Operational Tradeoffs of Amazon Selling Models: 1P vs 3P vs Resellers vs Hybrid

1P vs 3P vs Resellers vs Hybrid Amazon Selling Models (image by Freepik.com)

Although Amazon and the Ecommerce industry has been around for approximately 30 years, they are still emerging channels for most B2B manufacturers. These new channels require traditional manufacturers to fundamentally rethink how they operate, especially on Amazon. Order sizes, how orders are processed, how inventory is managed, and how a company’s finance team recognizes revenue can be dramatically different from more traditional operating models. Of course, that doesn’t mean B2B firms should shy away from Amazon. The opportunity is significant, but operational complexity can be as well.

When developing an Amazon program, the most consequential decision that impacts potential operational changes or adjustments is choosing your selling model. Each approach, whether Vendor Central (1P), Seller Central (3P), a hybrid model that uses both, or a reseller model, carries its own set of tradeoffs that will ripple across your entire organization.

Let’s take a closer look at each selling model and their potential operational tradeoffs when selling on Amazon.

Amazon Selling Model Definitions

Before we dive into the operational tradeoffs, let’s take a moment to define each of the selling approaches.

Vendor Central (1P)

In a 1P relationship, Amazon acts as the direct customer. Amazon purchases your products wholesale via purchase order, controls pricing, and handles fulfillment. You ship inventory in bulk to Amazon's warehouses and get paid on standard net terms.

Seller Central (3P)

In a 3P relationship, you sell directly to buyers through Amazon's marketplace (Amazon does not buy the product from you). You control pricing, manage inventory, and choose how orders are fulfilled, either by shipping directly to customers or by storing inventory in Amazon's warehouses through Fulfillment by Amazon (FBA). In some cases, B2B manufacturers will work with a qualified third-party fulfillment partner. 

Authorized Resellers

Similar to 1P selling, this model uses authorized third-party resellers who purchase your products on a wholesale basis and sell them on Amazon independently. The reseller becomes the seller of record on Amazon, managing their own pricing, inventory, and fulfillment. You maintain a traditional wholesale relationship with the reseller while gaining some presence on the platform. 

Hybrid

A hybrid approach combines two or more selling methods simultaneously. A manufacturer might use 1P for certain product lines while running 3P for others, or incorporate resellers to cover gaps in inventory or assortment. It offers flexibility but requires managing multiple operational models at once.

While these selling methods may seem straightforward on the surface, it’s important to understand that there are many operational differences in terms of how they’re executed. In some cases, choosing a specific model may require changes to operational, fulfillment, and financial processes.

REQUIREMENTS	Vendor Central (1P)	Seller Central (3P)	Authorized Resellers (Wholesale Partners)	Hybrid (1P + 3P Mixed)
TRANSACTION TYPE	Purchase Order (PO)	Individual buyer transactions	Purchase Order (PO)	Mixed: PO and individual transactions
PAYMENT TIMING	On terms (typically Net 30–90)	Disbursements every 2 weeks	On terms (Net 30–90)	Mixed: Depends on method per SKU
SHIPPING MODE	Bulk pallet shipments to Amazon	Fulfillment By Amazon (FBA) or Fulfilled By Merchant (FBM)	Bulk shipments to reseller	Mixed: Bulk and individual
INVENTORY OWNERSHIP	Amazon owns after purchase	Seller retains ownership (consignment via FBA)	Reseller owns after purchase	Mixed: Depends on selling method
FULFILLMENT TO BUYER	Amazon handles end-to-end	Seller (FBM) or Amazon (FBA)	Reseller or FBA	Mixed: Varies by product/method
RESOURCE REQUIREMENT	Moderate	High: Most demanding approach	Low: Leverages reseller infrastructure	High: Requires expertise across methods

Opportunities and Challenges of Each Amazon Selling Model

In order to choose the right model for your business, it’s important to understand that each model comes with tradeoffs, both in terms of revenue/profitability and operational processes. Some may seem simpler at first, with their restrictions becoming a burden later on down the road. Others might seem difficult to execute, but having the right partner in place (like Enceiba) can make it significantly easier. Let’s take a look at each model to better understand what the tradeoffs are. 

Vendor Central (1P)

For manufacturers already accustomed to traditional wholesale, 1P is the most familiar path. It operates much like a standard distributor relationship, with purchase orders, bulk shipments, and payment on net terms, which means minimal to no disruption to existing finance and logistics workflows. Amazon also provides some sales data, access to its advertising platform, and a direct commercial relationship. 1P is often the easiest path to direct selling on Amazon, and the path that many traditional B2B manufacturers follow.

The tradeoffs, however, can be significant. By selling wholesale to Amazon, you surrender control over retail pricing, leaving Amazon free to set and adjust prices as it sees fit. Margins are typically lower than other approaches, and transactional detail, such as customer data, diminishes once Amazon takes your products. Perhaps most importantly, Amazon can alter or terminate the relationship with little notice, leaving manufacturers with limited recourse.

Seller Central (3P)

Seller Central offers the greatest revenue and profit potential of any Amazon selling approach. Because you are transacting directly with consumers, you retain full price control and capture a higher share of each sale.

The data available through Seller Central is also greater than any other selling approach, providing you with insights into sell-through rates, customer engagement, B2B-specific product analytics, and inventory movement across Amazon's network. This level of insight can meaningfully inform product development and demand forecasting in ways that other models simply cannot.

The operational demands are equally significant, though. There are no purchase orders; revenue is recognized transaction by transaction basis and disbursed bi-weekly (every two weeks), which requires a fundamental shift in how your finance team tracks and accounts for inventory, sales, and profits. Inventory shipped to Amazon's fulfillment centers under FBA operates on a consignment model, something many finance teams and systems are not initially set up to handle. Effectively running Seller Central also requires dedicated expert resourcing, as it needs ongoing, hands-on management in order to be effective.

Authorized Resellers

Working with authorized resellers allows manufacturers to access the Amazon channel without taking on the operational burden of running it themselves. The reseller purchases inventory wholesale, becomes the seller of record on Amazon, and manages their own fulfillment and pricing on the channel. From a manufacturer's standpoint, this approach looks and feels like a traditional wholesale relationship, making it an easy path to pursue that requires little change to existing processes.

The approach isn’t without its limitations, however. Revenue and margins will be lower than what is possible through Seller Central, and resellers typically cherry-pick the products they want to carry rather than representing your full assortment. Visibility into Amazon performance data is largely dependent on what the reseller chooses to share, and their priorities will not always align with yours.

Coordinating inventory availability can also become complicated over time, and because the reseller is not exclusively dedicated to your brand, their commitment to your success on the platform has natural limits. Finally, in our experience, resellers often do not engage in sophisticated paid advertising programs (particularly Amazon B2B ads) and have limited ability to take advantage of Amazon Business. These factors can stunt the sales growth of B2B products for brands utilizing this approach.

Hybrid

A hybrid approach gives manufacturers the flexibility to assign each product or product line to the selling method that makes the most operational and financial sense. Fast-moving consumer products might perform best through Seller Central, while bulky or heavy items that are expensive to ship individually could be better handled through a reseller or fulfilled directly by the manufacturer.

Resellers can also play a useful role in protecting against stockouts and filling gaps in your assortment coverage. Finally, resellers can provide a way to “cover your flanks” against disruptions or challenges that may happen under other selling models. In the world of Amazon, having options is important. 

Managing a hybrid model is considerably more complex than running a single approach. Your finance team must simultaneously handle purchase orders, consignment accounting, and transaction-level revenue recognition depending on the channel. Logistics and inventory management become more layered, and the expertise required to run multiple selling methods in parallel is meaningful.

For manufacturers willing to invest in that capability, though, a hybrid model can offer the best opportunity to maximize the full revenue potential of your product portfolio on Amazon while mitigating risk of dependence on a single approach.

Wondering which selling method is the best for your business? Enceiba has the answer! We are happy to help you fully understand your Amazon opportunity. Simply contact our Amazon specialists to discuss your challenges and how to find the best approach to Amazon.