We recently presented a 1P versus 3P analysis for two of our client partners tha
By jasonlandro · September 8, 2026 · Curated by George's Blog
We recently presented a 1P versus 3P analysis for two of our client partners that do over $20,000,000 a year on vendor central
Moving from 1P to 3P isn't a cakewalk. For an enterprise brand, it’s a structural migration that requires an analysis of your entire supply chain.
There are a lot of service providers that push migrating to 3P, but it’s not right for every brand
In fact, it’s often not right for brands that only sell in a wholesale model, are top in their category, and more
Our client partners both had asked us to do a high-level analysis to understand the difference in cost structures
What we found wasn’t necessarily surprising due to the nature of their respective catalogs
However, there was one major takeaway for me that I think is relevant to every 1P brand considering the switch to Seller Central
If you want to move to 3P to avoid CRAP or lack of price increases, you are either going to be underwater on 3P or have to raise the ASP and lose sell through or buy box
A lot of brands want to move to 3P to not have to deal with CRAP or lack of price increases, but the reality is that the items are CRAPing out or not getting increasing because the unit economics don’t work, typically because of the last mile shipping costs to the consumer
You see this the most with low ASPs and big and bulky items
3P doesn’t magically fix this because the minimum costs are still the same
The financial arrangement of who bears what costs are just different, but it generally shakes out to be worse for the brands because Amazon will sell products at a loss, which most brands can’t sustain on 3P
Even if you can raise the ASPs, you’re likely to see decreased sell through because your price isn’t as competitive
So if someone is pushing you to move to 3P, make sure you account for the lost opportunity cost of having to raise prices in your analysis as well as a host of other factors
If you need help with this, don’t hesitate to reach out to me or Nectar