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By Martin Heubel ยท August 18, 2025 ยท Curated by George's Blog
Should you switch from an indirect distribution setup to a direct trading relationship with hashtag#Amazon?It's tempting to think that cutting out the middleman would boost your sales and profits with the online retailer.Yet most brands that choose this route underestimate the resources it takes to manage Amazon effectively:- Managing day-to-day operations- Negotiating annual terms- Dealing with constant margin requests- Coordinating service providers (agencies, SaaS, etc.)- Reconciling unresolved financial disputes - ...The truth is:Most SMBs are better off using a distributor instead of becoming a vendor for Amazon themselves. The resource requirements on brands often outweigh the benefits of moving to a direct relationship with Amazon.๐๐๐ ๐๐ต๐ฎ๐ ๐ถ๐ณ ๐๐ผ๐'๐ฟ๐ฒ ๐ฎ ๐น๐ฎ๐ฟ๐ด๐ฒ ๐บ๐๐น๐๐ถ๐ป๐ฎ๐๐ถ๐ผ๐ป๐ฎ๐น?Although you may think you have the internal resources to make the switch, I recommend taking one step at a time.Distributors are long-term trading partners. Cutting them off will likely do more harm than good. And although your Vendor Manager wants to list your entire portfolio, I strongly recommend against this approach. โInstead, only transition 20-30% of your listed Amazon assortment. This allows you to understand the real impact of Amazon's price algorithm, identify and fix any process errors leading to chargebacks, and expand profitably over time.Yes, you'll see slower sales growth at first.But you'll not only give your long-time distribution partners a chance to ramp down their business sustainably โ you'll also transition to a direct trade relationship in a much more profitable manner.---Have you switched from using a distributor to becoming a 1P vendor yourself? What was your experience?Let me know in the comments!hashtag#amazonvendor hashtag#amazonstrategy