The new VBER guidelines announced in November 2022 have rocked the world of many brands selling on Amazon UK. Starting in April 2023, Amazon now requires all manufacturers to sell on the platform through either a 3P managed strategy or a 1P Amazon relationship.
Many brands, now, are needing to make a change and struggling to make an informed decision. If you’re trying to choose between 1P or 3P, we often recommend going with a 3P partner that has a proven success record on Amazon. As a top Amazon seller, Pattern knows what works on the platform and how to help brands reach true profitability. With a partner-obsessed approach to ecommerce, Pattern can help you succeed on global marketplaces, including Amazon UK.
Read below for 4 reasons a 3P partnership will improve your Amazon strategy in light of new VBER regulation.
1. The Future of Amazon is 3P
The number of 3P sellers on Amazon has steadily increased over the years. Now, about 60% of units sold on Amazon are sold by 3P sellers, a more than 40% increase from 2007. Why the shift?
Brands are learning 3P is the only way to be truly profitable on Amazon. Because Amazon is a customer-centric platform, they’ll always yield to what they think is best for the customer, lowering prices, changing listings, and discontinuing products when they see fit. Brands are learning that an exclusive 3P relationship is the only way to achieve long-term success, and Amazon agrees—we’ve seen they’re much more welcome to 1P to 3P transitions now than they have been in the past.
2. Brands Achieve Better Brand Control Through 3P
Brand control is much easier to achieve in an exclusive 3P Amazon partnership. When you have a single, authorised seller for your brand with full control of your listings and performance, you’ll be able to stay branded and consistent at all times.
Research is showing more and more that customers start their purchase journey on Amazon. Even if they buy your products through another channel, you’ll want to make sure their first impression of you is accurate and optimised for better brand affinity wherever customers will encounter you in the future.
3. Brands Have Greater Insight Through 3P
Amazon 1P relationships are notorious for keeping data from you. We’ve heard many sad stories of brands caught unaware due to a lack of data. For instance, some may not see sales numbers decreasing for certain products, only to learn later that Amazon has been phasing out those products to discontinue them on the platform.
A lack of data and insight also makes it difficult to influence your strategy or performance there. 1P brands don’t know what is working with their ad conquest efforts, for example, or which keywords are working and not. Those insights are helpful to apply to DTC efforts and other marketplaces, but 1P brands are, unfortunately, often left in the dark concerning those metrics.
4. The Right Exclusive 3P Partner is Invested in Your Success
Another benefit brands experience through an exclusive 3P partnership is true investment in their ecommerce profitability. Because Amazon is so customer-focused, they’re not able to truly offer positive, long-term results for their 1P brands. The tension between what customers want and the boundaries brands need to have to protect themselves has proven too difficult for Amazon to successfully balance. Most brands can only achieve ecommerce profitability on Amazon through an exclusive 3P relationship.
Accelerate Your 3P Partnership with Pattern
Looking to make a change in your Amazon UK strategy in the face of new VBER regulations? Pattern has always been passionate about a truly brand-centered approach to selling on Amazon and other ecommerce channels. We have all of the resources brands need to succeed in ecommerce, including content optimization teams, ad teams, fulfillment experts, and more. Our goal is always true, long-term profitability, and we can help you achieve that.