From 1P to 3P: What’s Best for Small + Medium Sized Manufacturers?
In March, Amazon gave us a preview of their corporate initiative to consolidate vendors and to enrich the consumer experience. Unfortunately, they shut off orders for many “1P” (Direct) suppliers without as much as a goodbye letter. Since then, Amazon has walked back this decision for many suppliers, however rumors are rife that Phase II is coming. The old saying “the best defense is a good offense” could not be more appropriate in your relationship with Amazon. Building a strong e-commerce strategy within your entire multi-channel business is vitally important in order to support sustainable growth for years to come. Allowing Amazon to direct your business is not wise or sustainable and probably does not support your corporate goals.
If you are a small to mid-size customer currently selling on Amazon, chances are you will be forced to create a “3P” account (third party account) and start selling as a direct seller within the foreseeable future. This is NOT A BAD thing, in fact just the opposite. Taking control of the supply chain, limiting the customers allowed to sell your products, and protecting your coveted margin is a sound strategy!
Developing a long-term e-commerce strategy takes commitment and ongoing planning, especially if you have been active in the channel for a couple of years. The ability to limit the number of customers within the channel and support channel rules can be difficult when we have been accustomed to “the more customers the better” paradigm. I urge you to stand strong and your patience will be rewarded.
Highlands e-commerce is a channel advisor that focuses on building a strong multi-channel strategy and understands how to build a profitable and sustainable Amazon marketplace presence. Sound agreements and channel rules will be the key to your long-term success – not only with Amazon but throughout your entire e-commerce platform.
If you are interested in discussing your e-commerce needs, please feel free to email me at [email protected].
Read how Highlands e-commerce helped one mid-sized manufacturer increase exposure, impressions and sales here.