Amazon 3P: Frequently Asked Questions and Things to Consider

Garrett Bluhm

March 8, 2019

There are two ways to sell your products on the Amazon marketplace. Amazon buys your inventory in what is called a 1P or vendor relationship or you, the Amazon vendor, sell directly to the consumer yourself through Amazon 3P as a third party seller on Amazon. If you've never sold 3P before, you probably have some questions. We'd like to answer them and provide some ecommerce tools. Feel free to click on your question below to jump to the answer, or take time to read the whole post.

How do I start selling with a Seller Central Account?

Factors to consider before starting a Seller Central Account

What are the challenges of selling 1P versus selling 3P?

If I received notice from Amazon Retail that they will no longer be sourcing my products 1P, can I sell 3P?

Are there capabilities that are exclusive to Vendor Central (1P) that are not available on Seller Central (3P), and vice versa

If I have sold my products 1P in the past, can I sell 3P?

Can I sell CRaP products via a 3P account?

Will Amazon allow unauthorized sellers to sell my brand?

What is an Authorized 3rd Party Seller?

What are the advantages of selling through an authorized 3P seller like Pattern versus selling 3P yourself?

If my 1P account was suspended by Amazon, what should I do next?

DroppingBrands

How do I start selling with a Seller Central Account?

If you are interested in setting up your own seller account, Amazon does a great job of providing you details of how to sign up and get going

Factors to consider before starting a Seller Central Account:

1. FBA Tax Nexus: When you use FBA, inventory is sent to multiple warehouses all over the United States.  Since you technically own the inventory, you are now liable to file taxes in each state that you hold and sell inventory in.  Tax Nexus also can make you liable to file taxes on any product sales in these states, even if the products were not sold on Amazon.

2. Account Suspensions: Your account can be suspended!  As a seller, you are liable to meet Amazon’s guidelines for selling including on time shipping, labeling, and proper preparation.

3. Buy Box Re-Pricing: In order to win the BuyBox, you will have to implement a repricing option that will lower your price to win.

4. Customer Service: You are responsible as a seller to respond to customer inquiries within 24 hours - even on weekends and holidays.  You will be responsible for approving and handling customer returns and working with disgruntled customers to ensure they are happy.

5. Store Feedback: You will be starting a new account on Amazon with 0 feedback.  Feedback is a way that customers can rate how well you are doing your job.  If you have too much negative feedback, you will be suspended. Other sellers who have more positive feedback will have a better chance of winning the BuyBox until your account gains traction and positive ratings.

6. Inventory Forecasting: Amazon does not do any forecasting for you.  You are responsible for creating ‘PO’ shipments into Amazon, likely managing them with ecommerce software.  You still own the inventory when it is in FBA up until it sells to a consumer.

7. Inventory Feeds: You will likely need to invest in or develop an inventory feed directly into Amazon Seller Central that automatically adjusts inventory levels and ability to ship. This can be done with Pattern's ecommerce tools.  If you cancel too many orders due to out of stock issues, your account will be at risk of suspension.


What are the challenges of selling 1P versus selling 3P?

Challenges of selling 1P include:

- Limited control over product and brand control forecasting

- Limited control over POs

- Pricing at the discretion of Amazon

- Launching New Products and getting Amazon to order enough inventory

- Limited data provided by Amazon

- Self Service First Platform

 

Challenges of selling 3P include:

- Inventory ownership risk

- Prep & labeling consistent with Amazon shipping standards

- Tax Nexus and Liability

- Customer Service Management

- Returns and Stranded Inventory

- Competing for BuyBox ownership

If I received notice from Amazon Retail that they will no longer be sourcing my products 1P, can I sell 3P?

Yes you can. That being said, Amazon reserves the right to source your products for 1P in the future. [Learn more](https://info.pattern.com/contact-us) with our ecommerce software solutions.

Are there capabilities that are exclusive to Vendor Central (1P) that are not available on Seller Central (3P), and vice versa?

- A+ Content is exclusive to 1P sellers. However, Enhanced Brand Content is available to 3P sellers and functions almost exactly the same with the exception of a couple modules.

- Product Display ads remain 1P Exclusive, but other advertising options are all available to 3P sellers.  Rumors have surfaced that PDA’s will be available to sellers in the near future likely with One Vendor rollout.

- 1P offers ARA and ARAP data for an added % or fee structure.  3P sellers recently were given Brand Analytics which provides very similar data sources and information.  3P sellers also receive a lot more individualized data from purchases.

Amazon Vine Program currently is a Vendor Only program—although there have been beta Vine programs run with Sellers.

 

If I have sold my products 1P in the past, can I sell 3P?

Amazon’s updated Standards for Brands Selling in the Amazon Store states, “we may choose to source products from some Brands for sale by Amazon only. Other Brands can operate as sellers in the Amazon store if they can consistently maintain our standards for customer experience.”

Brands Eligible to Sell on the Amazon Store:

- Brands who have been told by Amazon that they are ineligible for a 1P offer

- Brands who have never sold inventory directly to Amazon

Brands Ineligible to Sell on the Amazon Store:

- Brands who Amazon selects to source products as a 1P Vendor Relationship

- Brands who do not price competitively on the 3P marketplace*

Can I sell CRaP products via a 3P account?

Some Vendor Managers allow hybrid accounts.  Others prohibit having both a 1P and a 3P account, which may impact your ecommerce growth strategy. Several hybrid accounts have been shut down over the last few months by Vendor Managers and several brands have been notified that their Hybrid Seller Accounts will be shut down later this year.

Will Amazon allow unauthorized sellers to sell my brand?

Yes. Amazon will not block unauthorized sellers from distributing and selling your products on the marketplace—even if they are not price competitive. In specific categories such as Luxury Beauty, Amazon will gate a brand from having unauthorized sellers.

What is an Authorized 3rd Party Seller?

An Authorized 3rd Party Seller is a 3P seller that will buy your products directly from you and resell on Amazon’s marketplace.  An Authorized seller should be involved with helping curate and provide content and messaging consistent with your brand’s objectives.  They should adhere to any MAP pricing policies and work directly with you to forecast for a consistent availability of goods on Amazon. Often, a distribution policy can be created to permit certain authorized sellers to sell on your behalf on Amazon, while prohibiting unauthorized sellers.  

amazon seller central

What are the advantages of selling through an authorized 3P seller like Pattern versus selling 3P yourself?

- Wholesale Payment Relationship: Inventory ownership passes to an authorized distributor / reseller, meaning you get paid faster.

- No Tax Implications: Authorized reseller handles all tax implications of FBA.

- No Account Management: You do not have to worry about managing customer service, managing seller central, re-pricing, or developing ways to avoid account suspension.

- No Additional Prep / Shipping: The authorized reseller typically takes care of your distribution efforts.

- Inventory forecasts, POs, Prep, labeling and fulfillment are all included.
- Additional Services: Pattern provides additional services included in the cost of goods.  Services include content creation, advertising management, our ecommerce software, and basket size optimization.  

- FeedbackPattern and other Authorized Sellers already have an established seller account with high amounts of feedback to help win the BuyBox consistently and provide a positive experience to consumers.

If my 1P account was suspended by Amazon, what should I do next?

- Define your business objectives: What is your ultimate goal?

- Define your current capabilities: Do you have the ability to prep, ship, and manage inventory?

- Develop a strategy to be successful

- Determine your current and long term objectives and ways to achieve them.  

- Explore the financial setup and ongoing costs of managing your own 3P seller store vs. partnering with an authorized seller to improve your ecommerce growth strategy.

- Determine the speed at which your organization can move on this initiative initially and develop the capabilities to sell on your own.

- Move quickly!

- The longer you are out of stock after your 1P account is shut down, the lower your rankings and product listing sales will drop.  It is imperative to act quickly and decisively.

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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)
Sept 20, 2022

4 Ecommerce Marketplace Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.