Amazon 1P to 3P: What the Transition Changes and Which Lines Belong on the P&L

A 1P to 3P transition is the move from selling to Amazon to selling on Amazon. On 1P, Vendor Central is wholesale: Amazon buys the product, sets the retail price, and is the seller of record. On 3P, Seller Central is retail: the brand, or its partner, holds the inventory, sets the offer price, and is the seller the customer can see. Both models still exist in 2026. The move is an operating change, not a settings change.

The profit-and-loss difference is which lines you own. A 1P P&L is a wholesale margin. A 3P P&L is retail contribution after fees, returns, ads, and stock. This essay does not quote margins, Net PPM, or chargeback rates. Those numbers belong to a specific vendor agreement, and a generic one would be fiction. The line-by-line comparison is Vendor Central vs Seller Central. If the purchase orders have already stopped, start with what to do when they stop.

What is the difference between 1P and 3P?

On 1P, Amazon carries the inventory it has ordered and presents itself as the seller. The brand’s leverage is the product, the supply, and whatever terms the vendor agreement still contains. Purchase orders can slow or stop. When they do, the detail page can go out of stock even though the factory has goods. The brand does not get to choose the retail price on the page Amazon controls.

On 3P, the brand chooses the offer price, subject to the featured-offer rules described in the brand-protection essay. The brand also chooses how much inventory to place in Fulfillment by Amazon, how much to hold at a 3PL, and whether a direct store or another marketplace should carry the same item. The cost of that control is the work: listing quality, advertising, account health, returns, and a replenishment rhythm. Amazon’s public description of the two selling plans, and of FBA as an optional fulfillment service, is on sell.amazon.com/pricing.

The useful question is not “which model has a better margin in a spreadsheet from 2022.” It is who should set the US price, who should hold the inventory, and whose name the customer should associate with the purchase. That choice is US market-entry work when the brand does not yet have a US P&L.

What changes on the 1P to 3P P&L?

On 1P, your revenue is the purchase order. The lines you control are cost, terms, shortages, and chargebacks. Amazon’s retail price and Amazon’s margin on that buy are not your lines. A Net PPM target in a vendor negotiation is Amazon’s profitability. It is not your gross margin.

On 3P, your revenue is the shopper’s payment. Then subtract the category referral fee, fulfillment or your own postage, returns, advertising, duty, freight, and the cost of the goods. What is left is contribution. A 1P brand does not have that number. Comparing “Amazon margin” across the two models without rewriting the lines is how teams invent a spread.

Amazon’s public fee update for 2026 says US referral and FBA fees were unchanged in 2025, that 2026 FBA fees rise by an average of about $0.08 per unit, that no new FBA fee types were introduced, and that sellers have at least 90 days’ notice before increases take effect. That is Amazon’s average, not your unit economics. Read the 2026 fee letter and run the Revenue Calculator on the ASINs you actually sell. The pricing essay is the brand-side view of the same numbers.

Do not publish, internally or externally, a “typical” margin for a 1P-to-3P move. We do not have one that would be honest across categories.

What has to be decided before the vendor account closes?

A transition fails when the team treats it as a logistics project and discovers, mid-move, that the brand has no point of view. Before purchase orders wind down, write down four decisions.

Who the offer is. If the vendor account is in a distributor’s name, the brand may not control the detail page. Brand Registry, which requires a pending or registered trademark, is how the owner gets the catalog and content tools. The requirements are in the Brand Registry essay and on Amazon’s Brand Registry page.

Which ASINs stay. A US catalog is not the home catalog with the currency converted. Keep the products that can hold a price after duties, referral fees, fulfillment, returns, and advertising. Park the rest.

What the price architecture is. Map a minimum advertised price or a floor only if you can actually enforce it. A floor you abandon in week six teaches every reseller the real price.

Who answers the customer. On 3P, order defects, late shipments, and unanswered messages are the brand’s problem. Staff that before the first seller-fulfilled order, or use FBA knowing what it does and does not cover. The comparison is in the fulfillment essay.

Where does the inventory overlap break?

The dangerous window is the overlap. Vendor inventory is still in Amazon’s buildings while the seller account is trying to become the featured offer. If the vendor stock runs out before seller stock is received, the ASIN goes dark and the sales history that made the page valuable starts to decay. If both are in stock and priced apart, the customer sees two versions of the brand.

1. List the ASINs that matter and the weeks of cover on each, in the vendor channel and in the warehouse you control.
2. Place seller inventory so it is receivable before you expect vendor purchase orders to stop. Inbound time is not the same as the transit time on a freight quote. Appointment, check-in, and receiving sit on top of the sailing.
3. Keep one price logic. If Amazon still has vendor units, do not undercut that offer just to “win” a page you will have to live with later.
4. Watch stranded and suppressed listings daily during the overlap. A suppressed page does not accumulate the history you think you are protecting.

Amazon Warehousing and Distribution and FBA inbound placement are tools, not a strategy. Use them when they shorten the gap. Do not adopt them because a webinar said every former vendor should.

What happens to advertising after the switch?

On 1P, a vendor manager often ran the ads, or the brand ran Amazon Ads against a retail price it did not set. On 3P, the brand pays for the click and also pays the referral and fulfillment fees on the order. An advertising target copied from the vendor account will overspend if the contribution margin is now different.

Start with the searches that already name the brand, and with the exact product terms a buyer uses when they are ready to purchase. Add broad discovery only after the page can convert: images, title, price, and in-stock.

What should you measure in the first 90 days?

Measure the things that tell you the transition worked, not a vanity rank.

• Featured-offer share on the ASINs you meant to keep, and the price at which you won it.
• In-stock rate, and the number of days any hero ASIN was suppressed or stranded.
• Contribution after referral fees, fulfillment, returns, and ads. Not gross merchandise value.
• Order-defect and late-shipment rates if any orders are seller-fulfilled.
• The share of sales that came from searches for the brand name. That is the beginning of equity. A page that only sells when the query is a generic keyword is still renting the shelf.

What is this not?

It is not a recommendation to leave Vendor Central on principle. Some brands are better off wholesaling to Amazon and putting their energy into a direct store, wholesale, or another marketplace. It is not a project plan with day counts. Receiving times, trademark status, and how much vendor stock is already in the network change the calendar. It is the short list of decisions that, if you skip them, turn a controlled exit into a stockout.

Questions

What is a 1P to 3P transition?

It is the move from Amazon buying the product on Vendor Central to the brand selling it on Seller Central. Amazon stops being the seller of record on the units you now offer. You take the price, the fees, and the stock.

What belongs on the P&L?

Write both. 1P revenue is the purchase order. 3P revenue is the shopper’s payment, minus referral fees, fulfillment, returns, ads, freight, duty, and the cost of the goods. Do not copy a Net PPM figure into the 3P model. The full line list is the Vendor Central essay.

Is 3P always more profitable?

No. You only know after both P&Ls use your cost and Amazon’s current fee schedule. We do not publish a typical spread.

Sources

• Amazon selling plans and FBA. How Amazon describes seller plans and fulfillment.
• 2026 US referral and FBA fee update. The average FBA change and the notice period.
• Amazon Brand Registry. The trademark step if the vendor account is not in the brand’s name.

Book a strategy call

If a vendor relationship is no longer the US business you want, send a brief or Book a strategy call. The build that follows the choice is ecommerce and distribution.