Amazon’s 3P Shift: What It Means for Brands

Amazon’s marketplace is undergoing a major structural shift. In recent quarters, more than 60% of paid units sold on Amazon have come from third-party (3P) sellers, overtaking the traditional first-party (1P) wholesale retail model. This milestone represents not just a shift in numbers, but a transformation in how Amazon operates—and what that means for brands.

Amazon’s Marketplace at a Tipping Point

For Amazon, the 3P model has become the growth engine. While the 1P approach drives massive sales volume, it comes with thinner margins and higher risk, since Amazon takes ownership of inventory. The 3P model, by contrast, enables Amazon to scale profitably by charging seller fees, offering Fulfillment by Amazon (FBA), and layering on services like advertising.

This shift moves the responsibility for stock, pricing, and customer experience onto brands and sellers—while Amazon provides the infrastructure, logistics, and reach. The result is a powerful platform model that continues to expand selection and profitability at unprecedented scale.

From Vendor to Marketplace Seller: A New Brand Mindset

For brands, the message is clear: success on Amazon increasingly requires operating as a marketplace seller, not just a wholesale supplier.

That shift demands a new mindset and capabilities across several key areas:

• Pricing Control: In 1P, Amazon sets the retail price, often without regard for your margin strategy. As a 3P seller, brands take back control, setting pricing to protect both profitability and brand positioning.

• Inventory Management: Instead of relying on Amazon’s purchase orders, brands manage their own inventory flow, ensuring availability and speed to market. This also opens the door to listing a wider assortment—new launches, seasonal bundles, or niche SKUs that Amazon’s buyers may never have stocked.

• Content & Brand Presentation: Product detail pages, images, A+ content, and Stores are all in the brand’s hands under the 3P model. Optimizing content for conversion and maintaining consistency across the catalog becomes mission-critical.

• Compliance & Customer Experience: From product regulations to customer feedback, brands now take direct responsibility for staying compliant and ensuring excellent customer service.

This new role comes with challenges, but it also unlocks powerful opportunities.

Unlocking Growth with 3P

Brands embracing 3P are finding that it delivers more flexibility, better margins, and faster market entry:

• Flexibility in Assortment: Brands can test new products or bundles quickly, without waiting for Amazon’s retail team to approve. A consumer goods company, for example, used a 3P approach to launch new flavor multipacks exclusively on Amazon, building incremental revenue and customer insights.

• Improved Margins: Selling via 3P often results in stronger unit economics compared to wholesale. Instead of wholesale discounts and vendor fees, brands manage referral and fulfillment fees directly, often keeping more per unit sold.

• Faster Market Expansion: Launching into new countries or regions is simpler via the marketplace. With FBA, a brand can scale into multiple countries within weeks, bypassing the long lead times of traditional retail contracts.

Why Partner with a 3P Specialist?

While the rewards are clear, managing a 3P operation is complex and resource-heavy. This is where working with a specialist Amazon 3P partner becomes a strategic advantage.

A strong partner provides:

• End-to-End Account Management – from listing optimization to pricing strategy, advertising, inventory planning, and customer service.

• Brand Protection – ensuring pricing integrity, eliminating unauthorized sellers, and maintaining compliance.

• Data-Driven Insights – leveraging analytics to guide assortment, advertising, and expansion strategies.

• Operational Efficiency – managing fulfillment, logistics, and scalability across regions.

• Improved Profitability – optimizing every part of the P&L to ensure brands are maximizing their Amazon returns.

By partnering with a 3P expert, brands gain the control and benefits of the marketplace model—without having to build the infrastructure and expertise entirely in-house.

Thriving in Amazon’s Platform Era

Amazon is no longer just a retailer—it’s a platform. The brands that thrive are those that embrace the 3P model, investing in strategy, execution, and the right partners.

Those that cling to a vendor-only mindset risk losing visibility, margin, and growth opportunities. Those that act decisively, however, are finding that the 3P model gives them greater control, agility, and profitability.

Now is the time to act.

If your brand is ready to take control of its Amazon growth and unlock the benefits of the 3P model, partnering with an experienced marketplace enabler is the fastest path to success.

At Luzern eCommerce, we help global brands accelerate growth on Amazon by acting as their trusted 3P partner—managing operations, protecting brand equity, and driving profitable sales at scale.

Get in touch
with us today to discuss how we can power your 3P success.