Brands: Amazon 1P Vs. 3P And Who To Choose?

You may have pondered whether the 1P or 3P model is better for your brand’s sales, whether you’re a seasoned Amazon seller or just getting your feet wet. We at Prime Retail Solution, a 3P seller with extensive Amazon experience, know that there is no universally correct approach to selling on Amazon; rather, it is conditional on the nature of your products, your objectives for the future, and your current resources.

In this blog, we’ll shed light on the key differences between 1P and 3P sellers and guide you on which model will suit your business the best.

Amazon 1P vs. 3P: Which Selling Models To Choose?

	1P (First Party Sellers)	3P (Third Party Sellers)
Inventory and Fulfillment	Amazon directly purchases inventory.Amazon handles storage, shipping, and customer service.	3P Sellers manage their inventory, shipping, and customer service. 3P Sellers can use Amazon FBA for storage or fulfill orders yourself with Amazon FBM.
Pricing and Control	Amazon sets the Amazon controls for product listings.	3P Sellers price products themselves 3P Sellers can optimize their listings with images and A+ content. 3P Sellers have more brand control
Fees	Amazon charges wholesale prices from 1P sellers. Amazon charges standard referral fees (usually 8-15%).	Variable fees depending on fulfillment method (FBA vs. FBM) and product. Additional fees for advertising, storage, etc.
Profit Potential	Generally lower profit margins.	Potentially higher profit margins due to more brand control.
Marketing and Visibility.	Amazon may market your products through its marketing channels.	3P Sellers have more flexibility in optimizing their product listings for better visibility. 3P Sellers can use any marketing channel for their brand promotion.
Scalability	Easier to scale quickly as Amazon handles fulfillment.	Scaling requires managing your inventory and logistics.
Who Is It For?	Good for brands seeking a passive approach to selling on ecommerce marketplaces.	More suited for businesses with strong branding and operational capabilities, seeking maximum growth.

What Is Amazon 1P Seller Model?

Amazon 1P seller model is the first-party selling. This primarily applies to businesses that make products, distribute them, or own brands and sell them to Amazon. Through Amazon Vendor Central, Amazon buys products in bulk from these first-party sellers.

As an Amazon first-party seller, your principal obligation is to complete customer orders as well as fulfill orders with Amazon.

When Amazon receives the inventory products, they will take on all management over the product, including price and marketing. Your products will be sold under the Amazon name, and the company will also handle shipping, customer service, and returns.

What Is Amazon 3P Seller Model?

Online merchants and sellers prefer 3P (third-party selling) as an Amazon selling option. In this model, Amazon provides sellers who wish to bypass Amazon’s marketplaces and sell straight to consumers.

Unlike Amazon 1P seller model, where Vendor Central handles all financial transactions, Seller Central is where Amazon 3P sellers market their products. A third-party seller has the option of selling through either the Amazon FBA or Amazon FBM programs.

If you use Fulfilment by Amazon (FBA), a service it offers, it will handle product picking, packing, storing, and shipping on your behalf. Additionally, Amazon will also manage Amazon returns and customer care under the FBA program.

But with Fulfilment by Merchant, often known as Amazon FBM, sellers offer their products on Amazon but, in contrast to FBA, have other sellers take care of warehousing, shipping, and customer service on their own.

Which Option Should You Choose For Your Business?

The Amazon 1P seller model may be an appealing option for sellers seeking a passive approach to Amazon. However, for brands looking to take control of their growth, maintain a competitive edge, and significantly boost their Amazon sales, the third-party seller model is the ideal choice.

A third-party seller or an Amazon agency, like Prime Retail Solutions, can work on your behalf to make selling 3P easier and less resource-intensive. You can continue to get regular wholesale orders from third-party sellers while still maintaining control of the marketplace, expanding your brand’s exposure, and gaining all the experience necessary to succeed on Amazon. We also handle your marketing, advertising, inventory, refunds, customer service, and compliance needs.

Benefits Of Choosing the Amazon 3P Seller Model

Source: Gitnux

1. Control Your Product’s Pricing: The power to set and manage your retail prices falls onto the 3P seller. You can compare prices with your competitors in real-time with this. Additional benefits include more uniform pricing across all of your products and a more streamlined pricing structure, both of which can boost your bottom line and make it easier for other sellers to follow your lead when it comes to pricing.
2. Control Products And Inventory: Enjoy more control over your brand with a wider range of choices for your catalog, inventory, product details, and online visibility. In particular, the Brand Registry gives you greater control over the protection process.
3. Implement Strategies That Work For You: More product launch options and strategies to reward conversions to speed up the sales velocity of new products are yours to choose when you manage your listings, promotions, and desired quantity of units to sell.
4. Control And Manage Product Listings: While Amazon’s internal team members must approve material and graphics for wholesale suppliers, you have complete control over what appears on your product detail pages.
5. Greater Profit Margins: Instead of making a smaller profit at wholesale, you can make more money at retail.

How To Become An Amazon 3P Seller?

Establishing a y account is the first step to becoming an Amazon 3P seller. After providing the necessary information and undergoing verifications, your account will be approved and you can list and dispatch your products.

There are two alternatives available to Amazon 3P sellers for the shipment of their products: Fulfilment by Merchant (FBM) or Fulfilment by Amazon (FBA). FBM entails the obligation to manage inventory, apply labels, package, and dispatch products individually to each customer. FBA eliminates the need for you to be concerned with packaging and shipment, as your inventory is stored in Amazon’s fulfillment centers. However, you must fulfill the preparation requirements if you opt for FBA.

Choose Prime Retail Solutions As a Third-Party Seller On Amazon:

We found 3P partner models to give ecommerce businesses the most power and control over the Amazon marketplace without requiring them to worry about complicated logistics, which was a huge boon to their work. Although 3P selling is frightening due to stock, management, and dangers, PRS uses a third-party seller model to provide our partners with autonomy and independence that isn’t possible in a 1P option.

If you’re ready to go beyond and above to take control of your brand’s growth, partner with Prime Retail Solutions, your reliable expert 3P selling partner, ready to empower your brand with the tools, strategies, and support you need to thrive on the world’s largest ecommerce marketplace.

Here’s just a taste of what you can expect when you partner with us:

• Boosted Sales and Visibility: We’ll optimize your listings, manage your inventory, and implement data-driven marketing campaigns to get your products seen by millions of potential customers.
• Enhanced Brand Control: Say goodbye to generic packaging and limited product details. With 3P, you control your brand narrative and build a lasting connection with your audience.
• Greater Profit Margins: Instead of relying on wholesale discounts maximize your bottom line with direct retail sales.
• Stress-Free Logistics: We’ll handle all the fulfillment, from storage to shipping, so you can focus on what you do best.