Selling directly to Amazon Retail looks simple at first. Amazon sends purchase orders. You ship wholesale. They handle fulfillment, customer service, and Prime eligibility. For brands without a large internal ecommerce team, the 1P model can feel like the path of least resistance.
But the operational reality is harder than the pitch. Amazon becomes your customer, which changes pricing power, margin visibility, and strategic control. Revenue can look strong on the surface while contribution margin slowly erodes underneath. And the problems that brands faced in 2018 (when this conversation started at trade shows like the National Hardware Show) haven't gone away. They've gotten more specific.
Here's what Vendor Central still does to brands in 2026, and what leadership should review before deciding to stay 1P, move to Seller Central, or test a hybrid setup.
Vendor Central (Amazon's wholesale platform, also called 1P) offers several real advantages:
For brands used to traditional wholesale distribution, selling to Amazon Retail can feel familiar.
But the market has shifted. More than 60% of sales in Amazon's store now come from independent sellers (3P), not Amazon Retail. Amazon itself has improved Seller Central infrastructure with tools like Supply Chain by Amazon (which Amazon says lifts conversion an average of 20%) and Project Amelia (AI-powered seller support). That means the old assumption that "only 1P gives you operational simplicity" no longer holds as strongly.
At the same time, brands in Vendor Central are reporting tighter profitability scrutiny, more aggressive purchase-order behavior, recurring deduction issues, and pricing pressure that creates channel conflict. The question in 2026 isn't "Is Vendor Central hard?" It's "Is this still the right operating model for our business?"
Vendor Central (1P): You sell wholesale to Amazon. Amazon becomes the retailer. They set the retail price, own the customer relationship, and control much of the listing and pricing behavior. You get paid on wholesale terms (often 60-90 days), and Amazon handles fulfillment and customer service.
Seller Central (3P): You sell directly to customers on Amazon's marketplace. You control pricing, own the customer data (within Amazon's ecosystem), and manage inventory through FBA or your own fulfillment. You get paid faster (typically within two weeks), but you handle more operational responsibility.
Vendor Central can still work when:
It starts to break when:
When Amazon is the retailer, they decide the retail price. If a competitor lowers their price or if Amazon's algorithm determines a lower price will increase total revenue, Amazon adjusts. That can put pressure on your Minimum Advertised Price (MAP) policy and create tension with other retail partners who see Amazon undercutting them.
Brands that depend on consistent pricing across channels often find this is the first place Vendor Central creates friction.
If Amazon controls the retail price and your wholesale price is fixed by contract, any retail price drop comes out of Amazon's margin, not yours. That sounds fine until Amazon pushes back on cost increases, renegotiates terms, or reduces purchase volume. The loss of pricing control becomes a loss of negotiating power.
Vendor Central accounts face recurring deductions:
None of these alone looks fatal. Together, they create steady margin erosion that finance teams often miss until they reconcile Amazon revenue against actual profitability.
A brand can see $500K in Amazon Retail revenue and assume profitability is strong. But once shortage claims, chargebacks, co-op, and allowances are reconciled, contribution margin can be far weaker than leadership thought. The problem isn't that Amazon is hiding the deductions. It's that the deduction structure is complex enough that it takes work to track, dispute, and recover.
When you sell wholesale to Amazon, you care about sell-in (getting Amazon to buy more). Amazon cares about sell-through (moving inventory to customers). If sell-through slows, Amazon reduces POs. That creates planning risk.
Brands that depend on consistent Amazon volume for production forecasting, supplier commitments, or cash-flow planning often find PO behavior harder to predict than traditional retail.
PO volatility can create two problems at once:
This is where the "operational simplicity" of Vendor Central starts to feel less simple. You still need tight supply-chain coordination, but now you're reacting to Amazon's buying behavior instead of controlling your own inventory flow.
In Vendor Central, brands can contribute content through Amazon's tools and Brand Registry, but Amazon still owns the retail listing. That means:
For brands used to owning their product presentation, this feels like a loss of control.
Brand Registry gives you more content protection and access to A+ Content, but it doesn't change the fact that Amazon is the retailer. You can improve the listing, but you can't dictate pricing behavior, promotional strategy, or exactly how Amazon presents your product in search or recommendations.
Vendor Central support is often described as slow and hard to reach. Part of the problem is structural: Amazon Retail operates as a buyer-seller relationship, which means you're working with a procurement team, not a support desk. When issues arise, escalation paths are less clear than in Seller Central, where you can open cases and track status.
Managing a Vendor Central account well requires coordination across:
That's not a support problem. It's an operating-system problem. Brands that treat Vendor Central as "set it and forget it" often struggle.
Vendor Central accounts can run Amazon advertising, but the campaign structure and targeting options are different from Seller Central. You have access to Sponsored Products, Sponsored Brands, and DSP, but you're advertising on behalf of Amazon-as-retailer, which changes how attribution, reporting, and creative control work.
For brands that want tight control over advertising spend, creative, and attribution, Seller Central offers more direct campaign management.
The advertising difference alone isn't enough to justify switching. But when you combine weaker ad control with pricing control issues, margin leakage, and PO volatility, many brands start asking: "What if we moved high-margin SKUs to 3P and kept bulk replenishment items in 1P?"
That's the hybrid conversation. And in 2026, it's more common than it was five years ago.
Watch for these patterns:
These are signals that the operating model may be wrong, not that you need better Vendor Central execution.
Seller Central makes sense when:
A hybrid model makes sense when:
The best operators treat this as a strategic portfolio decision, not an all-or-nothing switch.
Contribution margin by SKU: Not just revenue. Actual profit after deductions.
Deduction rate: What percentage of invoiced revenue is lost to chargebacks, shortages, and allowances?
PO volatility: How much do Amazon orders fluctuate month-to-month, and what does that cost in planning risk?
Cash-flow impact: How much working capital is tied up in 60-90 day payment terms?
Internal resource cost: How many hours does your team spend managing Vendor Central vs the revenue it generates?
If the answers suggest the model is creating more cost than value, that's a planning signal, not a failure.
We help brands assess 1P, 3P, and hybrid strategies based on real profitability data, not just top-line revenue.
Talk to Our TeamNeither is universally better. Vendor Central works for brands that want operational simplicity and can absorb Amazon-controlled pricing. Seller Central works for brands that need pricing control, faster cash flow, and tighter profitability management. Many brands now run hybrid models (some SKUs in 1P, others in 3P) to balance control and scale.
Margin leakage from deductions and chargebacks, pricing control loss that creates channel conflict, PO volatility that complicates forecasting, and the internal coordination cost required to manage compliance, disputes, and account health.
The most common reasons: pricing control matters for MAP or channel positioning, contribution margin is weaker than expected after deductions, PO behavior creates too much planning risk, or leadership wants faster cash flow and tighter profitability visibility.
Not directly. When Amazon is the retailer, they control the retail price. You can negotiate wholesale terms, but you can't dictate what Amazon charges customers. That's why MAP-sensitive brands often prefer Seller Central, where they set retail pricing themselves.