Types of Ecommerce Sellers – 1P, 2P, 3P
Ecommerce has a language of its own and unlike brick and mortar stores, there are 3 different types of relationships brands can have with the retailer marketplace. Here’s a simple 101 of when you hear 1P, 2P, and 3P.
1st Party (1P)
You are selling directly to Walmart, Target, Amazon or other retailers. They take ownership of your product and house it in their own warehouses. This is the more traditional relationship that’s the primary arrangement for brick and mortar. Customers will see that it is sold and shipped by the retail as seen below:
2nd Party (2P)
This is the type of seller who relies on the distributor partnership to get their products shipped. This is when a brand sells to a distribution partner and the retailer then buys from that partner. For example, your customer will see the “sold by brand, ships from Amazon” Your products are in Amazon warehouses and when an order comes in, the Amazon fulfillment centers ship out the product to complete the order.
3rd Party (3P)
Often called “marketplace” or seller. This is when a brand retains ownership of their product and uses a platform to market their products. The seller oversees their own fulfillment strategy. When your products are up on the marketplace it will show you have complete ownership and control of the product. See below the “ships from and sold by” are from the same vendor: