Compared with the current 1P sellers (i.e. supplier sellers), selling products on the Amazon platform as a 3P seller (third-party seller) seems to be a more attractive and simple way. In this way, you will have more control over your product pricing, brand exposure, profits and even buyer payment terms.
Compared with the current 1P sellers (i.e. supplier sellers), selling products on the Amazon platform as a 3P seller (third-party seller) seems to be a more attractive and simple way. In this way, you will have more control over your product pricing, brand exposure, profits and even buyer payment terms.
Amazon said that more than 40% of the sales of items on its platform are contributed by third-party companies and brands. In addition, on Amazon Prime Day in 2018, platform sellers generated sales of more than $1 billion. This is an attractive opportunity. But before you decide to become a marketplace seller, here are some of the most common questions you need to know.
What is the difference between the identities of 1P sellers and 3P sellers?
If you are currently selling products as a 1P seller, your brand will be considered a wholesaler and products will be uploaded directly to Amazon through the Vendor Central management platform. From a consumer perspective, your products appear to come from Amazon itself.
For 3P sellers, they need to upload products through Seller Central and then sell them directly to consumers through the platform. Although Amazon is a display platform, it is not a retailer. In this case, consumers will be aware that they are purchasing products from the brand or other third-party channels.
What are the benefits of selling as a 3P seller?
Amazon allows brands to be more “hands-on” when selling as a third party, so you get more control as a 3P seller. Unlike 1P sellers, where Amazon can manage their product prices and visibility and often make changes without communicating with the brand, 3P sellers have the power to decide their product assortment, inventory, pricing, minimum advertised price (MAP) standards, and profits. In addition, Amazon also provides basic data analysis and seller support services to 3P sellers.
What are the disadvantages of selling as a 3P seller?
The downsides to selling as a 3P seller are that Amazon doesn’t provide as in-depth analytics as 1P sellers, you have less available inventory, A+ pages aren’t usually available to you, and your brand awareness or reputation can take a hit when consumers believe the products you sell aren’t adequately supported by Amazon. Consumer distrust may also grow when brands must manage all complaints and damage control when Amazon is unable to assist with customer service.
