Episode 330 - Amazon 1P vs 3P: Which Model Wins in 2026

Scott is with Matt Snyder, founder of Brands Excel, to discuss one of the most misunderstood transitions on Amazon: moving between Vendor Central (1P) and Seller Central (3P). After years of third-party sellers gaining share, Amazon’s first-party retail business appears to be growing again. Matt explains how tariffs, inventory challenges, margin pressure, and operational complexity have made life harder for many mid-sized sellers, while larger brands continue capturing more market share. The result is a marketplace where the biggest players keep getting bigger. He details the transition from 1P to 3P, including the internal roadblocks that can prevent brands from gaining control of listings, content, and catalogs. Matt also shares how Amazon’s New Seller Success team can sometimes help brands navigate these challenges. Scott and Matt also look at the reverse trend. These are brands moving from 3P back to 1P. In categories like grocery and consumables, Amazon may subsidize pricing and logistics in ways that make the vendor model attractive. There is no perfect model. As ecommerce evolves through AI, social commerce, and changing marketplace economics, brands that know when to shift strategies and navigate the messy middle will be best positioned for growth.

Episode Notes:

00:09 - Amazon retail (1P) begins gaining share again relative to 3P sellers 01:54 - Why larger brands are capturing more market share 03:12 - Pattern and the rise of large marketplace operators 04:58 - Common reasons brands consider moving from 1P to 3P 06:53 - Vendor agreements and the challenges of opening a Seller Central account 08:16 - Using Amazon leadership principles to gain internal support 10:32 - How Amazon's New Seller Success team can help transitions 12:02 - Why 1P to 3P transitions remain difficult for large brands 13:40 - Content ownership, listing control, and vendor contribution issues 14:54 - The emerging trend of 3P brands moving to 1P 16:12 - Categories where the vendor model can still outperform 3P 17:20 - Amazon Fresh, grocery expansion, and basket-building products 18:48 - Pricing subsidies and how Amazon protects customer loyalty 20:16 - The trade-offs between different Amazon business models 22:14 - Looking ahead: AI, social commerce, and future marketplace shifts 24:12 - AI agents and the next wave of ecommerce complexity 24:55 - Building a collaborative Amazon seller community

Related Post:

How to Use Amazon Ad Data to Find New Product Opportunities

How to Reach Matt:

LinkedIn: linkedin.com/in/matthew-snyder-amazon

Website: https://www.brandsexcel.com/

Scott’s Links:

LinkedIn: linkedin.com/in/scott-needham-a8b39813 X: @itsScottNeedham Instagram: @smartestseller YouTube: www.youtube.com/@smartestamazonseller2371 Newsletter: https://www.smartscout.com/newsletter-sign-up Blog: https://www.smartscout.com/blog