An Amazon Vendor is a manufacturer, distributor, retailer, individual, or business that sells products directly to Amazon under a first-party (1P) relationship. Once a vendor supplies the products, Amazon takes over the responsibility of selling, pricing, and distributing the products directly to customers. For example, vendors receive a purchase order from Amazon, fulfill the purchase order, and sell their products directly to Amazon. In rare cases, direct fulfillment is an option even as a vendor, however, it requires robust warehousing and fulfillment capabilities. Although Amazon is now the owner and seller of the products, vendors are still responsible for setting up the items and providing some of the product content.

Selling as a first-party vendor on Amazon tends to be easier than third-party selling. This is because it works like a wholesaling model. By fulfilling Amazon’s purchase order, vendors can take advantage of a much more hands-off approach, while still taking advantage of the volume of consumers shopping on Amazon. Products sold directly by Amazon tend to carry more trust from customers. This allows vendors to take advantage of Amazon’s reputation for fast shipping and easy returns, showcasing its reliability. When potential customers see ‘Sold By Amazon’ vendors get the added value of perceived trust from consumers leading to higher conversion rates. Amazon Vendors have access to promotional tools like A+ Content, which allows for enhanced product descriptions with rich multimedia (such as images and videos) to make product listings more attractive. And since Amazon handles customer service and returns, vendors don’t need to manage recurring customer inquiries, reducing the workload on their teams.

When vendors sell their products directly to Amazon, they relinquish control over their products. One key aspect of this is pricing. Amazon determines the price of the product based on market conditions, with vendors acting as wholesale suppliers for Amazon, often resulting in lower profit margins. Typically, vendors negotiate their margins directly with Amazon on an annual basis, which can lead to less predictability compared to 3P Sellers who pay a flat percentage fee.