Becoming an Amazon distributor typically means one of two things: selling products directly to Amazon as a wholesale supplier through its Vendor Central platform, or operating as a third-party seller who buys products in bulk and distributes them through Amazon’s marketplace. Both paths have distinct requirements, costs, and trade-offs. The route that fits you depends on whether you’re a brand owner, an authorized distributor, or an entrepreneur looking to resell products at scale.
Two Ways to Distribute on Amazon
Amazon operates two core platforms for sellers, and understanding the difference is essential before you commit time or money.
Vendor Central is Amazon’s invite-only wholesale program. You sell your products directly to Amazon at wholesale prices, and Amazon handles everything from there: warehousing, shipping, pricing, and customer service. Your products show up as “Sold by Amazon.” You’re essentially a supplier, not a retailer. This is the closest thing to a traditional distribution relationship with Amazon.
Seller Central is the open marketplace where third-party sellers list products and sell directly to consumers. You control your own pricing, listings, and inventory. You can fulfill orders yourself or use Fulfillment by Amazon (FBA) to have Amazon store and ship your products. Any business owner or entrepreneur can sign up.
Vendor Central offers bulk orders and removes the need for day-to-day retail management, but you give up control over pricing and margins. Seller Central gives you more control but requires constant hands-on management of your business.
Getting Invited to Vendor Central
You cannot apply for Vendor Central. Amazon must extend an invitation, and those invitations go to brands and distributors that meet specific criteria. Strong sales performance on the Amazon marketplace is the single biggest factor. Amazon wants brands with established reputations, reliable supply chains, and products that fill gaps in their catalog.
Amazon also favors manufacturers and authorized distributors over generic resellers. If you’re the brand owner or hold exclusive distribution rights for a product line, you’re a much more attractive candidate. Being able to prove you can consistently fulfill large orders without supply chain disruptions matters.
The most common path to a Vendor Central invitation runs through proven success as a Seller Central seller first. To increase your chances:
- Maintain high seller metrics. Keep your account in good standing with low defect rates, on-time shipping, and strong customer feedback.
- Win the Buy Box consistently. This signals to Amazon that your pricing and fulfillment are competitive.
- Build reviews and ratings. Products with strong review profiles attract Amazon’s attention.
- Participate in Amazon programs. Using FBA and programs like Amazon Vine shows you’re invested in the platform.
- Attend trade shows. Amazon representatives actively scout new vendors at industry events. Networking in your product category can lead to direct conversations with Amazon buyers.
- Contact your Amazon account manager if you have one, and express interest in becoming a supplier.
What Vendor Central Actually Costs
Selling wholesale to Amazon sounds straightforward, but the fee structure is more complex than a simple wholesale discount. Understanding these costs is critical before you accept an invitation.
Amazon pays vendors on net-60 or net-90 terms, meaning you’ll wait two to three months after submitting an invoice to receive payment. For businesses with tight cash flow, this delay alone can be a serious constraint.
On top of the wholesale discount you offer Amazon, the platform deducts a co-op fee from every invoice. These fees have climbed steadily and now typically run 8% to 10% or more of the invoice value. Marketing Development Funds (MDF), which cover promotional support and advertising placement, add roughly another 10%. Combined, average total trade terms hit approximately 18.6% of net sales as of 2025. That means for every dollar in wholesale revenue, nearly 19 cents goes back to Amazon in fees before you account for your own production and shipping costs.
Chargebacks for operational mistakes can erode margins further. Late or early delivery on a purchase order triggers a penalty of 3% to 10% of the cost of goods. Overshipping units beyond what Amazon ordered costs 10%. Mislabeled cartons run $10 per box, oversized or overweight cartons cost $25 per box, and prep issues like incorrect bagging or labeling add $0.63 to $1.26 per unit. Missing a carrier appointment can cost $50 to $250 per incident. These penalties make precision in fulfillment non-negotiable.
Starting as a Third-Party Distributor
If you don’t have a Vendor Central invitation, selling through Seller Central as a wholesale distributor is the more accessible path. Here, you buy products in bulk from manufacturers or authorized distributors at wholesale prices, then sell them on Amazon’s marketplace at retail prices.
To get started, you’ll need a Professional Seller account on Amazon, which costs $39.99 per month. You’ll also need a few foundational business elements: a registered business entity (an LLC or corporation), an Employer Identification Number (EIN) from the IRS, a business bank account, and a resale certificate or sales tax permit for your state. The resale certificate allows you to buy inventory without paying sales tax at the time of purchase, since you’ll collect sales tax from the end customer.
Finding products to sell requires establishing wholesale accounts directly with brands or authorized distributors. This means reaching out to manufacturers, attending trade shows, or using wholesale directories. You’ll typically need to provide proof that you’re a legitimate business, and many brands require a minimum opening order. Some brands restrict who can sell their products on Amazon, so always confirm authorization before investing in inventory.
Using Amazon’s Warehousing and Distribution
Amazon Warehousing and Distribution (AWD) is a bulk storage program that feeds inventory into FBA automatically. If you’re a third-party seller handling large quantities of product, AWD lets you ship bulk inventory to Amazon’s upstream warehouses. Amazon then moves units into its fulfillment centers as needed based on demand, saving you from managing complex restocking logistics.
AWD is available across a wide range of product categories, including electronics, beauty, toys, pet supplies, tools, apparel, sporting goods, and dozens more. Notable exclusions include jewelry, watches, meltable products (chocolate, gummies, wax-based items), refrigerated goods, hazardous materials, and gift cards.
Products with expiration dates must have at least 185 days remaining when you ship them to AWD, and at least 105 days remaining when Amazon moves them into FBA fulfillment centers. Before sending inventory, your product listings must be active and valid, and any stranded inventory issues in your account need to be resolved. Certain product categories also require pre-approval from Amazon before you can list them.
Business Setup and Compliance
Regardless of which path you take, you’ll need proper business infrastructure. Register a business entity with your state, obtain an EIN, and open a dedicated business bank account to keep personal and business finances separate. A resale certificate from your state tax authority is essential for purchasing inventory at wholesale prices without paying sales tax upfront.
Sales tax obligations depend on where you have nexus, which generally means a physical or economic presence. If you use FBA, Amazon stores your inventory in warehouses across multiple states, potentially creating nexus in each one. Amazon collects and remits sales tax on your behalf as a marketplace facilitator in all states that impose sales tax, but you may still need to register in those states depending on local rules. Keep separate records of your direct sales and any sales facilitated through the marketplace.
Many wholesale suppliers and brands will ask for proof of general liability insurance before opening a wholesale account. Amazon itself may require commercial liability insurance once your sales exceed a certain volume. A standard policy covering $1 million per occurrence is a common threshold that satisfies most requirements.
Choosing the Right Path
If you’re a brand owner or authorized distributor with strong sales volume and you want Amazon to handle the retail side entirely, working toward a Vendor Central invitation makes sense. You trade margin and control for simplicity and access to Amazon’s full logistics network. Just be prepared for the fee structure: co-op charges, MDF, chargebacks, and 60- to 90-day payment cycles all cut into your wholesale price.
If you’re building a distribution business from scratch or want to maintain control over pricing and customer relationships, start with Seller Central. Use FBA to outsource fulfillment, and consider AWD once you’re moving enough volume to justify bulk storage. The barrier to entry is lower, the startup costs are more manageable, and you can scale at your own pace while building the track record that might eventually earn a Vendor Central invitation.