The Advantage of Establishing a First-Party (1P) Relationship with Amazon for Your Bottom Line

This article is part two 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. To read our 3P story, click the link below.

For brands and manufacturers looking to tap into Amazon's massive customer base, understanding the different selling models is crucial to initial (and continued) success. By looking deeper into the 1P (first-party) selling model, we’ll help you explore why it's becoming an increasingly attractive option for many brands like yours, especially compared to the more widely known 3P (third-party) approach.

Key Differences Between 1P and 3P

At its core, the 1P model on Amazon involves selling products directly to Amazon as a wholesale supplier. In this arrangement, Amazon is your brand's retailer, handling crucial aspects of the sales process, such as Pricing, Inventory Management, Fulfillment, and Customer Service.

While the 3P model offers more control over pricing and brand experience, it also comes with increased responsibilities and complexities for your brand. With the 1P model, Amazon is your largest customer, and by selling to Amazon, you’re streamlining many aspects of the selling process for your brand and your manufacturers.

For many enterprise brands and manufacturers, the 1P model is becoming the preferred choice for several reasons:

-Simplicity: By offloading pricing, logistics, and customer service to Amazon, brands can focus on product development and manufacturing.

-Automation: Amazon's sophisticated systems handle reordering and inventory management, reducing the risk of stockouts.

-Access: 1P sellers benefit from Amazon's vast network of fulfillment centers and delivery capabilities.

-Visibility: Products sold through the 1P model often receive preferential treatment in search results and may be eligible for programs like Amazon Prime.

-Credibility: Items sold directly by Amazon can be perceived as more trustworthy by consumers.

Let’s examine what some brands find restrictive about the 3P model and why the 1P model might be best for your brand.

The Complexities of 3P

Many brands have faced significant hurdles when managing a 3P operation on Amazon. To be truly successful on the platform as a 3P seller, your brand will need to have:

• Expertise: The platform's sheer size, coupled with its strict policies and evolving algorithms, makes it difficult for brands to navigate without deep marketplace expertise.
• Efficiency: A full-scale 3P model requires dedicated teams for inventory management, advertising, and customer service—resources that many large enterprises would rather allocate elsewhere.
• Flexibility: Competing in the marketplace means constant price adjustments, ad spend optimization, and fulfillment costs, whereas 1P eliminates these variables.
• Resources: Managing a seller account requires expertise in logistics, compliance, and brand protection, which can be challenging for companies focused on wholesale distribution.

Why the 1P Amazon Model Could be Right for You

For larger brands and enterprises, 1P operates like any other major retail relationship—your main focus is securing purchase orders (POs) and ensuring supply chain efficiency. Beyond that, Amazon will handle everything from pricing and fulfillment to customer service and returns. One of the key advantages of selling via 1P is how effortless and scalable it can be for your brand, especially if you prefer a wholesale model. Amazon will purchase inventory from your brand and resell it, allowing for increased sales and reduced operational headaches for you.

Plus, unlike 3P, where sellers must account for seller fees, fulfillment fees, and advertising costs, 1P streamlines costs into a wholesale arrangement. While Amazon’s payment terms vary, 1P brands often experience more predictable and structured payment cycles compared to the fluctuating cash flow of a 3P model.

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.

Let’s Select the Right Model for Your Brand

Ultimately, your choice to adopt a 1P, 3P, or hybrid Amazon strategy depends on your brand’s unique priorities and strengths. While 3P provides control and flexibility, 1P simplifies the retail experience, offering a hands-off approach that leverages Amazon’s infrastructure for rapid scalability and streamlined operations.

Creating next-level Amazon strategies is our specialty. Our Marketplace Partnership team is ready to hear you out and weigh the options to determine the most successful path for your brand. Contact us today to learn how we can optimize your marketplace presence for long-term profitability and unprecedented success.