Loading...

How To Become A 3rd Party Seller On Amazon? Guide For Sellers

how to become a 3rd party seller on amazon

Table of Contents

What is a 3rd Party Seller on Amazon?

Amazon 3P (third-party) sellers are independent sellers. They use Amazon’s platform to sell their products to Amazon customers. These sellers are not directly affiliated with Amazon and operate their own businesses. Instead, they use Amazon as a sales channel to reach a wider audience.

Third-party sellers on Amazon can range from small businesses to individual entrepreneurs. They have the ability to set their prices and control their marketing. As a seller, you’ll also need to manage your inventory, handle shipping and returns, and provide top-notch customer service. Amazon offers tools and resources to help you manage your business, such as a dashboard to track your sales and performance metrics. Staying on top of your business and regularly optimizing your listings to keep competitive in the marketplace is essential. You can build a successful Amazon business as a 3rd party seller with dedication and hard work.

Amazon 3P sellers can choose to fulfil orders themselves (merchant fulfilled). They can also use Amazon’s FBA to store and ship their products to customers. This blog will discuss how to become a 3rd party seller on Amazon. What are the steps in this process?

How do you become a 3rd Party Seller on Amazon?

To start:

  1. Create a seller account by providing some basic information.
  2. Choose a selling plan that suits your needs.
  3. List your products with accurate descriptions and prices. You’ll need to manage your inventory, handle shipping, and many more.

Amazon offers helpful tools and resources to make selling easier. It includes a dashboard to track your sales and manage your business with dedication and hard work. You can become a thriving 3rd party seller on Amazon and reach a vast customer base.

Third-party sellers have become an essential part of the Amazon marketplace. They account for a significant amount of sales on the platform. Amazon has also created tools and services to help 3P sellers succeed.

Amazon 1P vs. 3P

These are two different selling models on the Amazon marketplace.

1P refers to Amazon’s retail division. In this model, Amazon purchases products from manufacturers. Then, Amazon sells them directly to customers on its platform. This model is also known as Amazon Retail or Vendor Central. Amazon manages pricing, inventory, and fulfilment for the products it sells. Amazon pays the manufacturer a wholesale price for the products. The revenue generated from these sales is reported as Amazon’s own revenue. 

The 3P model refers to third-party sellers who use the Amazon marketplace. These sellers are independent businesses. This model is also known as Amazon Marketplace or Seller Central. 

Amazon 1p vs 3p revenue

Amazon charges fees for using the platform. The revenue generated from these sales is reported as the third-party seller’s revenue.

1p vs 2p vs 3p

There is no 2P model in the Amazon selling model. Instead, it’s either 1P (first-party) or 3P (third-party).

What is the difference between 1p, 2p, 3p marketplace?

There is no 2P marketplace model on Amazon. Instead, it’s either 1P (first-party) or 3P (third-party) marketplace.

How does a Third-Party Seller Sell on Amazon?

Amazon makes money from third-party sellers through various fees and commissions. 

To sell on Amazon as a third-party seller, follow these steps:

Create an Amazon Seller Account 

First, create a seller account on Amazon.

Choose a Selling Plan

Amazon offers two types of selling plans – individual and professional. 

List Your Products

Once your account is set up, list your products on Amazon’s marketplace. You can either list them individually or in bulk using Amazon’s listing tools.

Set Your Pricing

 You are responsible for setting your product prices. Amazon offers guidance on pricing based on similar products sold on the platform.

Fulfill Orders

You can either fulfil orders yourself or use Amazon’s FBA service.

Manage Your Account

 Often, check your sales, customer feedback, and inventory levels. Then, use Amazon’s seller tools to optimize your listings. These tools also help to manage your pricing and track your performance.

Scale Your Business: 

As your sales grow, consider expanding your product offerings. You can use Amazon services.

How much does Amazon make from Third-Party Sellers?

Amazon makes a significant portion of its revenue from third-party sellers. In 2020, third-party seller services accounted for 18.4% of Amazon’s net sales. It generates $80.5 billion in revenue.

How do you become a successful third-party Seller on Amazon?

Becoming a successful third-party seller on Amazon can take time and effort. But here are some tips on how to become a 3rd party seller on Amazon.

Optimize Your Product Listings 

Ensure your product listings are complete, accurate, and optimized for Amazon’s search algorithm. Use relevant keywords in your descriptions and bullet points. Always provide high-quality images and competitive pricing.

Provide Excellent Customer Service

Respond promptly to customer inquiries and complaints. Always strive to provide a positive buying experience for your customers. This can help you achieve the best reputation and increase customer loyalty.

Monitor your Metrics 

Keep track of your seller metrics, such as your order defect rate, late shipment rate, and feedback rating. Use Amazon’s seller tools to monitor your performance and identify areas for improvement.

Fulfill Orders Quickly and Efficiently

Ensure that you have adequate inventory on hand and ship orders promptly. It will help to avoid negative feedback and potential account suspension.

Use Amazon’s Advertising Tools 

Consider using Amazon’s advertising tools, such as Sponsored Products and Sponsored Brands. These will help to increase visibility. Thus, it will drive more traffic to your product listings.

Leverage Amazon’s Fulfillment Services

Consider using Amazon’s fulfilment services, such as Fulfillment by Amazon (FBA). It will help streamline your operations. Besides, it provides faster shipping and better customer service.

Stay up-to-date on Amazon Policies and Guidelines. 

Keep up with changes to Amazon’s policies and procedures. It will help to avoid account suspension or other penalties.

What are Amazon Third-Party sellers’ Percentages?

The Amazon third-party seller percentage varies depending on the product category being sold. Amazon charges a referral fee. It is a percentage of the item’s sale price for each item sold by third-party sellers on its platform.

The referral fee percentage ranges from 6% to 45%. It depends on the category, with most categories falling between 8% and 15%. For example, the referral fee for most categories of clothing and accessories is 17%. In contrast, the referral fee for most electronics categories is 8%.

Besides the referral fee, Amazon may also charge other fees. For example, it includes a monthly subscription fee for the Professional selling plans—or fulfilment fees for using Amazon’s Fulfillment by Amazon (FBA) service.

It’s important to factor in these fees when setting your prices as a third-party seller on Amazon. It will ensure that you’re able to make a profit besides remaining competitive with other sellers in your category.

How to Become an Amazon FBA Seller?

How to become a 3rd party seller on Amazon? You can choose any path of your choice. For example, you can select the 3P or 1P model. To become an Amazon FBA (Fulfillment by Amazon) seller, follow these steps:

Create an Amazon seller account

 To get started, create a seller account on Amazon. You can choose between a Professional account (with a monthly subscription fee). Or an Individual account (with no monthly cost but higher per-item selling fees).

Find a Product to Sell

 Choose a product or products to sell on Amazon. Conduct market research to identify products that have high demand and low competition.

Source Your Products 

Once you’ve identified a product to sell, find a supplier or manufacturer to produce or source your products. You can also use tools like Alibaba or AliExpress to source products from overseas suppliers.

Create Your Product Listings

 Create your product listings on Amazon. Make sure to use high-quality images and detailed descriptions. Use relevant keywords to optimize your listings for search.

Enroll in Amazon FBA

 Once you have product listings created, enroll in Amazon FBA. This allows Amazon to store and ship your products to customers on your behalf. Amazon will handle customer service and returns.

Ship your products to Amazon. 

Once you’re enrolled in FBA, ship your products to an Amazon fulfilment centre. Amazon will take care of the rest. It includes storing and shipping your products, handling returns, and providing customer service.

Manage Your Inventory

Monitor your inventory levels regularly. It will help to ensure that you have enough stock to fulfil orders. You can also use Amazon’s inventory management tools. These tools will help you track and replenish your inventory.

Is Amazon Getting Rid of 3rd Party Sellers?

No, Amazon is not getting rid of third-party sellers. In fact, third-party sellers are an essential part of Amazon’s business. They account for more than half of the products sold on the platform. Amazon continues to invest in improving its marketplace to attract and retain third-party sellers. Amazon has introduced various tools and services. These tools help them grow their businesses on the platform.

What is 3P in Amazon?

3P stands for third-party. It refers to businesses or individuals who sell products on Amazon’s platform, as opposed to Amazon itself or its first-party sellers (1P). Third-party sellers on Amazon are independent entities. They are responsible for their products and customer service.

What are 1P 2P, and 3P?

1P refers to Amazon’s first-party retail business, where it sells products directly to customers. 2P refers to businesses that sell wholesale to Amazon, which then sells the products to customers as 1P. Finally, 3P refers to third-party companies to third-party companies or individuals that sell products on Amazon’s platform.

Is 1P or 3P more Profitable for Amazon?

Determiningchallenging which is more profitable for Amazon, 1P or 3P, is challenging as they operate differently and have different cost structures.

In the 1P model, Amazon buys products from manufacturers at a wholesale price and sells them directly to customers at a retail price, earning the difference as profit.

In the 3P model, Amazon earns revenue by charging third-party sellers various fees, such as referral and fulfilment fees, and taking a commission on each sale.

Both models have advantages and disadvantages, depending on Amazon’s specific circumstances and goals.

What does Amazon 1P mean?

To get started with how to become a 3rd party seller on Amazon. You must know the meaning of 1P on Amazon. Amazon 1P, or “first-party,” refers to products sold by Amazon itself as the retailer, not through third-party sellers. In this model, Amazon buys products from manufacturers or distributors at a wholesale price and sells them directly to customers at a retail price.

This is different from Amazon 3P, or “third-party,” where third-party sellers list and sell their products on Amazon’s marketplace, and Amazon earns revenue by charging them various fees and commissions.

How to Sell Third-Party Products on Amazon?

To sell third-party products on Amazon, you need to create a seller account, list the products you want to sell, and handle customer service and fulfilment. Then, you can either buy and resell products wholesale or use dropshipping to have suppliers send products directly to customers.

To help manage your business, Amazon provides various tools and resources, such as a dashboard to track your sales and performance metrics, inventory management tools, and advertising options to promote your products. Amazon also has strict policies and guidelines that sellers must adhere to, such as ensuring product quality, avoiding counterfeit products, and maintaining proper inventory levels.

Conclusion

We hope this blog post provides details about how to become a 3rd party seller on Amazon. Becoming a 3rd party seller on Amazon can be a great way to grow your online business. To get started, you need to create a seller account and choose a selling plan that fits your needs. Listing your products with accurate descriptions, images, and prices is critical to attracting customers and generating sales. Remember to keep your customers happy and offer quality products. , Always stay up-to-date with the latest Amazon policies and trends. Urtasker can help you take your Amazon business to new heights with its expert services. Trust us to provide tailored solutions to your needs. 

Picture of Zeeshan Riaz <br> <span class="designation">Chief Operating Officer</span>
Zeeshan Riaz
Chief Operating Officer

With education and experience in IT. Law and E-commerce industry, I have successfully helped more than 250 E-commerce businesses worldwide to reduce their operational cost with cutting edge eCommerce Marketing Services. I do manage a team of more than 250 people team which includes Amazon, eBay, Shopify, website development, SEO and SMM experts.

Copyright © 2024 Urtasker Inc. All Rights Reserved.