Amazon Vendor Vs Seller: The Commercial Crossroads For Brand Control, Profitability And Scale

The discussion about how brands sell on Amazon is no longer just about “1P or 3P”. Instead, the focus now shifts to control, profitability, and the development of a long-term retail strategy.

For some, wholesale relationships still offer advantages. These include predictable revenue, no requirement for direct customer management, and a simpler operational process. However, for other brands, the lack of control over aspects like pricing, promotions, and inventory levels is actively damaging profitability, even when sales volume increases.

Why Many Brands Are Re-Evaluating Their Structure

Amazon’s vendor program has become increasingly selective. They now focus on category-critical ranges that deliver both retail margin and volume stability. Consequently, smaller or slower-growing brands are experiencing reduced purchase order frequency and stricter commercial terms. Furthermore, these brands are seeing limited marketing investment.

In contrast, brands seeking agility, pricing control, and cross-channel consistency are finding that Seller Central offers greater flexibility. This allows them to manage their profitability. Crucially, they don’t have to wait for Amazon’s retail algorithm to make that decision.

Ultimately, neither model is inherently superior. The key difference is whether Amazon requires the brand’s product or if the brand’s product needs Amazon.

Operational Control Is Becoming The Competitive Edge

Owning the retail relationship allows brands to control contribution margins, promotional pacing, and stock availability. It also protects global pricing strategies and ensures a consistent customer experience.

In contrast, Amazon’s vendor programs offer different trade-offs. While these programmes reward operational efficiency and high margins, they inherently limit a brand’s autonomy. Therefore, the brands that typically thrive in this environment are those that can offer essential product ranges and reliable supplies. They must also achieve the volume economies necessary to justify Amazon’s substantial purchase investment.

As a result, for a significant number of businesses, the most viable path forward involves a hybrid model. This strategy means keeping core Stock Keeping Units (SKUs) in the wholesale channel. Simultaneously, we manage newer, niche, or seasonal products directly. This approach successfully balances the need for operational efficiency with the desire for commercial control.

At Market Rocket, the team is dedicated to assisting businesses in evaluating their commercial structure. The goal is to determine which approach genuinely supports their long-term growth. This process involves aligning the Amazon strategy with key factors such as contribution margin, scale objectives, and overall channel consistency.

Want to see your Amazon performance skyrocket?  Book a call with our team or email us at amazon@marketrocket.co.uk to take your brand to the next level.