Amazon Strategy
Why Amazon's Hybrid Model Is Decided One ASIN at a Time
Chris Turton explains how brands can run Amazon vendor and seller accounts side by side without losing margin, the buy box or their vendor relationship.
Amazon Vendor | Driving Commercial Success Via a Hybrid Account Strategy(1P+3P)
Video from MerchantSpring.
Generated from the canonical interview transcript and validated against source data by Guests on Air.
How should a brand run Amazon vendor and seller accounts together?
Treat the hybrid model as a product by product decision. Keep a product on vendor while purchase orders, pricing and margins work, and move it to seller when Amazon stops buying it or its retail price clashes with other stockists. Never run the same product through vendor and FBA at once, and talk to your vendor manager before opening a seller account.
For years, brands treated Amazon vendor and Amazon seller as a choice made once for the whole business. Chris Turton, managing director of the consultancy Ecommerce Intelligence, argues that the choice now has to be made product by product. On a live Marketplace Masters episode hosted by Paul Sonneveld, he set out how a hybrid account works in practice and where it goes wrong.
The timing matters. Chris sees vendor managers disappearing or leaving, while tools that used to be vendor perks, such as brand analytics, are now open to sellers too. In the EU, Amazon has also been pulling away from sourced product ranges within vendor, so brands that relied on the old model are being pushed to rethink it.
His answer is not to abandon vendor. It is to test every product against profit, pricing control and operational reality, then keep each one in the channel where it actually earns. That makes the hybrid model a balancing act, and one that rewards brands willing to crunch the numbers line by line.
Key takeaways
- Decide vendor or seller for each product on profit, pricing control and sales velocity, not for the whole brand.
- Never send the same product into both vendor and FBA, because the buy box conflict hurts either orders or your IPI score.
- Vendor can look cheaper than seller until chargebacks, shortage fees and each brand's unique terms are counted.
- Talk to your vendor manager first and read Amazon's terms before opening a seller account alongside vendor.
1. What a hybrid Amazon account really means
Chris defines the hybrid model as running an Amazon vendor account, known as 1P, alongside a seller account, known as 3P. A few years ago that was close to forbidden. Vendor was king, with premium marketing packages, first place in the queue for Prime Day and deals of the day, and access to invite only programmes such as Amazon Fresh.
Those advantages still exist, he says, but the reasons to add seller have grown. Amazon's purchase orders are now decided more algorithmically, so a product that is not profitable enough for Amazon may simply stop being bought. Vendor also sets the retail price once it has your cost price, which can clash with the prices a brand agrees with supermarkets and other retailers.
One of his clients supplies all the major UK supermarkets. Moving certain lines from vendor to seller gave that brand back control of its retail price and took the heat out of channel conflict. Chris frames the whole model as a balancing act between what works for each individual listing, product by product, rather than a single decision for the account.
2. The mistakes that cost brands the buy box
The most common error Chris sees is a brand listing a product on vendor and then also sending the same product into FBA. Either the FBA offer wins the buy box and vendor purchase orders suffer, or vendor keeps the buy box and the FBA stock sits unsold. That stuck stock then drags down the IPI score, which he describes as a credit score for FBA inventory.
Fulfilling orders yourself is a different case. UK vendor managers have told his team that vendor plus merchant fulfilment can act as a backup, picking up orders if a vendor listing drops out of stock for a technical reason. It is not ideal, he says, but it keeps the product available and protects the customer experience, which is the point of the whole exercise.
Cost comparisons can mislead too. Seller fees in the UK run from about eight to fifteen percent plus FBA fees, while vendor terms are unique to each brand and some new clients arrive on terms well above that range, before chargebacks and shortage fees. Many brands also underestimate the workload, because vendor can be every bit as technical to manage as seller.
3. How one brand doubled revenue by splitting its range
Chris's clearest example came from a large brand that arrived with its range split evenly between vendor and seller but no process behind either. It had no vendor manager, had recreated vendor stock inside seller and had pushed FBA stock into lines that vendor already carried. His team ran a price analysis, reviewed performance and stopped the two channels competing for the same products.
Lines with healthy purchase orders and profit stayed on vendor, even without vendor management. Lines that missed their net PPM targets moved to seller. The account now runs at roughly an 80/20 split, and revenue has more than doubled, from about 16,000 pounds a month in 2021 to around 35,000 pounds a month today.
When Amazon refuses a price increase, his advice is to negotiate with the vendor manager first and only then analyse moving the line to seller. Rising costs from Brexit, fuel and the war in Ukraine have squeezed margins, and most brands simply want a fair 20 to 30 percent. A product that cannot make money has no place on Amazon, whichever channel carries it.
