Amazon offers sellers on its platform the opportunity to market and sell products as first-party or third-party sellers in the global e-commerce marketplace. Third-party sellers (3P) are individuals and businesses selling and shipping products directly to customers shopping through the marketplace or Amazon Business.
Many new Amazon sellers confuse 1P and 3P sellers. The primary difference between first-party vendors and third-party Amazon sellers is the management of pricing, shipping, customer service, and inventory. Learn more about the differences between 1P and 3P sellers below.
3P sellers have control over how their product inventory is priced, shipped, and marketed to consumers online. Having full control of how their products sell on Amazon gives 3P sellers the advantage over online merchants who don't have access to built-in Amazon marketing features to help them outsell their competition.
Third-party sellers on Amazon use Seller Central to manage their products and marketing online. Amazon 3P sellers have access to Amazon support services and they use the proprietary Seller Central network to sell products online. The platform's built-in support features include options for product shipping powered by Amazon's team of logistics experts.
Third-party sellers sell products directly to customers shopping their product pages and use Merchant Fulfilled Network (MFN) shipping options or Fulfillment by Amazon (FBA).
FBA services include the following support features.
3P sellers on Amazon have their orders packed and shipped directly to customers. FBA options can include customer-loyalty building promotions like offering free shipping or expedited shipping for buyers with Amazon Prime memberships.
One of the most important parts of the Amazon selling process is getting products delivered to customers in a timely fashion. Amazon makes it easy for third-party sellers to achieve high customer satisfaction ratings and generate more revenue through their built-in FBA and MFN shipping options.
Third-party sellers use the Amazon marketplace or Amazon business marketplace to list and sell merchandise directly to customers. 3P sales account for over half of the total sales on Amazon.
3P Sellers are required to list, price, package, and ship their completed orders — unless they take advantage of using one of the shipping options powered by Amazon. The benefits of using FBA for 3rd-party sellers are faster shipping and built-in customer service options provided by a company with a proven track record in managing logistics.
Amazon sellers with access to Seller Central can log in to manage their product inventory, access their marketer account advertising across Amazon, and update their online storefront design with featured products.
First-party vendors (1P) indirectly sell products to customers through Amazon's proprietary Vendor Central system. In contrast, third-party Amazon sellers advertise, market, and sell their products directly to consumers.
Unlike Vendor Central used by first-party Amazon sellers, Seller Central is available for allowed third-party sellers and doesn't require an invitation from Amazon to log on.
3P sellers who take advantage of using FBA have their products packed and shipped by one of the world's largest global shipping and logistics giants. Amazon Associates respond to shipping inquiries and customer service issues via distributed shipping facilities and warehouses across the world.
Amazon only requires its first-party sellers to fulfill purchase orders, and it handles customer service, product pricing, and shipping.
New sellers interested in joining Amazon's global e-commerce marketplace should start by creating an Amazon seller account online. Once Amazon approves your third-party seller account, follow the steps in Amazon's Become an Amazon Seller Guide to set up your account for maximum sales.
Be prepared to pay Amazon platform fees and monthly seller fees when opening a new account.
The next steps, after paying the required service fees and charges, including setting up product pages and deciding whether to use automatic targeting or manual targeting for Amazon marketing.
Amazon recommends taking advantage of their shipping options for new sellers who don't have their own shipping or logistics services for delivering orders in place. Amazon can handle the logistics of shipping and customer service, so 3P sellers can focus on optimizing their Amazon marketing campaigns and increasing sales.
Third-party products that outperform similar products in the same category may become eligible to be featured in Amazon's top-selling products if their sales rank is in the top 100.
The highest-ranking products on Amazon are assigned a ranking and those in the top 100 have the distinction of displaying Amazon's "Best Seller" tag, which can boost page visits and product sales while increasing customer loyalty.