Amazon Ends 1P Brand Sales: What’s Next for Affected Brands?

Recently, Amazon has begun notifying certain brands that sell products in bulk on its platform that it will terminate their sales. These brands primarily participate in Amazon's 1P invitation-only program. Brands affected by this change include well-known consumer goods giants like Nestlé and Procter & Gamble. This sudden news has left many brands feeling overwhelmed, especially with the crucial holiday shopping season approaching.

Amazon has stated that as part of its regular product supply review and operational optimization, it will stop selling products from these brands starting on November 9. While some brands will be notified two to three months in advance, overseas 1P brands will receive termination notices six months ahead. Brands that receive such notifications may ultimately need to transition to selling on Amazon as third-party sellers. This adjustment is intended to allow Amazon to focus more on higher-volume and more profitable brands, improving operational efficiency.

Reportedly, Amazon’s target seems to be brands with annual sales between $1 million and $5 million.

In addition, Amazon is inviting vendors forced out of the 1P model to sell products on Amazon as independent sellers. Affected brands can continue operating as third-party sellers on Amazon, retain access to the same customer base, and have the option to use Amazon’s fulfillment services.

However, this shift to the 3P model presents challenges for 1P brands. Brands that rely solely on Amazon for sales will need to diversify and rapidly scale up on Amazon; otherwise, they risk losing customers and missing out on the holiday shopping season’s major sales opportunities.