One of the most common questions I hear from Amazon vendors is whether they should move from Vendor Central (1P) to Seller Central (3P).
The conversation usually begins after a period of frustration.
A cost increase request was rejected. Amazon is asking for additional funding through AVN negotiations. Purchase orders have become less predictable. A product has been identified as CRaP. Leadership wants more control over pricing, inventory, or assortment decisions. Sometimes the catalyst is simpler than that. A consultant recommends Seller Central. A peer company makes the switch. Someone attends a conference and comes away convinced that 3P is the future.
Regardless of how the conversation starts, the underlying assumption is often the same: changing the channel model will improve the business.
Sometimes that assumption is correct.
More often, I find that organizations begin evaluating channel models before they have clearly defined what they are trying to accomplish.
That may sound like a subtle distinction, but it tends to shape the entire discussion. The strongest Amazon businesses I’ve worked with rarely begin by asking whether they should be 1P or 3P. They begin by deciding what role Amazon should play in the business. Once that question is answered, the channel model often becomes much easier to evaluate.
When a leadership team asks whether it should move from 1P to 3P, the discussion is rarely about channel architecture.
It is usually about something else.
Sometimes the organization wants greater control. Sometimes it wants better economics. Sometimes it wants faster decision-making or more flexibility. In other situations, leadership is simply frustrated with the vendor relationship and assumes a different model will eliminate those frustrations.
What makes these conversations challenging is that the stated problem and the actual problem are not always the same.
Over the years, I’ve seen organizations spend months debating channel models while largely ignoring the issues that were limiting performance in the first place. Ownership was unclear. Decision-making was slow. Priorities conflicted. Nobody was accountable for outcomes. The business lacked an operating rhythm. The channel model became the focal point because it felt like a tangible decision, even though the underlying issues had very little to do with whether the company operated through Vendor Central or Seller Central.
This is one reason channel model discussions often produce disappointing results. The organization changes the structure but leaves the operating system untouched. Predictably, many of the same problems reappear after the transition.
Most channel model comparisons focus on control.
That makes sense because control is one of the most obvious differences between Vendor Central and Seller Central.
Under a traditional 1P relationship, Amazon purchases inventory from the vendor and becomes the retailer. Amazon controls retail pricing, owns the inventory after purchase, and manages the customer transaction. For organizations built around wholesale and retail relationships, this model often feels familiar because it resembles how they already operate with distributors and retailers elsewhere in the business.
Seller Central changes that dynamic considerably. Brands gain greater influence over pricing, assortment decisions, inventory planning, advertising strategy, and many other aspects of the business. Understandably, this additional control is attractive to many leadership teams.
What is often overlooked, however, is that control and responsibility tend to increase together.
A company that controls pricing must also manage pricing.
A company that controls inventory must also manage inventory.
A company that controls fulfillment must also manage fulfillment.
The benefits of control are real, but so are the obligations that accompany them.
This is one reason some organizations are disappointed after moving to Seller Central. They expected greater control to solve existing problems. Instead, they discovered that they had simply assumed responsibility for solving those problems themselves.
The move created new responsibilities without necessarily creating new capabilities.
The immense popularity of Seller Central has created an impression in some circles that Vendor Central is inherently inferior.
I don’t believe that’s true.
Many of the strongest Amazon businesses I’ve encountered operate very successfully through Vendor Central. In most cases, those organizations share a common characteristic: the model aligns with how the broader business is designed to operate.
Companies with strong wholesale DNA often fit naturally within Vendor Central because the relationship resembles other commercial relationships they already manage. The organization is comfortable selling to retailers. Forecasting, manufacturing, and supply chain planning are already structured around wholesale distribution. Internal teams understand how to manage retailer relationships and retailer economics.
For these businesses, Vendor Central often feels less like a compromise and more like a natural extension of existing capabilities.
The fact that Amazon becomes the retailer is not viewed as a disadvantage. It is viewed as the operating model the organization already understands.
The same principle applies in the opposite direction.
Organizations that have invested heavily in direct-to-consumer (DTC) capabilities often find Seller Central aligns naturally with how they already think about commerce. These businesses are accustomed to controlling assortment decisions, managing inventory directly, optimizing pricing, and owning the customer experience.
For them, the additional responsibilities associated with Seller Central may feel less burdensome because many of the required capabilities already exist elsewhere in the organization.
The key observation is that successful Seller Central businesses are not necessarily succeeding because they chose 3P.
They are often succeeding because the channel model aligns with their capabilities.
That distinction matters because it shifts the conversation away from which model is superior and toward whether the organization is equipped to execute within the model it chooses.
The discussion becomes even more interesting when 2P is introduced.
While the term means different things to different people, it is increasingly used to describe arrangements where a specialized partner manages a 1P vendor business on behalf of the brand.
These relationships can be highly effective in certain situations. Some brands lack the expertise required to operate successfully on Amazon. Others may have lost access to Vendor Central or may not qualify for a direct vendor relationship. In those situations, outsourcing can provide capabilities and experience that would otherwise take years to build internally.
The tradeoff is that another organization now sits between the brand and Amazon.
That is not inherently good or bad.
It is simply a question of ownership.
One of the recurring patterns I’ve observed throughout my career is that very few organizations will ever care about a brand’s long-term interests as much as the brand itself. A capable partner can create tremendous value, but leadership teams should still think carefully about which decisions they want to own and which decisions they are comfortable delegating.
One of the reasons I find these discussions so interesting is that successful examples exist across every model.
I’ve worked with highly successful Vendor Central businesses.
I’ve worked with highly successful Seller Central businesses.
I’ve worked with highly successful hybrid and outsourced arrangements.
I’ve also seen poorly run versions of all three.
The difference was rarely the channel model itself.
More often, the difference came down to ownership, decision-making, accountability, execution, and operating rhythm. The organizations that performed well tended to have clarity around those fundamentals regardless of which model they used.
That observation has shaped my view of channel strategy over time.
The channel model matters. It influences economics, responsibilities, incentives, and execution. It is an important decision.
It is simply not the most important decision.
The more important decision is determining what role Amazon should play in the business and building the capabilities required to execute that strategy effectively.
Once those decisions have been made, the appropriate channel model often becomes much more obvious.
Organizations often approach the 1P versus 3P question as though they are choosing between competing philosophies.
In reality, they are choosing between different operating models.
Each model creates advantages. Each model creates tradeoffs. Each model can succeed when aligned with the organization’s objectives, capabilities, and broader commercial strategy.
That is why I generally encourage leadership teams to spend less time asking which model is best and more time clarifying what they are trying to accomplish.
The strongest Amazon businesses are not successful because they selected the perfect channel model.
They are successful because they built an operating system that allows them to execute effectively within the model they chose.
