BALANCING AN AMAZON VENDOR SELLER STRATEGY
[Pages:25]BALANCING AN AMAZON
VENDOR+SELLER STRATEGY
Selling to Amazon vs. Selling on Amazon
Table of Contents
Introduction
3
3P (Seller Central)
5
Amazon's Ideal 3P Candidate
5
Pros & Cons of 3P
6
1P (Vendor Central)
9
Amazon's Ideal 1P Candidate
9
Pros & Cons of 1P
10
Transitioning from 1P or 3P
15
Switching from 1P to 3P
15
Balancing 3P and 1P With A Hybrid Approach
18
Challenges With the Hybrid 3P+1P Strategy
19
The Bottom Line
24
Introduction
When you're a vendor on Amazon, life is pretty good.
Once your products are in Amazon's warehouse, they take care of everything, and you get paid.
Amazon's tagline for Vendor Central says it all:
"You make it. We buy it. Your business grows."
But what about those times when you want to alter something on your listings, and it's not within vendor guidelines?
Or when you're not happy with the rock bottom price on a product, but you're not in control of it?
There are pros and cons between both 3P selling and 1P selling on Amazon, and we'll explore them all here.
Selling to Amazon vs. Selling on Amazon 3
3P (Seller Central)
3P (Seller Central)
3P (third party): Sells products directly to consumers via Seller Central. Can be Seller-Fulfilled or regular FBA (Fulfilled By Amazon).
Amazon's Ideal 3P Candidate
Fills Selection Gaps
Amazon does want 3P sellers to be successful (so that Amazon can be successful), but Amazon's main goal will always be to please their customers.
Carina McLeod, a former Amazon Vendor Manager, explains:
"Amazon wants 3P to maximize their sales potential on the marketplace, but it's all about filling those selection gaps. Amazon may not be able to get all of the brands they need on the vendor side, but those brands may access the 3P side. It's all about the customer experience, and they want the customer to be able to go on and discover and buy any product they want."
Simply put, a 3P seller who's filling a gap either in product or brand selection is very welcome, as long as they are not prohibited items.
Selling to Amazon vs. Selling on Amazon 5
Carina McLeod Former Vendor Manager Amazon
Pros & Cons of 3P
Pro: Control Over Prices & Products
3P sellers have more control over their prices and promotions because there's no middleman (a.k.a. Amazon) dictating prices. Vendors do not have this bonus.
In addition, 3P sellers are in complete control of the products (and the number of units) they choose to sell on Amazon, while vendors must frequently concede to Amazon's requests.
Pro: Control Over Promotions
If you're a 1P seller, it can be difficult to launch a product using Vendor Central alone. (We'll talk more about that in the Vendor "Cons" section.")
3P sellers, on the other hand, have access to a wide variety of 3P tools to boost the velocity and sales history of brand new products right off the bat.
Pro: Set Commission Fee
3P sellers don't have to worry about the confusing fee percentages Vendors deal with. Theirs are pretty set.
Selling to Amazon vs. Selling on Amazon 6
Pro: Access to EBC Content
This used to be a con--the inability to access A+ content--but Amazon came through with access to Enhanced Brand Content for 3P sellers, which provides nearly all the same benefits.
Learn more about EBC Content in these posts: What is Amazon Enhanced Brand Content? Brand Seller's Guide To Enhanced Brand Content [PDF]
Con: Handling Customer Service & Returns
As a 3P seller, you are truly in control, particularly if you're not using FBA.
That means you're responsible for everything from customer complaints (and the subsequent poor reviews) to the actual shipping and handling of a product to a customer. And if you're not in line with Amazon's policies, you could get suspended.
BONUS: Where Does Vendor Express Come In?
If you're a 3P seller and Amazon hasn't invited you to become a vendor (1P), you can use Vendor Express to get a similar program.
Learn more about Vendor Express in these blogs: What is Amazon Vendor Express? Should Sellers Use Amazon Vendor Express?
Selling to Amazon vs. Selling on Amazon 7
1P (Vendor Central)
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