The two selling models at Amazon

The Two Selling Models at Amazon

If you’ve been buying stuff on Amazon, you will notice that some products are offered by Amazon “direct”, others by the infamous 3rd party sellers (3P’s) and still others are offered by both. In general, most consumers feel that buying something sold and fulfilled directly by Amazon is the safer bet. Many consumers don’t even look at the pages listing all the sellers. They just click on the main page and add it to their cart.  When that happens, the vendor listed on that main page (Amazon or 3rd party) has “won the buy box”. A very coveted position for Amazon sellers indeed.

 

If your company is selling products on Amazon, you probably know there are two sides of the Amazon retail house: Direct and 3rd Party (3P). There is a lead manager in each product category like “electronics”, “health and beauty”, “computers”, etc. usually called the Category Leader.

 

The “direct” side is the products that Amazon buys themselves, like a regular retailer.  The 3rd Party is all the other sellers, individuals or businesses, that use the Amazon platform to sell goods. In many ways, these two “sides of the house” at Amazon compete. Both sides have goals to meet and various metrics to ideally keep things in balance. But the competition stops at the category leader level. The category leader is the Amazon manager responsible for a category such as Consumer Electronics or Health and Beauty.  

 

Originally, Amazon assigned a separate category Leader for Amazon Direct and a separate one for the 3rd party sellers. But that changed back in 2016 when, without announcing it to their Vendors, Amazon merged the two Category Leader jobs into one.  And that, to me, represents a real conflict within the Amazon model (but that’s another story).

 

So now, it’s the single category leaders’ job to keep things in check on both the 3rd party seller side and the direct side of the retail business. In my experience, I have found that this creates some conflicts that sometimes make resolution difficult. This is an aspect of Amazon that the typical seller or vendor never sees but if your brand and annual revenue on Amazon are significant, you will eventually bump into it.

 

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