Episode 330 - Amazon 1P vs 3P: Which Model Wins in 2026

The Smartest Amazon Seller · with Matt Snyder · June 2, 2026 · 25 min

Summary

Amazon's 1P (Vendor Central) business is resurging, making the 1P vs. 3P (Seller Central) decision more critical than ever. This episode breaks down the complexities of both models, revealing why larger brands are thriving and how factors like tariffs, inventory, and operational overhead are pressuring mid-sized sellers. Learn when to pivot between 1P and 3P, navigate internal roadblocks, and leverage Amazon resources to optimize your selling strategy for success in 2026.

Key takeaways

• Understand that Amazon's 1P model is gaining traction, driven by larger brands' ability to navigate tariffs, inventory, and operational complexities, impacting mid-sized 3P sellers.
• Identify categories like grocery and consumables where Amazon's subsidies can make a 3P to 1P transition advantageous, proving there's no one-size-fits-all model.
• Leverage Amazon's New Seller Success team and internal Amazon Leadership Principles to overcome roadblocks when transitioning between 1P and 3P, especially concerning content ownership and listing control.
• Develop an agile strategy to pivot between Amazon's 1P and 3P models based on evolving factors like AI, social commerce, and marketplace economics to ensure sustained growth.
• Recognize that despite the allure of 3P control, large brands still face significant challenges in transitioning from 1P, often due to entrenched vendor agreements and content limitations.

Themes

Topics covered

Episode description

Scott is with Matt Snyder, founder of Brands Excel, to discuss one of the most misunderstood transitions on Amazon: moving between Vendor Central (1P) and Seller Central (3P).After years of third-party sellers gaining share, Amazon’s first-party retail business appears to be growing again. Matt explains how tariffs, inventory challenges, margin pressure, and operational complexity have made life harder for many mid-sized sellers, while larger brands continue capturing more market share.The result is a marketplace where the biggest players keep getting bigger.He details the transition from 1P to 3P, including the internal roadblocks that can prevent brands from gaining control of listings, content, and catalogs. Matt also shares how Amazon’s New Seller Success team can sometimes help brands navigate these challenges.Scott and Matt also look at the reverse trend. These are brands moving from 3P back to 1P. In categories like grocery and consumables, Amazon may subsidize pricing and logistics in ways that make the vendor model attractive.There is no perfect model.As ecommerce evolves through AI, social commerce, and changing marketplace economics, brands that know when to shift strategies and navigate the messy middle will be best positioned for growth. Episode Notes: 00:09 - Amazon retail (1P) begins gaining share again relative to 3P sellers01:54 - Why larger brands are capturing more market share03:12 - Pattern and the rise of large marketplace operators04:58 - Common reasons brands consider moving from 1P to 3P06:53 - Vendor agreements and the challenges of opening a Seller Central account08:16 - Using Amazon leadership principles to gain internal support10:32 - How Amazon's New Seller Success team can help transitions12:02 - Why 1P to 3P transitions remain difficult for large brands13:40 - Content ownership, listing control, and vendor contribution issues14:54 - The emerging trend of 3P brands moving to 1P16:12 - Categories where the vendor model can still outpe

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Frequently asked about this episode

What does this episode say about amazon & marketplaces?

Understand that Amazon's 1P model is gaining traction, driven by larger brands' ability to navigate tariffs, inventory, and operational complexities, impacting mid-sized 3P sellers.

What does this episode say about supply chain & operations?

Identify categories like grocery and consumables where Amazon's subsidies can make a 3P to 1P transition advantageous, proving there's no one-size-fits-all model.

What does this episode say about brand & content?

Leverage Amazon's New Seller Success team and internal Amazon Leadership Principles to overcome roadblocks when transitioning between 1P and 3P, especially concerning content ownership and listing control.

What does this episode say about founder & leadership?

Develop an agile strategy to pivot between Amazon's 1P and 3P models based on evolving factors like AI, social commerce, and marketplace economics to ensure sustained growth.

What does this episode say about amazon & marketplaces?

Recognize that despite the allure of 3P control, large brands still face significant challenges in transitioning from 1P, often due to entrenched vendor agreements and content limitations.

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