Best Practices for Brands with a Third Party Amazon Selling Strategy
More brands are beginning to transition to a direct-to-consumer selling strategy on Amazon in order to improve their margins and gain control of the marketplace. This doesn’t mean it's the best option for all brands and their omnichannel strategy. For some, maintaining strong relationships with a handful of trustworthy wholesale partners is part of that strategy. These types of 3P selling strategies can be really beneficial to all parties involved if it is done correctly. Here is our recommendation on best practices for brands with a 3P selling strategy in order to have long-term success on Amazon...
It seems simple, but relationships, trust, and communication matter in these sorts of situations. Make sure you understand your 3P partners' goals and business model and work to develop strong trustworthy relationships over time.
Adding more wholesale partners doesn’t mean more sales. It usually just means that the wholesalers now split the demand across a larger pool of partners. Instead, think about how you can provide 1-5 wholesalers that you trust with a beneficial agreement.
It is important to consider the finer details that are specific to Amazon in your wholesale agreements with your 3P partners. Make sure it's clear what the expectations are for pricing, inventory, and distribution. If this isn’t set up front, you may run into a messy, off-price marketplace in the future.
Make sure your partners know ahead of time when discount periods are allowed. This gives them the opportunity to adjust purchases ahead of time and avoid disputes when MAP breaks come as a surprise and your partners are now missing a month of sales due to other off-price sellers, all while sitting on inventory.
Decide on a partner who can be your brand registrant, manage your Amazon content, and help with advertising efforts as needed. Most 3P partners will work to sell their own inventory, without having to put in extra content work or sacrifice margin for advertising. Having on partner manage content and advertising on behalf of the entire brand will improve the success of all 3P partners and give your brand better representation.