Amazon Europe have announced a major change to sourcing policy this week which will cut out all 1P distributors, but what does this mean if you are a brand or an Amazon competitor?
There are 3 ways to sell on Amazon:
1P: Products sold directly by Amazon
2P: Products sold by Amazon but sourced from a third-party
3P: Products sold by third-party sellers on the Amazon marketplace
You quite often see a mix 1P/2P/3P offers for the same product on Amazon, and all are competing for the coveted ‘Buy Box’. Price often, but not always, drives the winner of the Buy Box, with Fulfillment, Seller Performance and Product listing accuracy also influencing the choice.
The sourcing policy change this week in Europe will mean Amazon will no longer source 1P products from distributors, and instead go direct to brands, in an attempt to increase margins.
My take on this depending on who you are:
As a Brand this is an opportunity to build a direct relationship with Amazon, sell direct-to-consumer and potentially expand your margins. Beware of channel conflict given price and marketing are largely taken out of your control. ShopGrok can help monitor Amazon’s pricing vs your other channels to minimise this.
As a Marketplace (or a Retailer looking to build one), this is certainly an opportunity to identify quality distributors who will be looking elsewhere for channels to sell their product. ShopGrok can help identify suitable range and seller profiles to onboard to your marketplace.
If you are a retailer, marketplace or brand looking for data-driven insights to better navigate your pricing, promotions or ranging strategy, reach out to us to see the tailored solutions ShopGrok offers to your retail vertical.
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