Editor's note (March 2019): This blog was originally published in April 2017. It has been updated to include new insights and information regarding Amazon's rumored One Vendor.
Amazon sells your products on a wholesale relationship. You send your inventory to Amazon, they control your pricing and your listing displays as "Ships from and sold by Amazon.com."
You sell your products on Amazon's marketplace and you have Amazon fulfill your orders from their fulfillment centers (Fulfillment by Amazon, FBA) and/or you can fulfill orders from your own warehouse or 3rd party warehouses (Fulfillment by Merchant, FBM).
As 3P sellers that control their own brand become successful, they are commonly approached by Amazon Retail about selling direct to Amazon (1P). This is a flattering proposition that should be carefully considered. As with anything, there are pros and cons. This article on 1P vs 3P by our friends at Buy Box Experts is extremely insightful.
Many successful sellers (brands, manufacturers) find themselves in a hybrid arrangement with Amazon where they're selling a portion of their SKUs direct (1P) and the remainder on the marketplace (3P). Amazon's merchandising teams are often selective about the SKUs that they decide to carry 1P. The math needs to make sense, this means some SKUs are left to be sold 3P if at all.
We believe it's most ideal to sell only 3P. This is the surest way to protect your brand. If you sell 1P, we hope you will also find ways to sell at least a subset of your SKUs 3P to take advantage of the benefits outlined above.
March 2019 Update
"Amazon One Vendor" continues to trend in the rumor mill. Sellers making less than $10million and were formerly selling through Amazon Vendor Central (a.k.a. their 1P marketplace) abruptly had orders cancelled on them. We'll continue to update you on new findings as we hear!
Zentail supports sellers that sell on both 1P and 3P. Let us know if you have any questions.
Zentail is a multichannel software platform that makes it easy to sell on Amazon, eBay, Walmart Marketplace, Jet.com, Google Shopping, Google Shopping Actions, Shopify, BigCommerce and a growing selection of channels. Centrally manage product information, listings, inventory, orders, business analytics and reordering from one beautiful interface.