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Vendor Central:
Amazon 1P Vendor
Invitation Only: Amazon must invite you to be a 1P seller with them
Sell inventory directly to Amazon
Amazon controls retail pricing
A+ Content
Sponsored Brands, Sponsored Products, Product Display Ads
Sold by Amazon
Seller Central:
Amazon 3P Vendor
Open to anyone: Anyone can sell products through this platform
Sell directly to Amazon customers
Seller controls retail pricing
Enhanced Brand Content
Sponsored Brands, Sponsored Products
Fulfilled by Amazon
Overview
Selling on Amazon isn't optional in the retail world today. If you're not on Amazon, to most consumers you don't exist. But navigating Amazon can be tricky. Both Vendor Central, or Amazon 1P, and Seller Central, or Amazon 3P, have their advantages. As time passes, the differences can get a bit blurry, so we break it down to help you decide if sticking with 1P is the right move or if shifting to a 3P relationship with Amazon makes more sense.
Why
Vendor Central
Vendor Central
Advantages
- Sold by Amazon: The seller is listed as “sold by Amazon” so the customer knows that they're getting a product by a brand they trust. In reality, no one really looks at the seller. A customer just wants to know that it's Prime and they're getting two-day shipping. So while this might seem like an advantage, it's not much of a differentiator.
- Product Display Ads: These ads can increase visibility for individual products. By linking these advertisements to a product detail page within Amazon you can target similar products, interest groups, relevant categories, etc. Product Display Ads can only be used by an Amazon Vendor.
- ARAP: Amazon Retail Analytics Premium, or ARA Premium, provides additional data and reports for Vendors. Reports include Customer Behavior, Customer Reviews, Geographic Performance, Market Trends, Operations, and Sales.
Challenges
- Dependent on Amazon Buying Inventory: Amazon holds the ace in this relationship. One week they're ordering $100k of inventory and the next you might be dropped from 1P.
- Pricing Control: Amazon always wants to offer customers the lowest price in the market, even if that means taking a loss. So if you have Minimum Advertised Pricing (MAP) guidelines, don't trust that Amazon will follow them. Amazon can and will exercise dynamic pricing any time based on their internal data.
- If Amazon racks up losses because of the brand's inability to enforce MAP policy, they will pass those costs on to the brand or decide that your product is not worth selling (CRaPed out products).
- Logistics: The eCommerce giant has pretty strict guidelines for filling purchase orders. If a 1P Vendor can't maintain stock and fulfill orders quickly, they might experience some pretty nasty chargebacks.
Why
Seller Central
Seller Central
Advantages
- Brand Control: As the seller, you have more control over the pricing and can set it at MAP. You still have to strictly track and enforce MAP for other sellers so you don’t lose the Buy Box, but you have more control. Vendors or suppliers often find their products being resold by third-party sellers without permission. These listings often contain very little detail and can harm your brand image.
- By registering with Amazon's Brand Registry program, you can combat these unauthorized sales, create Enhanced Brand Content that will improve the consumer experience, boost your brand recognition, and instill trust in your brand. Simply put, you can protect your reputation.
- Analytics: When it comes to selling online, data is king. Seller Central offers consumer data at no charge. This data can be used to learn more about customer behavior and demographics, and understand who's buying your products and where they're being purchased from. These reports aren't as in-depth as ARA Premium but still offer good insights.
Challenges
- Fulfillment Costs: Shipping and/or fulfillment costs often limit your ability to sell low-priced items on Amazon. At the time of this writing, the minimum fulfillment charge for non-media FBA items is $2.41, not including Amazon's category-specific commissions.
- Logistics: Many manufacturers' logistical operations were created to meet the demands of distributors and traditional retail. They're really good at delivering pallets of product, but they don't have the logistics built out to do the necessary Fulfilled by Amazon (FBA) prep or even fulfill individual orders through the Fulfilled by Merchant (FBM) option available to Sellers.
- Tax Nexus: Because of recent changes to tax law, if you decide to set up your own Amazon Seller Central account and leverage FBA to fulfill orders, you will create Tax Nexuses in every state that has an Amazon Fulfillment Center. This can be a huge burden for brands and manufacturers who have never had to deal with taxes across multiple states and municipalities, as you're essentially required to file taxes in all of those locations.
Frequently Asked Questions
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...
Are there capabilities exclusive to Vendor Central (1P) that aren't 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...
If I’ve 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...
How Pattern
Can Help
Can Help
Pattern is one of the largest 3P sellers on Amazon. We help brands navigate the worlds of 1P and 3P, regain brand control, grow sales through content optimization and product advertising, and handle all distribution and logistics.
Grow Your Sales
Increase sales by driving high-quality traffic to product pages and improve on-page conversions via stellar content, data-driven SEO, and stats-based advertising.
Protect Your Brand
Take back control of your brand by creating and enforcing pricing and distribution policies that protect your brand value.
Scale Your Distribution
Scale the distribution of your products to new marketplaces, countries, and growing markets.
Let's Chat
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