A third-party (3P) marketplace refers to utilizing a retailer as a channel to sell the brand’s products directly to consumers. The brand is responsible for product listings, marketing, and advertising, as well as fulfilling all orders. Amazon Marketplace is a prime example of a third-party marketplace. Independent sellers list their products on Amazon’s website and manage their own pricing and product details. Customers can purchase products from these sellers directly, and Amazon takes a commission on each sale. Sellers can either use Fulfillment by Amazon (FBA), where Amazon handles shipping and customer service, or manage shipping themselves through Fulfillment by Merchant (FBM).

Sellers can reach a large, pre-established customer base without needing to build their own eCommerce site, increasing their chances of making sales. This also means they don’t need to handle website management, payment processing, or customer service infrastructure, as the marketplace provides these services. And selling on established third-party marketplaces like Amazon or eBay allows sellers to leverage the trust and credibility associated with these platforms, helping attract customers.

Sellers have limited opportunities to build their own brand since they are selling under the marketplace’s branding, and customers may focus more on the marketplace than the individual seller. This is something businesses should consider when choosing how to sell their products.