4 Benefits of Using a 3P Partner on Amazon

Sarah Abel

June 2, 2022

Every Amazon selling model comes with pros and cons, but before you get too comfortable in a single model, you should know 4 benefits of partnering with a 3P accelerator.

To make sure we’re on the same page, partnering with a 3P accelerator means you sell your product to a 3rd party, like Pattern, who helps you sell your products on marketplaces like Amazon. This is different from a 1P relationship where you sell your product directly to Amazon to sell themselves, or selling 3P where you manage your Amazon business yourself.

As an ecommerce accelerator, Pattern understands what it takes to grow profitably on Amazon and has the resources, expertise, and technology to get you ahead. Check out the 4 benefits of working with a 3P accelerator like Pattern.

4 Benefits of a 3P Accelerator on Amazon

1. You Reduce Distribution Complexities

In a 1P relationship, you fulfill POs made by Amazon, so you’re forced to work around their erratic forecasts, limited communication, and changing priorities. But in a 3P partnership, you dictate inventory management, allowing you to stay in-stock, maintain control of forecasting, and plan for promotions or holidays.

Forecasting isn’t the only complexity to watch out for. In a 1P relationship you are responsible for getting a substantial amount of your product to hundreds of Amazon’s warehouses across the country. Then, if product needs to move from one warehouse to another, you are responsible to cover the shipping fees.

As a 3P seller, you either ship Fulfilled by Amazon (FBA) and deal with the same logistics headaches as a 1P relationship, or you ship Fulfilled by Merchant (FBM) and skip Amazon’s warehouses altogether, but are in charge of getting your products to customers—wherever they are—in a timely manner after they purchase.

With Pattern as your 3P accelerator, you only need to fulfill POs to one distributor, simplifying forecasting and getting inventory to the right place. You ship inventory to one of our warehouses, and we handle the rest—distribution across Amazon’s warehouse network for FBA, repackaging products into bundles, and delivering your orders on time.

We help you achieve Prime eligibility without the hassle, and we focus on keeping you in-stock to keep up sales momentum.

2. You Maintain Price Control

By narrowing your ecommerce distribution, you not only reduce logistical complexity, you limit the opportunity for leaky distribution and lessen the unauthorized sellers who damage your price control.

Unfortunately, even without unauthorized sellers, a 1P relationship with Amazon can cause price erosion because you don’t get to dictate or control price, they do. Amazon wants to provide the lowest price to its users, so in a 1P relationship the marketplace may choose to lower your initial price to drive sales and compete against other sales channels.

As a 3P seller, or in a 3P accelerator relationship, you have more control to set and stick to MAP price, because you handle the strategy yourself. The only downside is that, as an individual 3P seller, you’re on your own to handle any unauthorized sellers who pop up.

At Pattern, we understand how important price control is to every aspect of your business, so we adhere to your pricing policies while helping you identify and take down sellers who don’t. Using our proprietary technology, trusted eControl law firm, and experienced brand managers, Pattern helps you maintain price control.

3. You Receive Expert Help at Scale

Amazon is no one-trick pony. To successfully run an Amazon business, you need competencies across SEO, advertising, customer service, graphic design, inventory management, shipping & fulfillment, product photography, conversion-first copy, strong review generation, driving off-platform traffic, and the list goes on and on.

Being a 3P seller on Amazon requires you to figure all of these competencies out alone—or hire a myriad of agencies to handle individual parts of the overall machine. This quickly becomes time-consuming, expensive, and complicated.

In a 1P relationship, you have to trust Amazon to handle it all, with limited input from your brand. Giving full creative control to Amazon can be scary, especially when its goal is focused more on sales than your brand equity.

In speaking of her experience in the difference between 1P and 3P strategies, Nancy Eichler, VP of Ecommerce and International at MegaFood, said the 1P environment was far more resource-demanding—”I spent more time proving to Amazon that we had shipped something than I did actually working on selling the product and my marketing”—and brand control was continually an issue.

Instead of relying on Amazon, or struggling to find the bandwidth for so many specialized skills, a 3P accelerator like Pattern can provide all the expertise you need, all in one place, and scale with you as your brand grows. Because we help so many brands across global marketplaces, we have dedicated teams specializing in advertising, product videos, inventory forecasting, packaging design, and so much more. On top of world-class teams, Pattern experts have access to our proprietary technology, giving them real-time data and actionable insights on things like keyword opportunities, inventory demand, and MAP compliance.

At Pattern, we become an extension of your ecommerce team, offering our time and expertise to grow your Amazon business profitably.

4. You Can Retain Your 3P Accelerator Model on New Marketplaces

While selling directly to a marketplace and having them handle everything else can seem convenient, a 1P selling model isn’t available on all marketplaces. As your brand expands to new marketplaces and new markets, you’ll be forced to adopt a new selling model and readjust your strategy.

In contrast, selling 3P or with a 3P accelerator is generally an available selling option across marketplaces, both domestically and internationally. And when you sell with the right 3P accelerator, you can scale your same partnership to launch in new markets and marketplaces, making the transition smoother.

Pattern works as a 3P accelerator across a variety of domestic and international marketplaces, providing you the same level of brand control, strategic input, and revenue growth around the world. Because we support so many brands globally, we have the scale to provide international strategy expertise, global warehousing, and efficient logistics at a fraction of the cost of bringing these proficiencies in-house.

The Benefits of Pattern as Your 3P Accelerator

As your 3P accelerator, Pattern can help you maintain brand control and grow profitably on Amazon and marketplaces around the world.

Reduce distribution complexity, maintain price control, receive expert help at scale, and maintain your selling model as you grow to new markets and marketplaces, with Pattern.

Ready to talk about an Amazon partnership? Set up a meeting today.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Aug 9, 2022

The Ecommerce Equation: 4 Levers CEOs Use to Drive Marketplace Revenue

Developing your ecommerce strategy for digital marketplaces like Amazon, Walmart, Tmall, and Alibaba gets complicated fast—there’s a lot to think about, including marketplace SEO, product photography, advertising tactics, disjointed sellers, distribution logistics, managing ratings and reviews, and more. It can be overwhelming for brands, especially those with small teams, to know which behaviors to optimize for for the highest gains in profitability.

The good news? Revenue performance all comes down to data. Pattern was built on a data science approach to ecommerce success. We find the patterns that drive profitability, then apply them to boost our brand partners’ revenue on ecommerce channels.

And a key pattern we follow for all brands on digital marketplaces is the ecommerce equation: revenue = traffic x conversions x price x availability. As brands zero in on these four pieces of the equation, they can simplify and focus their efforts to reach truly profitable ecommerce growth. 

1. Drive Traffic to Products

The first part of the equation is traffic—you need to get people to see your listings if you want to generate sales. There are two ways to drive traffic to your products: through organic search and paid search. Striking the right balance between both for your brands is crucial to driving enough of the right traffic to your products, ultimately increasing your ecommerce revenue.

Knowing this, Pattern provides the resources and technology needed to drive traffic to your product listings. Our brand management team, advertising specialists, and SEO technicians work in harmony to create a unified strategy to boost your brand’s organic profile and balance that with a paid advertising approach that works for your brand and listings.

Using this method, we took Feetures socks from ranking on longer-tail terms like “no show athletic socks black” to driving traffic on parent keywords like “no show socks.”

2. Create Content that Converts

Getting customers to your product listing is only half the battle. Once on your listing, you need customers to convert. Conversion is key to the ecommerce equation because it leads to real product purchases and revenue. Traffic without conversion leads to more time and ad spend without the ROI.

Optimizing your images, product description, bulleted details, customer reviews, and buy box performance is key to successful conversion. If you’re going to spend time and effort driving traffic, you should make sure customers can easily and clearly find what they’re looking for when they arrive at your listing.

While your imagery and descriptions are important, you also need to build customer trust to drive conversions. Studies show that your customer service efforts matter too—84% of people trust online reviews as much as friends, making strong reviews an important factor of conversion on marketplaces.

The good news is as you provide a quality product and a great marketplace experience, you’ll build brand equity, increasing your customer loyalty. Then, as your reputation, reviews, and traffic grow positively, marketplace algorithms will recognize your popularity and improve your rank accordingly. Rank drives both traffic and conversions, helping you to optimize your performance further. As your brand equity grows, your conversions will continue to grow with it.

3. Control Your Price

While setting a strategic price is an important step in your ecommerce strategy, it takes more than that to truly control your price on marketplaces. 

Without proper control and with wide distribution, your product could end up in the hands of disjointed sellers who lower your marketplace price to sell their inventory and make quick profits. With one seller lowering price online, other authorized sellers and retail partners are forced to lower their price to compete, creating price erosion and sending your brand down the profitability death spiral.

This Death Spiral damages brand equity, hurts conversions, and can lead to Buy Box Suppression on Amazon, hindering traffic as well. And as prices get lower and lower, your profit margin withers away, decreasing your overall revenue.

Using our data-driven insights and Pattern’s eControl partner Vorys, we help brands implement narrow distribution, identify and take-down unauthorized sellers, eliminate price erosion, and control their price online. Focusing on price control, Pattern helped LifeSeasons, a premium supplement company, take back 91% control of the Buy Box on Amazon.

Download the LifeSeasons 1-Page Case Study Here

4. Optimize Your Product Availability

The last piece of the ecommerce equation is availability. It makes sense to think of availability as a contributing factor in conversion, but we felt that it’s important enough to call out on its own—you can fully optimize your traffic, conversion, and price, but without availability, you can’t grow revenue for your brand.

A lack of availability leads to stock outs, losing conversions to competitors, losing possession of the buy box, poor customer reviews, a decrease in traffic…the list goes on. The best-performing brands on ecommerce digital marketplaces optimize their availability with high-end technology, optimize their cash on hand, and inventory time on hand to keep the ecommerce equation powered and optimized in their favor.

How Pattern Drives Revenue Using the Ecommerce Equation

Pattern is committed to  solving the ecommerce equation. We partner with brands to provide the expertise, resources, and technology needed to drive traffic, create content that converts, protect price, maintain availability, and ultimately accelerate ecommerce revenue and profitable growth. 

Interested in improving the results of your ecommerce equation? Schedule a call.

Aug 8, 2022

Global Insights: Spotlight on Amazon in Emerging Markets

We have analyzed Amazon in emerging markets compared to countries where it has already achieved dominance, following its reported growth of 22% between [2020](https://www.marketplacepulse.com/articles/amazon-gmv-in-2020) and [2021](https://www.marketplacepulse.com/articles/amazon-gmv-reached-600-billion-in-2021). Pattern’s [Amazon Consumer Insights Report 2022](https://info.pattern.com/amazon-consumer-insights-report-2022) has highlighted some interesting insights into the similarities and differences in the ways Amazon is used across 17 different countries. We carried out research on various macroeconomic indicators and data related to Amazon usage in each country to better understand the key factors that determine the suitability of the markets. In this blog we outline the most interesting Amazon global insights that will be of interest to brands determining where they should have a presence on the marketplace, particularly Amazon in emerging markets. Population, urbanization, and GDP per capita are all factors which have a large effect on ecommerce and marketplace strategy in a country. These factors need to be taken into consideration when understanding the potential a brand has when entering a new market. Notable takeaways from the report are highlighted below. Price of Amazon Prime The monthly cost of Amazon Prime varies greatly depending on how developed the Amazon market is in the country. We noticed that in countries with a higher GDP per capita and a more dominant Amazon presence, the price of Prime is substantially higher, for example, in the US ($14.99) and in the UK ($10.08). The monthly cost of Prime in the UK has [recently increased by $1.26](https://www.bbc.co.uk/news/business-62297014) due to higher operating costs, but we believe that UK consumers will accept this increase. As a comparison, less developed markets with lower GDP per capita figures, such as Poland ($2.56) and Brazil ($3.12), have significantly lower monthly Prime prices. Amazon purposely prices Prime to be very cost-effective for customers in emerging markets as a customer acquisition strategy and to help grow its market share more quickly. Desktop vs. Mobile India, Japan and Mexico were found to have higher percentages of traffic from mobile devices compared to other markets. This is in line with data which looks at the [leading countries based on retail mobile commerce sales growth](https://www.statista.com/statistics/1261743/leading-countries-mobile-commerce-sales-growth/), and shows how particular countries spend more time online using mobiles rather than desktops. App Downloads & Ranking In this year’s report, we made the decision to include data on the Amazon App (Android), as more consumers are shopping online on mobile devices. This is reflected in the average monthly downloads and category rank of the app. Mexico sees an average of 1.2 million monthly downloads of the Amazon (Android) App. This is expected, as Mexico is one of the regions that has a higher percentage of traffic from mobile devices compared to desktops. In terms of average monthly Amazon web traffic, Mexico is the 9th largest out of the 17 countries analyzed, but after the US and Brazil, is the 3rd largest in terms of monthly downloads of the Android App, highlighting the country’s preference for using the Amazon App. Visit Duration & Page Views In markets where Amazon is robust and well developed, like the USA, UK and Germany, consumers tend to spend more time on the platform and view more pages per visit, as there is more choice from a wider range of products to explore. On the other hand, in markets where Amazon is still either at its early implementation or growth phase, like the Netherlands, Poland, and Brazil, there is less on offer and a far smaller selection or products. Inevitably, we noticed consumers have a lower average visit duration and view fewer pages in these markets. We would expect to see these metrics increase as Amazon’s product selection increases in these markets. Top Selling Categories There are many similarities between the different markets in terms of the top selling categories in each country. Out of 17 countries, 12 had Home & Kitchen and 11 had Electronics in their top 3 categories. Regional differences can be seen with Sports & Outdoors only ranking as a top category in the UK, Video Games only in Japan, and Hardware only in Germany. It is important for brands to acknowledge that not all categories will sell successfully across all markets. Just because the category is popular in one or more markets, does not mean that it will work across all 17 instances that we analyzed. Our Amazon consumer insights report shows that although the online marketplace dominates online retail in the USA and several other Western European countries, the company is aiming to build that position in countries where it is newer in the market by taking into account the regional differences in consumer behavior and expectations within its proposition. [Download the full report here](https://info.pattern.com/amazon-consumer-insights-report-2022), and [contact us here](https://info.pattern.com/contact-us/) to learn how we could support your global marketplace strategy or for more information on how we partner with brands to represent them on Amazon.
Aug 4, 2022

Ecommerce Innovators Podcast - Achieving Growth Through Technology

Join us for Ecommerce Innovators, a podcast that brings together the brightest minds in the industry to explore innovative strategies and trends in global ecommerce. We'll analyze what top brands are doing to accelerate their online success and you’ll hear from top executives who are changing the game for their organizations. Our host is John LeBaron, Chief Revenue Officer at Pattern—the premier partner for global ecommerce acceleration.

Listen on Spotify

Listen on Apple

In our conversation with John Wessel, CTO and SVP of Product & Digital at Fresh Water Systems, he talks about digital transformation, innovation, and growth. Hear about the many hats John’s wears, how the company has transformed since the 90s to stay cutting edge, the pharmacy part of the business, aligning and prioritizing multiple channels, and competing with Amazon.

Ecommerce Innovators Episode Synopsis

As we interviewed John Wessel, here are some things we learned:

Content leads to search ranking. For Fresh Water Systems’ ecommerce site, around 70% of their traffic is to the blog. The secret for content is “well-researched, well-written, long form content that is informative”. John explained that they have an SEO team who writes 5000+ word posts that are researched and documented. People read these blogs and comment, which drives more traffic to the blogs.

Ecommerce is changing the shopping game. John shared an interesting story about a plumber who orders parts every Friday night online, from wherever he can get the best price. He doesn’t have relationships with one supplier or an auto-renew subscription for his parts. Instead, he finds the best price just for the parts he needs every week. John thinks the trend of price shopping will continue, especially as ecommerce grows.

Invest in customer engagement, but don’t invest a lot of time into emails. How many advertising emails do you actually read? Companies often spend a lot of time doing A/B tests and crafting the “perfect” email. However, John pointed out that almost no one reads emails anymore. Instead, invest your time into different brand touchpoints you will have with your customer. You can still send emails, but make sure you dedicate less time to the process.

Listen to the full episode for free on Apple Podcasts, Spotify, or wherever you get your podcasts.