Selling directly to Amazon means becoming a wholesale vendor: Amazon buys your products at a wholesale price, takes ownership of the inventory, and sells it to customers under the “Ships from and sold by Amazon.com” label. This is different from selling on Amazon as a third-party marketplace seller, where you list products yourself and handle (or outsource) fulfillment. If you want Amazon to purchase your goods outright, here’s how the process works and what it actually costs.
Two Ways to Sell: To Amazon vs. On Amazon
The distinction matters because the phrase “sell to Amazon” can mean two very different things. Selling to Amazon makes you a first-party (1P) vendor. You use a platform called Vendor Central, ship bulk orders to Amazon’s warehouses, and Amazon sets the retail price. Selling on Amazon makes you a third-party (3P) seller. You use Seller Central, control your own pricing, and either ship orders yourself or pay Amazon to fulfill them through FBA (Fulfillment by Amazon).
Most people searching “how do I sell to Amazon” want the 1P vendor route, so that’s the focus here. But it’s worth knowing that anyone can sign up for Seller Central and start listing products today. Vendor Central is a different story.
Vendor Central Is Invite-Only
You cannot sign up for Amazon’s vendor program on your own. Vendor Central is invitation-only, meaning an Amazon retail buyer or category manager must reach out to you first. Amazon scouts brands that are already performing well, either on its own marketplace, in brick-and-mortar retail, or across other e-commerce channels.
There’s no published checklist of requirements that guarantees an invitation. In practice, Amazon tends to approach brands that have strong sales velocity, recognizable products, or fill a gap in a category Amazon wants to grow. If you’re already selling on Amazon as a third-party seller and your products are consistently popular, that visibility can attract a vendor invitation.
If you want to be proactive, you can contact Amazon’s Seller Support team to express interest in the vendor program and ask about current requirements. Some brands also get noticed at trade shows where Amazon buyers attend to source new products. Building a track record of solid sales, positive reviews, and reliable supply is the most common path to getting on Amazon’s radar.
How the Vendor Relationship Works
Once you accept an invitation and set up your Vendor Central account, the day-to-day relationship looks like a traditional wholesale arrangement with a very demanding retailer. Amazon sends you purchase orders (POs), you fulfill them by shipping inventory to Amazon’s distribution centers, and then you submit invoices. Amazon pays you on net-60 or net-90 terms, meaning you’ll wait two to three months after invoicing to receive payment.
Amazon controls the product listing, the retail price, and the customer experience from that point forward. You lose the ability to set your own selling price, which is a significant trade-off. On the upside, products sold by Amazon directly tend to win the Buy Box more often and can benefit from the trust customers place in Amazon as the seller.
What It Actually Costs
The wholesale price you negotiate with Amazon is only the starting point. Vendor Central comes with a layered fee structure that can significantly cut into your margins.
- Co-op fees: Amazon deducts a percentage from every invoice as a cooperative advertising fee. The typical rate runs 8% to 10% or higher. Vendors with annual retail volume under $5 million often face rates above 10%.
- Marketing Development Funds (MDF): On top of co-op, Amazon may charge roughly another 10% for promotional support, including deals, placements, and advertising programs.
- Total trade terms: When you add co-op, MDF, and other deductions together, the average total trade terms hit approximately 18.6% of net sales as of 2025. That means for every $100 in wholesale revenue, nearly $19 goes back to Amazon in fees before you account for your own costs.
These percentages are negotiable to a degree, but Amazon holds significant leverage, especially with smaller vendors. Go in expecting to give up roughly a fifth of your net sales in trade terms, and model your wholesale pricing accordingly.
Chargebacks Can Add Up Fast
Amazon enforces strict operational standards for how you pack, label, and ship orders. When you fall short, you get hit with chargebacks, which are deductions taken directly from your payments. Across a typical year, chargebacks cost vendors 1% to 5% of invoice value, with the rate climbing as high as 4% of revenue during the Q4 holiday rush.
The penalties are specific and stack quickly. Delivering a purchase order late or early can cost 3% to 10% of the cost of goods. Shipping more units than ordered triggers a 10% penalty. Inaccurate advance shipment notices (the electronic notification you send before a shipment arrives) cost 2% to 6%. Even labeling mistakes carry per-unit or per-box charges: $10 per mislabeled carton, $25 for oversized or overweight cartons, and $0.63 to $1.26 per unit for prep issues like missing poly bags or barcode labels. A no-show carrier appointment costs $50 to $250 per incident.
The takeaway: you need tight warehouse operations before you start filling Amazon POs. Investing in compliant packaging, accurate labeling systems, and reliable freight carriers will save you far more than it costs.
Insurance Requirements
Amazon requires commercial product liability insurance once you cross $10,000 in monthly sales, or whenever Amazon explicitly requests proof of coverage. The policy must provide at least $1 million per occurrence, cover every product you sell through Amazon, and carry a deductible no greater than $10,000. Your policy also needs to name Amazon.com Services LLC and its affiliates as additional insured parties. The insurer itself must have a financial strength rating of at least S&P A- or AM Best A-.
If you don’t already carry product liability insurance, budget for it before you start shipping. Premiums vary by product category and sales volume, but this is a non-negotiable requirement.
Pricing Your Products for Vendor Central
Because Amazon controls the retail price, your profit depends entirely on the wholesale cost you negotiate minus all the fees and deductions described above. Before you agree to any terms, run the math backward. Start with your manufacturing or procurement cost, add your target margin, then layer on 18% to 25% in combined trade terms and potential chargebacks. The resulting number is the minimum wholesale price you need to sustain the relationship profitably.
Many vendors discover that the margins they’re used to in traditional retail get squeezed considerably on Vendor Central. If your product can’t absorb roughly 20% in deductions on top of a wholesale discount, the 1P model may not be the right fit.
Getting Started If You’re Not Invited Yet
If you don’t have a Vendor Central invitation, you have a clear alternative: start selling on Amazon as a third-party seller through Seller Central. This path is open to anyone. You create an account, list your products, set your own prices, and choose whether to fulfill orders yourself or use Amazon’s FBA service. Building a strong sales history on Seller Central is one of the most reliable ways to eventually attract a vendor invitation.
Some brands find that the third-party model actually works better for them long-term. You keep more control over pricing, you get paid within two weeks instead of two to three months, and you avoid the chargeback system. The trade-off is more operational responsibility and the need to manage advertising, inventory, and customer service yourself. Many established brands run both models simultaneously, using Vendor Central for their best-selling products and Seller Central for the rest of their catalog.