How Brands Can Win on Amazon With a 3P Marketplace Strategy [Webinar Recap]

E-commerce has become a highly sophisticated and complex landscape, with modern marketplaces at the core. Consumers are increasingly shifting their shopping behavior to marketplaces over brand and retailer websites, using these digital destinations for every phase of their purchase journey, from discovery to price comparison to conversion.

The top 100 online marketplaces worldwide sold $1.66 trillion worth of goods in 2018, generating a staggering 50% of global e-commerce sales for that year. Furthermore, Amazon’s U.S. marketplace alone sold over $275 billion worth of goods globally, representing 58% of total Amazon sales worldwide. To put that into perspective, Amazon sellers sold just $100 million worth of goods 20 years ago. 

Indeed, Amazon’s marketplace is at the center of e-commerce disruption, and the platform is increasingly the first stop in a shopper’s path to purchase — 66% of consumers say they begin their search for new products on Amazon.

In addition, Amazon is not only a destination where consumers search for new products but also where they discover new brands. As such, Amazon has become a pivotal entry point that more often sets the tone for the brand and customer experience, and it is increasingly crucial for brands to identify ways they can leverage the platform to better engage with consumers.

However, implementing an Amazon strategy poses a unique set of challenges, from unauthorized sellers to counterfeits to the lack of control over brand representation, among others. Brands on Amazon experienced a particularly tumultuous year in 2019, which began with foreboding rumors about the company’s supposed push of 1P brands to its 3P marketplace.

While the rumors did not quite materialize as drastically as expected, the possibility of this occurring still exists — and many brands are rethinking their Amazon strategies, as a result. Is an Amazon 3P marketplace strategy right for your brand? What are the benefits and opportunities you can leverage to acquire new customers, increase sales volume, and preserve your brand value? 

In this webinar, “Why Brands Need a 3P Marketplace Strategy on Amazon,” Feedvisor VP of Sales Brian Liebman outlines Amazon’s importance to brands’ e-commerce strategies and reveals key tactics for brands to maximize their marketplace impact.

Amazon 1P vs. 3P

Here, Brian outlined the differences between a 1P and 3P selling strategy on Amazon.

Amazon 1P:

• The brand operates as the wholesaler and Amazon operates as the retailer, controlling merchandising, inventory levels, and so on.
• Amazon controls most of the brand and customer experience, such as pricing.
• Brands have access to Amazon marketing features, like specialty badges.
• Amazon handles the supply chain and fulfillment, and ultimately owns the product.

Amazon 3P:

• The brand sells directly to consumers and acts as the retailer, controlling merchandising assortment, levels of inventory, and more.
• The brand controls all aspects of both the brand and customer experience, including pricing, marketing, and brand messaging.
• The brand manages inventory levels at Amazon FBA or its own warehouse, and owns the product.