3P Brands grow twice as fast as 1P Brands on Amazon.

In a new report from SmartScout, we uncover unique differences between 1p and 3p brands.

1P Brands, who Amazon represents on their marketplace, have been a topic of debate this year. 3P, or third party brands, sell directly to consumers through Amazon FBA. 1P brands are household names like Apple, Adidas and General Mills, whereas 3P brands are often new challenger brands like Anker, Utopia and Yeti.

We have pulled the curtain on what's the difference between these two selling methods by the numbers. We analyzed all the $1m brands and shook them upside down and found what the data says. Here are some notable data points:

There are far more 3P brands, but these brands are smaller.
1P Brands have lots of resellers.
1P Brands are not growing as fast as 3P.
1P Brands have older ASINs. 3P Brands are bringing new products to market faster.

Per Amazon dollar of revenue, 3P brands spend far more on sponsored products and video. 1P brands close the gap on Sponsored Brands Ads. Something their Vendor Managers likely push a great deal as a place to park a bunch of advertising dollars.

While some people are leaving 1P for the greener pastures of 3P where they have more control over their offerings, 1P is still luring high affinity brands and offering new perks like gating. Will 1P brands catch up and start investing more in advertising? Will 3P brands continue to outpace? Does it not really matter in the end as Amazon wins in either scenario?

I heard a great quote on the debate recently: "Amazon never loses money on a product sold in 3P".

https://smartscout.com/reports/amazon-1p-vs-3p