Amazon 1P vs 3P: The Numbers That Should Decide It

For years you could postpone the Vendor Central versus Seller Central question and nothing bad happened. That stopped on November 9, 2024, when Amazon began ending 1P access for vendors below a revenue threshold and pointing them at Seller Central. Whether you are weighing a move or defending the model you already run, two operational differences carry most of the weight: who sets the retail price, and who is carrying the receivables. Both of them are measurable inside your own account, which is where this piece ends up. If you want the two programs defined from the ground up first, our comparison of Vendor Central, Seller Central, and hybrid selling covers that ground; here we assume you already have one of these accounts open.

What changes day to day

When the model changes, three things move with it, and each one lands on a different part of the business.

Who prices your product. Under 1P, Amazon buys your units and becomes the retailer of record, so the retail price is Amazon's to set, and that includes pricing below the MAP you enforce through every other channel. Under 3P you stay the seller of record and price your own listings, which is why the 1P arrangement lands hardest on brands running a tight MAP program across retail and DTC.

When you get paid. 1P vendor payment terms commonly run net 60 to 90 days from invoice, while 3P disbursements arrive on roughly a two-week cycle. At small volume that gap is an annoyance you absorb, but at volume it turns into a financing question, because the invoiced revenue sitting unpaid at any given moment scales with your run rate while the terms stay where they are.

How Amazon takes its cut. On 1P the deduction arrives after the fact, as non-compliance chargebacks against shipments and documents that missed a requirement, and Vendor Central reports them by status: Pending, Waived, and Enforced. On 3P the cost is priced in up front as a category referral fee, 15% in Home & Kitchen with per-item minimums, plus FBA fulfillment fees if Amazon is picking and packing. What really separates the two is variability, since you can read the 3P fee schedule before the order exists, whereas a 1P chargeback total is closer to a report card on how your operation performed last month.

The event that forced the question

Plenty of vendors never got to make this decision at all. Effective November 9, 2024, Amazon began terminating Vendor Central access for smaller vendors: US accounts under $5 million and EU accounts under €2 million in annual sales lost 1P and were directed to Seller Central. Advance communication was thin, and the timing landed uncomfortably close to Q4 for anyone who had already built a holiday plan around incoming purchase orders.

If that describes your account, the useful question is what changes in your reporting and your cash planning once the 1P side goes dark. Four things go with it: the chargeback ledger you have been managed against, the fill-rate percentages confirmed at PO confirmation, the long receivables tail (which improves), and every report you built on top of PO and remittance data. That last one is what teams underestimate. Seller Central hands you orders and settlements where Vendor Central handed you purchase orders and shipments, so those reports get rebuilt rather than repointed, and the work starts on day one whether or not anyone scheduled it.

Running both, and the reconciliation bill

It is common for larger vendors to keep both accounts open, moving part of the catalog through 1P and part through 3P, and that can be the right answer. The cost that rarely gets named up front is reconciliation, which recurs every reporting period instead of landing once at setup.

The two account types describe the same business in different units. Vendor Central organizes your world around purchase orders and shipments, while Seller Central organizes it around orders and settlements. So when someone asks how a product performed last quarter across the whole business, somebody has to line those two up by hand, matching the catalog identifiers, aligning the period boundaries, and deciding what counts as a unit sold on each side. That work is usually why the answer arrives a week after it would have been useful.

The practical consequence is that hybrid accounts often cannot answer basic questions on a single timeline, like which SKUs carry the deduction load, whether a 3P price move moved 1P sell-through, or what contribution looks like per ASIN across both.

What to pull before you decide, or defend, your model

Pull four numbers for the same period, and the last full quarter works well for this.

1. Your deduction rate. Total enforced chargebacks for the quarter, divided by invoiced revenue for the same quarter. Count Enforced separately from Pending, since Pending has not been finalized and some of it will be waived. What you get is the honest cost of running 1P at your current compliance level.
2. The same revenue priced as 3P. Take that quarter's revenue and apply your category's referral rate, which is 15% in Home & Kitchen and worth checking against the published schedule if you sell elsewhere, plus FBA fulfillment fees per unit if you would use FBA. Now you have two cost lines you can compare directly, instead of an instinct about which model is cheaper.
3. Cash sitting in the settlement window. At net 60 to 90 day terms, work out how much invoiced revenue is outstanding at any given moment, then compare that against a roughly biweekly 3P disbursement cycle at the same volume. The difference is working capital you are financing today.
4. Whether your reporting actually reconciles. If you have both account types open, check whether anyone can produce a single view of the two for the same period, or whether the answer always shows up as two exports stapled together.

The first and fourth are where reporting tooling earns its keep. InsightLeap brings product-level sales, inventory, and purchase order data onto one set of screens alongside Net PPM, glance views, buy box ownership, and Amazon's published demand forecast, and the Amazon vendor analytics page lists what gets tracked. The metric descriptions glossary spells out what each field counts, down to how Fill Rate - Accepted Rate and Fill Rate - Backordered Rate are calculated at PO confirmation, which is the vocabulary you will want before you start assembling the first number on this list. For hybrid accounts, optimizing your hybrid selling model covers how vendor-account customer behavior data can inform seller-side decisions.

What the numbers settle

Put the four figures side by side and the argument narrows fast. A deduction rate comfortably below your category's referral fee, on an account with a clean compliance record and enough working capital to carry 60 to 90 day terms, is a strong case for staying on 1P. A deduction rate that climbs every quarter while your team fights chargebacks, or a receivables balance that is squeezing purchasing decisions, makes the 3P math look better before you even count the pricing control you get back. And if Amazon already made the decision for you in late 2024, those same four numbers are how you plan the first two quarters on the other side.

Start with the deduction rate, since it is an afternoon's work in the Chargebacks section divided by the quarter's invoiced revenue, and every other line in this comparison hangs off that figure.