1P / 3P

Business Model

First-party (1P) sellers sell wholesale to Amazon; Amazon then retails the products. Third-party (3P) sellers sell directly to consumers via Seller Central. Most EU marketplace sellers operate 3P.

First-party (1P) sellers engage in wholesale transactions with Amazon, which then retails the products on its platform. This model is prevalent among larger brands that prefer to offload inventory risk, while third-party (3P) sellers operate via Seller Central, directly reaching consumers. Approximately 60% of sales on EU marketplaces come from 3P sellers, highlighting their dominance. 3P sellers incur various fees, including a referral fee that ranges from 7% to 15% depending on the category, and they must also manage their own inventory and fulfillment, unlike 1P sellers who benefit from Amazon's logistics. The trade-off for 3P sellers includes less control over pricing and brand representation, as Amazon can adjust prices based on its algorithms. In contrast, 1P sellers often face longer payment cycles, typically receiving payments every 14 days, compared to 3P sellers who can access funds more quickly. Additionally, 1P sellers may need to adhere to Amazon's Vendor Central policies, which can include promotional requirements and markdowns. The choice between 1P and 3P models often hinges on a seller's operational capacity, brand strategy, and willingness to engage with Amazon's terms. Sellers should evaluate their business goals and market positioning in the EU, particularly in key markets like DE, FR, and IT.

Relacionado: Vendor Central, Seller Central