How Launching a 3P Marketplace Partner Helps Maintain Control of Your Brand, Logistics & Pricing
This article is part one of a two-part series exploring the 3P and 1P models on Amazon. At Front Row, we have deep expertise in both approaches and work closely with brands to determine the best fit for their unique needs. There is no one-size-fits-all solution—every brand requires a tailored strategy that aligns with its goals, operational capabilities, and long-term vision. Whether 1P, 3P, or a hybrid model is right for you, Front Row provides the strategic guidance to help you succeed.
The third-party (3P) seller model on Amazon allows your brand to directly sell to consumers through the Amazon marketplace and categorizes your products under one of Amazon’s many verticals. Unlike the first-party (1P) model, where Amazon purchases inventory wholesale from you and sells it, the 3P model gives brands full control over listings, pricing, and fulfillment strategy. While 3P offers an abundance of control, that autonomy could be a double-edged sword.
Luckily, there are steps you can take to maintain control of your brand’s operation without drowning in choice overload, a phenomenon where excessive options can lead to decision fatigue and inefficiency. Before we cover those steps, let’s take a look at key differences between these two models, and dissect why 3P could be the right choice for your brand.
3P vs. 1P: Key Differences
- 1P Seller: You sell directly to Amazon as a wholesale supplier. Amazon sets the price, controls inventory, and handles logistics.
- 3P Seller: You sell directly to consumers via Amazon’s marketplace, managing pricing, branding, fulfillment, and inventory yourself (or via partners like Front Row).
While the 1P model offers convenience, the 3P model provides flexibility, profitability, and control over your brand’s presence and representation on the marketplace.
Why Brands Choose the 3P Model
For brands in the beauty, health, wellness, and consumer package goods (CPG) ecosystems, maintaining brand control is paramount to control your narrative and message. The 3P model offers several advantages that empower brands to scale effectively on Amazon:
- Brand Control: Maintain full ownership of your product listings, creative assets, and messaging.
- Price Autonomy: Set and adjust your pricing based on market demand and profitability goals.
- Logistics Flexibility: Choose between Amazon’s Fulfillment by Amazon (FBA) or your own fulfillment network.
- Higher Margins: Avoid wholesales pricing constraints and maximize revenue potential.
Navigating 3P: Key Areas to Master
Amazon is a crowded marketplace across all major verticals, especially beauty, health, CPG, and wellness. The beauty space in particular has seen a surge in new brands over the past few years, and with over 100,000 beauty brands fighting for market share, standing out in a sea of competitors is more challenging than ever. And with roughly 100 million unique beauty shoppers visiting Amazon per month, eMarketer is calling the marketplace a channel beauty brands can’t ignore.
Despite the overwhelming abundance of product offerings, there are still ways your brand can stand out from the competition. Success on Amazon as a 3P seller is multifaceted, and takes strategic planning in the following areas:
Branding
With the 3P model, you can control your product pages, A+ content, brand store, and advertising strategy. Investing in high-quality images and renders, compelling product descriptions, and a cohesive storefront builds trust and drives conversions. Your brand needs to feel connected throughout your product offering, conveying to customers that your image is cohesive and worth investment.
Pricing
Unlike the 1P model, where Amazon dictates pricing, 3P sellers set their own prices. This enables brands to avoid price erosion, maintain MAP (Minimal Advertised Price) policies, and optimize pricing strategies based on market trends. Tools like dynamic repricing software and performance analytics help brands stay competitive without sacrificing margins. But as the 3P experience goes, staying up to date with the latest software, pricing algorithms, and marketplace trends adds yet another layer of complexity to an already intricate selling model.
Logistics & Fulfillment
A seamless fulfillment strategy is critical to success on Amazon. The 3P model offers two primary options:
- Fulfillment by Amazon (FBA): Amazon handles storage, shipping, and customer service, ensuring Prime eligibility and fast shipping.
FBA is a popular choice for brands looking to leverage Amazon’s logistics network. With FBA, Amazon stores, picks, packs, and ships products on behalf of the seller. Other benefits include:
- Amazon Prime eligibility
- Higher buy box win rates
- Customer service & returns handled by Amazon
This model allows you to focus on growth without investing in warehouse infrastructure. However, the model isn’t perfect. You’ll likely experience high fees and costs for storage, fulfillment and returns. Amazon also penalizes slow-moving inventory with hefty storage fees.
Your brand will also have less control over your branding. Once your product enters Amazon’s fulfillment centers, you’ll have limited visibility on how items are stored, shipped, and packed.
- Fulfillment by Merchant (FBM): Brands manage their own fulfillment, offering more control over costs and inventory.
- FBM is a popular choice for sellers who already have experience and the infrastructure to accommodate storage, shipping, and customer service. With FBM your brand will experience:
- Lower fees and cost control
- More control over inventory
- Multi-channel flexibility (sellers on multiple marketplaces)
No model is perfect. With FBM, your brand won’t be automatically Prime eligible. Additionally, Amazon’s algorithms often favor FBA listings for Buy Box, which can impact your bottom line. On the contrary to the benefits, brands are completely responsible for shipping, logistics, and customer service. This isn’t an issue for larger enterprises, but can be an issue for smaller sellers.
The Hybrid Approach: Balancing Efficiency & Profitability
Many successful brands on Amazon take a hybrid approach, leveraging both FBA and FBM to maximize flexibility and cost efficiency. Here are some ways leveraging both models can be beneficial for your business:
- FBA for Fast-Selling, Small, or High-Margin Items
- Ensures Prime eligibility and fast shipping for competitive, high-demand products.
- FBM for Low-Turnover, Oversized, or Seasonal Items
- Helps brands avoid excessive FBA storage fees and maintain control over logistics.
- Redundancy & Risk Management
- If Amazon’s warehouses run out of stock (or suspend FBA shipments during peak seasons), having an FBM backup ensures continued sales.
- Multi-Channel Selling
- Brands selling outside of Amazon (on DTC websites or other marketplaces) can use FBM to manage inventory across platforms without restrictions.
Information & Management Overload: The Challenges with 3P
Managing a 3P business on Amazon is not just about listing products – it requires constant oversight across multiple moving parts. The autonomy of the 3P model is empowering but it also introduces complexity that can quickly become overwhelming. Pain points include:
- Platform Complexity & Ever-Changing Rules
- Amazon frequently updates its policies, algorithms, and compliance requirements, requiring brands to stay vigilant and adapt quickly.
- Data Overload & Decision Fatigue
- Brands must analyze vast amounts of data—from pricing trends to ad performance—while making real-time strategic decisions to stay competitive.
- Technology Stack Management
- Sellers rely on multiple software solutions for inventory tracking, dynamic pricing, advertising, and fulfillment optimization, adding another layer of complexity.
- Logistics Coordination
- Whether using FBA, FBM, or a hybrid model, managing inventory levels, fulfillment speed, and return logistics requires precision and constant monitoring.
- Marketing & Brand Protection
- Running PPC campaigns, optimizing listings, managing customer reviews, and preventing unauthorized resellers is a full-time effort.
- Operational Bandwidth
- Many brands find that managing a 3P business in-house is resource-intensive, requiring dedicated teams or external partners to handle the workload effectively.
Unlocking Scalable Success with Front Row
While there are unique challenges with 3P, the benefits can be extremely advantageous for your bottom line and branding on Amazon. The complexities of 3P require more than just marketplace expertise – it demands a strategic approach that aligns with your brand’s long-term vision. At Front Row, we provide the guidance, data-driven insights, and industry expertise needed to protect brand equity while maximizing your impact on Amazon.
Whether you’re managing a single brand or an entire portfolio, we ensure your marketplace presence aligns with your overall strategy, driving growth without compromising brand integrity. Your brand’s image, language, and message are at the core of your business—and that’s exactly why the 3P model is so powerful. Our goal is to protect and amplify what makes your brand unique. We’ll handle the heavy lifting so you can focus on what makes your product exceptional.
Ready to take control of your Amazon strategy? Let’s build a 3P approach that works for your brand.
