

Paranoia and confusion have kept many brands on the sidelines but there’s no question that another week (or even a few more days) of what we’re going through now, in terms of no new Amazon retail purchase orders via Vendor Central will send brands scrambling to get back in the Amazon game with active offers via Seller Central.

Even if Amazon forces brands to pick just one platform and makes it impossible to manage both a vendor and a seller account, we still maintain that it’s in the best interest of those brands to have a functional knowledge of both platforms now – or as soon as possible. If Amazon forces a choice, brands will be armed with data and experiences that will inform strategies and directions.

Our team at Zanoma is well-versed and fluent in both platforms and we’d welcome the chance to work with you on that effort.  Having a “plan B” or even a third or fourth option is all part of the chess match that is e-commerce.

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Where Do You Go from Here?

Even if purchase orders are eventually placed and we return to “normal” in the coming weeks, Amazon (for better or worse) has struck a chord and simply waiting for your inbox to light up with orders is not going to be a sound strategy.

We completely understand how strange and stressful the last few days have been for vendors expecting but not receiving purchase orders.  We also understand the frustration of having a potentially lucrative drop ship operation pulled out from under your team (with no clear warning).

Since we’ve been in this business for nearly a decade, we can only speak from experience when we advise our client partners to consider and plan for the migration (even if it’s a mirror image or just a partial migration) of their Amazon business to Seller Central. We do believe it’s highly likely that Amazon will seek to implement a range of changes over the coming weeks and months. Preparation and adaptable approaches are critical in this new world.

A proactive Seller Central action plan can be created by fairly Zanoma quickly. Thanks to years of experience helping countless brands create and launch Seller Central accounts, and for many of these same reasons outlined here, we know exactly what it takes to get the work done.

The good news is that brands migrating from Vendor to Seller Central are already in a favorable position in terms of product detail pages and legacy product data.  But to be clear, this type of transition is not for the squeamish or easily frustrated, while the jargon and terminology is familiar and/or similar to Vendor Central, Seller Central is a completely different beast!

If you’re seeking advice or support, the team at Zanoma is eager to be a resource.

Please reach out to us with the form below and we’ll be happy to talk.  We understand that every product category and every business owner or decision maker reading these words has unique needs and varying goals.

You won’t receive a “cookie cutter” strategy from Zanoma.  We’ll take the time to listen and understand your goals and objectives and help you move forward with a clear, concise action plan that accounts for your needs and budgets.

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