Brands can reach customers on Amazon in two fundamentally different ways. As a Vendor (first party, 1P) you sell wholesale to Amazon, which then sells to consumers. As a Seller (third party, 3P) you sell directly to consumers on the marketplace. Many brands combine the two – a hybrid model.
The main differences
| Vendor (1P) | Seller (3P) | |
|---|---|---|
| Who sells to the consumer | Amazon | You |
| Retail price | Set by Amazon | Set by you |
| Your revenue | Wholesale price from Amazon | Retail price minus fees |
| Commercial terms | Negotiated with Amazon | Published fee structure |
| Fulfilment | Deliveries to Amazon on purchase orders | Amazon fulfilment or your own |
| Access | Typically by invitation | Open to registered sellers |
When Vendor can make sense
A Vendor relationship can suit brands with strong demand, established retail operations and a preference for selling in bulk rather than managing individual orders. The trade-off is less control over the retail price and assortment, and terms that must be negotiated.
When Seller can make sense
Selling as a Seller gives control over price, content and assortment, and a direct view of performance. It also requires more operational work: pricing, inventory, customer service standards and advertising all need active management.
Questions to answer before choosing
- How important is control over the consumer price in your other channels?
- What is your contribution margin under each model, after all fees and costs?
- Do you have the capacity to run a Seller account day to day?
- How would each model affect your existing retail and distribution partners?
- Would a hybrid model – some products or markets on each – reduce risk?
The right model can differ by market and by product. Treat it as a decision to revisit as the business develops, not a one-time choice.