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Online Business
July 27, 2021

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

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. 

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. 

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. 

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. 

BASIC DETAILS ON 1P AND 3P

1P is the first-party relationship. Here the marketplace works as the retailer, and the brand works as the wholesale supplier. Similarly, 3P is the third-party relationship. Here, the brand is the retailer, and it directly sells items to buyers through the marketplace.

ADVANTAGES AND DRAWBACKS OF 1P

If you are selling 1P on Amazon or Walmart, you directly sell the products to the marketplace. Later on, the company sells the items to the buyers. Marketplaces primarily promote their owned listings from where the items are purchased in bulk.

Besides, the 1P sellers always have the benefit of accessing various marketing tools. Being a supplier, you have to worry about the supply. In comparison, the marketplace is responsible for handling multiple customer aspects.

When it comes to the drawbacks, the most significant factor is low margins and lack of control. Selling products at the wholesale rate affects your margins. Moreover, you are letting the marketplace control the prices.

ADVANTAGES AND DRAWBACKS OF 3P

If you sell directly from the marketplace, you get the advantage of setting the prices you want. As a result, you get the opportunity of protecting your margins. Moreover, you do not have a fear of getting de-listed from the marketplace. Moreover, 3P means you get the benefit of controlling your inventory. Therefore, you can quickly fulfill your orders on various marketplaces, especially from your stock. 

Coming to the drawbacks, directly selling products through Walmart or Amazon means you have to make your listing. Besides, you have to make sure that the list is optimized.

HOW YOU CAN SELL PRODUCTS ON AMAZON OR WALMART

If you choose 1P for Walmart and 3P for Amazon, then your risk of de-listing increases. The reason behind this is Amazon and Walmart frequently monitor different marketplaces. Once they find that you are selling products at a lower rate, they will penalize your listing. Therefore, it is a good idea to either opt for 1P across marketplaces or 3P.

Related article: How you can do Business on Walmart and Amazon Keeping in Mind the 1P and 3P Technique

Hence, following these rules, you can easily do business on both Walmart and Amazon. Besides, you can even reap the benefits of either of the marketplaces.

Next article: 5 Best Products to Sell Online in 2020