Do Private Brands Need a 3P Partner?

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Selling on Amazon seems like a no-brainer for private label brands. You’re able to reach a wider audience than you would normally. Your customers have an easy way to buy your products without the hassle of hosting your own storefront online. Plus, you get an extra search boost with customers being able to find you on Google and Amazon.

If you’re thinking about or are already selling on Amazon, a 3P partner can help you maximize your profit and increase sales. 

Myths about a 3P Partner for Amazon

There are many differing opinions on 3P partners, depending on who you ask. However, there are certain myths out there about working with a 3P partner. Let’s dispel three of the more prevalent myths about working with a 3P partner. 

Myth 1: We can continue to grow our business with the staff we have. One of the most common things we hear from brands that are hesitant to work with a 3P partner is that they can handle the sales volume and subsequent business growth with their current staff. What they eventually find is that their staff are unable or unwilling to handle the sales bump or the tasks needed to grow their business alongside their Amazon sales. The cost for recruiting and hiring additional staff is much more than the cost of working with a 3P partner.

Myth 2: A 3P seller will not care about our brand as much as we do. It can be a little scary turning your brand over to a third party on a sales channel as big as Amazon. A good 3P partner sees your success as their success. Caring about your brand integrity goes hand in hand with ensuring that your brand is successful selling on Amazon. 

Myth 3: A 3P seller will be disruptive to our marketplace pricing. The mark of a good 3P partner is one that will work with you and let you set the pricing for your products in the Amazon marketplace. You should be able to control the price your products sell at, along with all content, copy and images.

Pros of Working with a 3P Partner

Now that you know what working with a 3P partner isn’t, let’s dive into what working with a 3P partner is like. There are many pros for private label brands working with a good 3P partner. 

  1. Save money on infrastructure and operating expenses. Setting up your own 3P enterprise can cost a lot of money for a private label brand. You need to add staff to handle the new business. You need to ensure your hardware is capable of integrating with Amazon’s seller network. You need to be able to scale up your shipping operation to handle the increase in volume. A 3P partner has all of this already so you don’t have to worry about any of it. 
  2. Less worry about customer support and reputation management. One of the biggest determining factors for Amazon shoppers is the product rating and customer reviews. It’s important to have a 24/7 customer support service in order to quickly and adequately handle any negative reviews or customer complaints. If customers are neglected for too long, it can lead to additional negative product reviews which can lower sales volume and general trust in your brand and product.
  3. You don’t have to handle returns. With a 3P partner, you sell them your products at your standard wholesale price and they take care of getting the product into the customer’s hands. This means that you don’t have to worry about the product once it’s out of your hand. Your 3P partner will be responsible for handling all the returns processing and management.
  4. Zero learning curve. There is a significant learning curve to becoming a successful 3P seller on Amazon. One tried and true way to become better as a 3P seller is to hire Amazon consultants to help. There are two problems here. One is, if you decide to tackle it on your own, it will take you a while to ramp up to your full potential as an Amazon 3P seller. Two, Amazonian consultants are expensive and results aren’t guaranteed.

Additional Benefits 

Still on the fence? Take a look at all the benefits your private label brand will reap from working with a 3P partner.

  • Increased brand control with you determining cost, branding, images, and copy.
  • Better control over pricing with access to 3P experts who can help you set the right price.
  • More options to increase sales velocity.
  • More support and flexibility to update listings.
  • Lower fees and higher margins for your brand.
  • They handle the back office accounting and account reconciliation. 
  • 24/7 customer service to handle product rating and reviews. 

 

Ready to take the leap and work with an experienced 3P partner for your Amazon shop? Contact us at Phelps UNITED to see how we can increase your profitability on Amazon.