This article is based on insights shared during the eCommerce Nurse podcast hosted by Carina McLeod, featuring guests Martin Heubel from Consulterce and Rob Murray from eCommerce Nurse.
The hybrid approach, combining Amazon’s 1P (vendor) and 3P (seller) models, has gained traction as a strategy to mitigate risks during challenging negotiations. This model allows vendors to balance their presence on the platform while maintaining control over their sales and rankings.
Why a Hybrid Strategy Matters
Annual terms negotiations often come with Amazon applying significant pressure on vendors to lower costs or meet profitability targets. If disagreements arise, vendors may face suppressed listings or trade stops, leading to revenue losses. By operating a 3P account alongside a 1P relationship, vendors can ensure sales continuity even when facing these challenges.
Benefits of a Hybrid Model
- Sales Protection
A 3P account allows vendors to maintain product availability and rankings during disruptions. - Negotiation Leverage
Vendors with an active 3P presence reduce Amazon’s ability to enforce punitive measures, creating a stronger position in negotiations. - Diversification
Selling through both 1P and 3P ensures vendors aren’t overly reliant on a single channel, minimising risks.
Implementation Tips
- Plan Early: Establish a 3P account well before negotiations begin and integrate it via API with your internal transaction processing for sustainability and scalability.
- Optimise Inventory: Ensure stock availability for both 1P and 3P channels to maintain seamless operations.
- Stay Compliant: Understand the legalities of operating a hybrid model in different regions.
By adopting a hybrid approach, vendors can mitigate risks, maintain sales momentum, and navigate negotiations with confidence.
For more defensive sales strategies that support 1P vendors during annual terms negotiations, see links below:
Why Do Amazon Vendors Need to Be Planning Defensive Sales Strategies Ahead of Their Annual Vendor Negotiations?
Stabilise Sales During Amazon Vendor Terms Negotiations: The Power of Subscribe and Save
Boosting Sales During Negotiations: The Role of Strategic Ad Spend for Amazon Vendors
At eCommerce Nurse, we specialise in crafting tailored strategies to drive long-term growth for Amazon vendors. From account and ads management to data insights, product optimisation, copywriting and design, our team is here to help. Let’s discuss how we can support your Amazon journey—reach out today!
