3P vs. 1P: What Are the Differences? Selling on Walmart and Amazon

When it comes to selling your products online, there is a lot of confusion between the terms 3P and 1P. What do these acronyms mean? Well, you’re in luck because we are here to help explain all the differences from 1P vs. 3P on Walmart and Amazon and show which model will best suit your needs as an online seller! Whether you’re just starting out or looking for ways to expand your business, this post will be packed with lots of helpful information so that you can easily decide what type of selling format is best for you.

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What are the Differences Between 3P and 1P Selling on Walmart and Amazon?

When it comes to selling on Walmart and Amazon, there are two different approaches: 3P (third-party) and 1P (first-party).

3P Selling refers to selling products through an outside source, such as a marketplace like eBay or an individual merchant. These merchants can list their products on Walmart and Amazon’s websites, allowing them to reach a larger audience. However, this approach often requires more effort in terms of marketing as well as additional fees for storage, shipping, and fulfillment. Additionally, 3P sellers may not always benefit from the same advantages that 1P sellers receive, such as access to customer service tools or promotional opportunities.

On the other hand, 1P Selling refers to selling products directly from the Walmart or Amazon website. This approach offers merchants access to various features and tools, such as customer service support, product placement, and promotional opportunities that 3P sellers may not have access to. Additionally, 1P sellers benefit from faster shipping times and lower storage costs since they can store their inventory in-house.

Ultimately, 3P and 1P selling can effectively reach a larger audience on Walmart and Amazon. However, it is essential to consider the pros and cons of each approach before making a decision, as they each have unique advantages and drawbacks that should be considered.

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How You Can do Business on Walmart and Amazon Keeping in Mind the 1P and 3P Technique?

Some of the big and small marketplaces provide both the 1P and 3P benefit since it is a significant part of marketing. However, when it comes to the Amazon and Walmart marketplace, an effective strategy is necessary. The method includes marketing whereabouts and also how you can be a part of potential marketing plans. 

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Becoming a part of the plan will make sure that your name stays on the list. There are a few cautionary steps that you must keep in mind. You might think that doing business on Amazon and Walmart is not an easy task. Many sellers lost half of their business depending on the displaying the items in the store. 

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Related: How To Sell Wholesale On Amazon?

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For example, if you directly supply items to Walmart and sell through the Amazon marketplace, you can lose your business. Suppose you sell 10% through Walmart and the rest through Amazon. You will be able to sell items at a low price compared to other sellers on Amazon. 

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However, if Amazon finds out that you are not maintaining the company's marketing policies, you will get de-listed. Therefore, it is vital to follow legal eCommerce steps if you want to stay in business. 

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Related: eBay Vs. Amazon - A Complete Comparison Guide

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Pros and Cons of 3P vs. 1P

There are pros and cons to selling through 3P and 1P on Walmart and Amazon. Let’s take a look at the advantages and disadvantages of each:

3P Pros

- You can get your products listed quickly—it usually takes one or two days to get approved as a Marketplace seller.

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- You don’t have to manage inventory, warehouse, pack, or ship items.

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- You can leverage Walmart and Amazon’s large customer base for increased sales opportunities.

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- It costs less to list products via 3P than through 1P.

3P Cons

- Your margins may be lower—Marketplace sellers must pay a commission to Walmart or Amazon on each sale.

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- You don’t have as much control over your listings—the retailer has the final say on pricing, product descriptions, and other details.

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- It can be challenging to compete against large Marketplace sellers who have established themselves on these platforms.

1P Pros

- You have more control of your listing—you are responsible for setting prices, product descriptions, and other details on the site.

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- You may make higher margins since you don’t need to pay a commission to Walmart or Amazon on each sale.

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- You can build brand loyalty with customers since they will purchase directly from you.

1P Cons

- It can take weeks to get approved as a 1P seller, which delays getting your products listed.

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- You will need to manage inventory, warehouse, pack, and ship items.

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- You may have limited access to Walmart and Amazon’s large customer base if you don’t already have an established presence on the platforms.

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How to Decide Which is Best: 3P vs. 1P

When deciding whether 3P or 1P is the best option for selling on Walmart and Amazon, there are some key factors to consider.

At Walmart, the main difference between 3P and 1P is that 3P sellers typically have lower prices than those set by Walmart directly. This can attract customers looking for lower prices and lead to more competition between sellers. On the other hand, 1P gives brands greater control over their inventory levels and pricing, allowing them to manage stock levels better and maintain a consistent price point across all retailers they sell through.

Amazon also has different advantages for both types of sellers. For 3Ps, Amazon’s marketplace gives access to millions of potential customers and to Amazon’s customer service teams. On the other hand, 1Ps have more control over their product listings and can take advantage of additional features such as A+ content for enhanced visibility on the site.

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Related: How To Sell On Walmart And Tips To Boost Sales

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Tips for Success When Selling with 3P vs. 1P

When selling on Walmart and Amazon, sellers should be aware of the differences between 3P (Third Party) and 1P (First Party) selling. Here are some tips to help ensure success when selling through either platform:

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3P Selling

- Make sure your listing is complete, accurate, and up-to-date to attract potential customers.

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- Work with a reputable 3rd party seller who understands all the rules and regulations for ensuring your products are listed on both platforms.

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- Take advantage of any special promotions or discounts available for third-party sellers.

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- Ensure customer service inquiries are handled quickly and efficiently so buyers can have a positive shopping experience.

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- Utilize the latest technology to automate processes that would otherwise take time and resources.

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1P Selling:

- Sign up with Amazon Brand Registry or Walmart Marketplace to secure your brand identity.

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- Make sure your product images, description, and title are accurate and optimized for improved visibility across both platforms.

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- Take advantage of sponsored ads on either platform to increase your reach and attract more buyers.

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- Invest in tools such as an inventory management system to track sales performance and plan for future promotions or discounts.

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- Monitor competitors’ offers closely to stay competitive on price

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Related: Three Different Options for eBay fulfillment Services

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Conclusion

In conclusion, there are definitely Pros and Cons to having your products available on either 1P or 3P platforms like Amazon and Walmart. When looking for the best eCommerce fulfillment solution for your business, it’s important to consider all of these factors before making a decision. If you need help fulfilling orders for your online store, whether it’s 1P or 3P, get in touch with us today. At Simpl, we offer comprehensive order fulfillment services that will take care of everything from start to finish so that you can focus on other aspects of running your business. Visit our website or contact us today to learn more about how we can help you grow your eCommerce business!

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Next article: 5 Best Products to Sell Online in 2020