Moving smaller vendors to its third-party platform allows Amazon to eliminate costs associated with directly supporting smaller companies that bring in less revenue. Once a business is on the third-party platform, Amazon also has the ability to charge for additional services, such as Fulfilled by Amazon and account management.
Amazon’s first-party business will focus on maintaining relationships with high value brands and companies involved in the production of Amazon’s private-label products.
The change is expected prove difficult for smaller, first-party vendors that lack the existing systems and infrastructure to support competitive third-party marketplace sales and distribution.
