How to move your brand from Amazon vendor (1P) to Amazon seller (3P)

Right, so – before we jump into the nitty gritty of how to move your brand from 1P to 3P, we really should take some time out to understand why it makes sense to make the transition.

Why moving your brand from Amazon Vendor to Amazon Seller makes sense

This transition is a fantastic move for most brands and here’s why:

When you have a 3P relationship with Amazon, it gives you vastly more control over how you price your products, and in a way that’s clean across all your channels. This is a key advantage because it improves both your profitability and brand reputation.

Now, as a 1P seller, Amazon exercises a fairly high degree of control over your products, which can often be detrimental to your brand. For example, if we go back to March 2019, Amazon (without warning) curbed product orders for a large majority of 1P sellers, creating panic among vendors who literally couldn’t do a thing about it.

When you transition to a 3P seller, you automatically have better brand flexibility, insight, control, and subsequently, long-term success on Amazon.

Furthermore, in a 3P relationship, you get to control your pricing, inventory, listing, and brand representation. No dealing with headaches related to content changes, unauthorised listings, 1P backend costs, AVN, etc. – none of that nonsense!

Now, let’s get to the good stuff, shall we?

How to move your brand from 1P to 3P on Amazon

Have you received that dreaded email from Amazon, where it says something along the lines of:

“We have made the decision to stop sourcing products from your company as part of our regular review of product offerings….”?

Does the email message mention the November 9, 2024 date on which Amazon will terminate its vendor relationship with you?

Even if you’ve missed the email somehow, you need to act now!

The BIG announcement that Amazon is cutting back on vendor accounts is spreading like wildfire in the Amazon seller community. Regardless of whether you have received the email telling you that Amazon will do away with its vendor relationship with you by November 9, this practical guide I’ve prepared on how to transition to 3P is all you need.

Did you know that 90% of our 1P vendor clients are now selling on a hybrid model with 3P to maximise their brand growth on Amazon? A hybrid approach actually lets you maintain control over many important aspects, such as pricing and inventory, as you strategically leverage Amazon’s infrastructure in aspects like marketing and fulfilment on key products.

Here’s how you can make the most of the next two months:

Step #1

If you don’t have one already, create yourself a seller account. Just make sure you have all your beneficial owners over 25% ID requirements, all lined up along with company documentation on hand from Companies House.

Step #2

Access Amazon Brand Registry (ABR) and ensure your IP is connected to your new seller account. This is absolutely imperative not just for control’s sake but also to be able to tap into the customer base which has brought from your brand previously. Always remember that Seller has way more brand tools and better reporting than Vendor!

Golden tip: Been on vendor for a long time? You likely have access to historic brand tools allowing you to access A+ or brand store, for example, without actually being enrolled in Brand Registry. If this is the case then you should get your IP registered in Brand Registry without delay.

Step #3

At present, we do not know how Amazon will handle “contributions”. Typically, Vendor has always had the upper hand in terms of control of brand contributions, although we are hoping that once Amazon dismisses these vendor relationships, they will also severe the content contributions. And if they do, that essentially means you will need to get on top of Brand Registry and exercise control of your IP IMMEDIATELY to avoid making changes to content.

Step #4

Conduct a data download of ALL your ASINs now and import them into your new seller account. Manually connect them to the brand as now is a good time to do any spring cleaning and tidying up.

Step #5

Identify bestsellers and active POs from your account and make sure you have prioritised the distribution for these products, either through FBA and fulfillment or with another trusted retailer.

Golden tip: If you’re doing £3m+ a year on Amazon vendor, we may be able to get you onto Amazon Seller Flex.

Step #6

Many Amazon vendors are typically setup for “pure play” logistics and may find it difficult to move to the logistic structure of FBA or single sale volume. We recommend having a discussion with a 3PL as soon as possible to work on your priority lines.

Step #7

Your advertising account will cease and you will need to port over your successful ad structure into a new Seller Central Amazon Ads account which will need new billing details. You will not get the same immediate results in terms of TACOS and ROI straight away, in our experience, but porting over successful ad structures on live ASINS is imperative. Try your best to make sure you are not propping your ads up against Buy Box competition with any existing vendor stock.

If I missed anything, let me know in the comments below. If any of this isn’t clear, please don’t hesitate to reach out to me: +44 1743 816191. I am always available and happy to help!

If you’re (for some insane reason) on the fence about transitioning to 3P, then here are some key considerations:

Higher profit margins: Set your own retail prices, allowing for potentially higher profits compared to the wholesale pricing structure of 1P.

Control over branding: Have more flexibility in how you present their products, including branding, product descriptions, and images.

Inventory management: Choose how much inventory to keep, allowing for tailored strategies based on demand and sales trends.

Flexibility in pricing: Adjust prices based on market conditions, competition, and promotions, enabling more agile pricing strategies.

Access to multiple fulfilment options: Choose between Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM), allowing you to select the fulfilment method that best fits your business model.

Direct customer relationship: Build direct relationships with customers, fostering brand loyalty and repeat purchases.

Diverse sales strategies: Employ various marketing strategies, such as promotions and advertising, to enhance visibility and sales.

Potential for Global Reach: Easily expand into other Amazon marketplaces, reaching international customers.

We believe these advantages make the 3P model an attractive option for any seller looking to maximise their business potential on Amazon.

Many of my LinkedIn connections have shared the “November 9” screenshot with me and, to be perfectly honest, it 100% encapsulates why ALL 1P vendors should on a hybrid model (1P and 3P) at the minimum or, at least, have the ability to do so. If you’re already on a hybrid model, brilliant! You’ll be able to adapt pretty quickly and have less disruption to your business than those who are not and have already received this email – effectively giving them under 2 months to save their Amazon business!

We have a successful track record in both vendor and seller growth, and if this has affected you, please get in touch without delay. We can help you make a seamless transition. You might also be able to join us through the EU Amazon agency programme as a “new seller”, to enjoy additional support and incentives.

Common misconceptions around 1P-3P transition

Some sellers have been on the fence, unfortunately, due to these common misconceptions around the 1P to 3P transition, which include:

1P sellers tend to have better organic rankings
Amazon has deep-reaching pockets and can fulfil bigger orders
Transitioning to 3P will lead to a sales drop after brands start fulfiling orders directly to buyers

The fact of the matter is sell-through is driven by the right digital marketing strategies around both organic placement and paid advertising, as well as your ability to drive sell-through there. In my experience, your traffic, conversions, and price control on Amazon will be far more effective through a 3P model or a hybrid one.

Pros and cons of 3P selling

Pros

Better control over pricing and branding; set your own prices and maintain more control over brand image as well as messaging.
Access customer data; access valuable customer data directly to build longer-lasting relationships and make your marketing more targeted.
Greater flexibility; manage inventory, select fulfilment methods, and set sales strategies as you like.

Cons

Stiff competition; unsurprisingly, the 3P marketplace has fierce competition, which means more marketing and advertising to stand out.
Inventory management; inventory and fulfilment must be managed very carefully to prevent stockouts/overstocking.
Customer trust; as a new 3P seller, it might take time to build buyer trust, as most buyers prefer to buy from FP vendors and established brands.

Get in touch with me now to take full advantage of the 3P and hybrid selling model: +44 1743 816191.