Overview

What would you do if Amazon suddenly closed your Vendor Central account? For many Amazon vendors, this isn’t a theoretical question – it became reality in late 2024 when Amazon announced it would terminate a swath of Vendor Central accounts. The news hit just before the crucial Q4 holiday season, sparking panic across the industry. Smaller vendors under a certain revenue threshold are being told to transition off the 1P (first-party) vendor model and into 3P (third-party) Seller Central. LinkedIn discussions lit up with worried posts, and Amazon agency professionals found their clients looking to them for answers.

In this episode of Marketplace Masters (our Amazon strategy webinar series), host Paul Sonneveld – Co-Founder of MerchantSpring – sat down with Alexandra Carmody (LinkedIn), VP of Brand Strategy at Front Row (an e-commerce agency for consumer brands). Their mission: to demystify Amazon’s latest Vendor Central shake-up and arm vendors (and the agencies supporting them) with a game plan. Alexandra has helped guide many brands through the shifting sands of Amazon, and her insights couldn’t be more timely.

Amazon’s Vendor Central Crackdown: Why Accounts Are Being Terminated

Amazon has begun phasing out many smaller Vendor Central accounts – a dramatic shift often referred to as the 2024 Amazon Vendor Central shake-up. Vendors doing under about $5–$10 million in annual Amazon business have been receiving emails that their 1P vendor relationship will end (with a cutoff date around November 9, 2024, in many cases). This means Amazon will stop sending purchase orders and no longer buy inventory from these vendors. Instead, affected brands are “encouraged” to transition to Seller Central, i.e. become third-party sellers on Amazon’s marketplace.

Why is Amazon doing this? In a word: profitability. Amazon’s Vendor Central program comes with significant overhead – Amazon must manage buyer teams, negotiate with hundreds of small suppliers, and handle fulfillment logistics for each. Focusing on a smaller number of large vendors (think Fortune 500 brands) is simply more efficient and profitable for Amazon. As Alexandra Carmody put it during the webinar:

“Amazon doesn’t want to lose your revenue – they still want you on the platform – but at the end of the day, for them it’s really just profitability.” — Alexandra Carmody

By offloading smaller brands to the 3P marketplace model, Amazon shifts many costs and responsibilities onto the sellers themselves while still retaining those products on Amazon. In Seller Central, brands have to manage their own pricing, inventory, and customer service (or pay Amazon fees via FBA), which improves Amazon’s margins. Meanwhile, Amazon can redeploy vendor management resources toward big-ticket manufacturer accounts and major product launches that drive higher volume.

Is this a temporary move or a long-term policy? According to Carmody, this appears to be a long-term strategic shift. 2023–2024 saw Amazon aggressively focus on cost-cutting and efficiency. The Vendor Central culling is part of that broader initiative. We’ve seen hints before (e.g. periodic culls of vendors or forcing distributors out of the channel), but this wave feels deeper and more permanent. Amazon is essentially redefining what qualifies for a 1P vendor relationship (shifting the bar upward in revenue). Smaller brands will likely need to prove themselves in the 3P arena going forward, or partner with distributors, rather than relying on Amazon’s wholesale program.

From Amazon’s perspective, this streamlining also helps unclog operational bottlenecks. Vendor orders contribute to Amazon’s burden of forecasting demand, purchasing inventory, and handling warehouse logistics. Recent Amazon logistics challenges (like FBA warehouse backlogs in peak season) have shown that Amazon needs to be more choosy about inventory. By cutting long-tail vendors, Amazon can prioritise warehouse space for higher-turnover products and push others to a consignment model (FBA) where sellers bear the risk of overstock. In essence, Amazon is saying: “We’ll focus on selling products; you (the brand) handle supplying and managing them.”

For vendors caught in this shift, the timing was brutal – many got the news in Q3/Q4, just as holiday promotions ramped up. Panic is an understandable reaction. However, as we’ll discuss next, there are steps vendors and their agency partners can take to navigate this upheaval. It starts with understanding the risk factors that might put a vendor on Amazon’s chopping block.

Is Your Vendor Account at Risk? Key Factors Amazon Targets

If you haven’t received “the email” (the dreaded notice of vendor account termination), count yourself lucky – but don’t get complacent. It’s wise to evaluate your Amazon vendor account through Amazon’s eyes and address any weaknesses proactively. Here are the key factors that could put a Vendor Central account at risk of closure, based on recent trends:

• Annual Revenue Below Threshold: While Amazon hasn’t publicly stated a hard cutoff, industry chatter and cases suggest that vendors doing under roughly $10 million/year on Amazon are prime targets for offboarding(digitalposition.com). If your Amazon revenue is in the single-digit millions or less, you should assume you’re on the bubble. Amazon wants to focus vendor management on higher volume accounts; smaller accounts are being deemed not worth the overhead.
  
  
• Poor In-Stock Rate on Key Items: Amazon cares deeply about supply reliability. Out-of-stock issues frustrate Amazon’s retail customers and waste their operational effort. Alexandra Carmody noted that many vendors who got cut had subpar in-stock performance. Pay particular attention to your top-selling ASINs (the 20% of SKUs that drive 80% of sales). If Amazon’s purchase orders for those items often go unfilled or get shorted, that’s a red flag. Consistent vendor out-of-stocks make Amazon look bad and suggest your business isn’t operationally sound. On the flip side, vendors who maintain a high fill rate and meet Amazon’s demand may fare better.
  
  
• Lack of Growth or New Products: Amazon is biased toward growing brands and selection expansion. If your product assortment on Amazon has gone stale (no new product introductions, no Amazon-exclusive bundles or innovations), you could be seen as a low opportunity vendor. Vendors that regularly launch new SKUs, especially ones exclusive to Amazon or first-to-market, demonstrate commitment to the channel. An assortment expansion strategy can signal that your brand is investing in Amazon. If your catalogue and sales have plateaued or declined, that’s not a good sign for retaining vendor status.
  
  
• Low Traffic & Advertising Support: Amazon tracks how much consumer demand your brand is driving on its platform. If you’ve pulled back on marketing support – whether Amazon PPC ads, DSP campaigns, or external traffic driving to Amazon – your sales may be lagging. Some brands in the past year cut their Amazon ad budgets or off-Amazon campaigns due to economic pressures. But a sudden drop in traffic or sales momentum could make Amazon question the value of your vendor account. Vendors who actively drive growth (through ads, promotions, and external marketing like social media or influencers pointing to Amazon) show that they are bringing customers to Amazon, not just riding organic traffic. Consistent investment in Amazon SEO and advertising helps keep your sales velocity up and Amazon happy.
  
  
• Profitability and Trade Terms: Let’s not forget Amazon’s profit motive. If your vendor account has slim margins for Amazon – perhaps due to high cost of goods, frequent chargebacks, or needing deep discounts – it could be a factor. Amazon hasn’t explicitly said they’re cutting vendors for low profitability, but it implicitly ties to revenue: smaller accounts often mean lower absolute profit. Additionally, vendors that only participate in Vendor Central and not in Amazon’s advertising or promotional programs might be seen as less profitable overall. For example, if you haven’t been funding deals, co-op, or Amazon Ads, your net PPM (pure profit margin for Amazon) might not shine. While you shouldn’t recklessly boost Amazon’s cut at your expense, being aware of Amazon’s margin on your line is wise. Sometimes shifting some budget from ads (which don’t reflect in Amazon Retail’s P&L) into vendor terms (like better co-op or more deals) can improve how attractive your account looks on Amazon’s books.
  
  

In short, Amazon is scanning for vendor accounts that are “low value” or “high hassle.” Low annual sales, spotty inventory, meagre growth, and little marketing support all paint a picture of a vendor that isn’t pulling its weight in Amazon’s eyes. As an Amazon agency professional, it’s a great exercise to audit your vendor clients on these factors. If some metrics look weak, that’s where to focus improvements now – before Amazon makes a decision for you.

Proactive Steps to Protect Your Vendor Account

The good news is that vendors do have options to reduce their risk profile. It boils down to a simple principle: make your brand indispensable to Amazon’s marketplace. Here are practical steps Amazon vendors (and their agencies) can take today to safeguard against account closure:

• Double-Down on Supply Chain Excellence: Get your inventory house in order. If Amazon is regularly understocked on your top sellers, you need to fix that fast. Analyse your fill rates and lead times. Improve your forecasting for Amazon-specific demand, especially around seasonal peaks. It may mean holding more safety stock or prioritising Amazon orders in your production queue. The goal is a near-100% in-stock record on the SKUs that matter. Remember Amazon’s 80/20 rule – identify the SKUs that drive the bulk of your Amazon revenue and ensure those are never out of stock. This might involve streamlining your catalogue to focus on fewer, better-supplied products if needed. A consistently high in-stock rate signals reliability. As Alexandra emphasised, if global supply chain issues hit you in the past year, now’s the time to build more buffer stock for Amazon.
  
  
• Offer Amazon-Exclusive Products or Bundles: One way to increase your strategic value to Amazon is by giving them something unique. Consider creating an Amazon-exclusive bundle or SKU that isn’t available through other retailers. For example, a special gift set, a multi-pack, or a unique flavour/variant that’s only on Amazon. This not only can boost your Amazon sales (because fans of your brand must come to Amazon for that item), but it also shows Amazon you’re committed to growing their channel. Co-developing these exclusives with your Amazon vendor manager can sometimes lead to merchandising opportunities (e.g. Amazon featuring your exclusive in holiday promotions). The key is to integrate Amazon into your product development roadmap, rather than treating it as just another outlet for existing SKUs.
  
  
• Pump Up the Demand: Ads and Off-Amazon Traffic: Don’t rely on Amazon to do all the selling for you. A robust Amazon advertising strategy is essential to maintain sales velocity and organic ranking, especially if competition is fierce. Make sure you’re running Sponsored Product campaigns on your core items and exploring Sponsored Brands or DSP if relevant. But equally important is driving external traffic to Amazon. This might include social media campaigns (TikTok, Instagram, etc.), email marketing to your list with Amazon as the landing page, influencer partnerships where the call-to-action is to buy on Amazon, and even press or PR that mentions your Amazon availability. 
  
  Amazon’s algorithm now rewards external traffic through the Brand Referral Bonus program, effectively giving you a rebate on sales you drive from outside. By funneling outside interest into Amazon, you both boost sales and curry favour with Amazon – you’re helping grow their customer base and sessions. Some vendors scaled back off-Amazon spend in recent times, but if you want to stay in Amazon’s good graces, consider allocating budget back to campaigns that ultimately feed Amazon sales.
  
  
• Enhance Profitability on Paper: This is a bit of a technical point, but as a vendo,r you might re-examine how you’re investing your Amazon dollars. Money spent on Amazon Ads, for instance, doesn’t show up in Amazon Retail’s income statement – it’s handled by a separate division. If you suspect your low net revenue or profit might be a strike against you, one lever is to shift some investment into vendor terms that do count in Amazon Retail’s view. For example, instead of (or in addition to) spending $50K more on ads, you could allocate $50K to fund a Vendor Powered Coupon or a Brand Tailored Promotion that discounts your product to Amazon customers. 
  
  This effectively lowers the cost Amazon pays you for the product during the promo (helping their margins) while driving volume. Or consider increasing your participation in subscribe-and-save discounts or other vendor-funded deals. These trade investments can bump up Amazon’s calculated profitability for your account. Of course, do the math: any short-term margin hit to you must be weighed against the long-term benefit of retaining Amazon as a channel. Sometimes a slightly higher co-op or an extra deal during holiday is well worth avoiding a vendor shutdown. As Alexandra noted, brands should be a bit more “promotionally heavy” than in the past – now is not the time to appear uncompetitive or tight-fisted on Amazon’s platform.
  
  
• Engage Your Amazon Vendor Manager: It might sound obvious, but if you have a vendor manager or an Amazon contact, open up a dialogue about your account health. Don’t wait for them to reach out. Ask if there are any concerns with your performance or any targets you’re missing. Vendor managers might not always be fully candid (and many are stretched thin), but they could provide hints. For example, if they mention low sell-through on certain ASINs or dissatisfaction with fill rates, take that as marching orders to improve. In some cases, Amazon might offer a chance to stay as a vendor if you hit certain growth benchmarks or if you agree to transitions like hybrid models. It never hurts to ask: “What can we do to ensure a continued partnership in Vendor Central?” Even if the answer is ultimately “nothing, it’s out of my hands,” you’ve signalled that you’re keen to remain and willing to adapt. At the very least, they might give guidance for a smoother transition to 3P.
  
  

In sum, show Amazon that your brand is thriving on their platform and playing ball with their objectives. Keep the sales growing, the products in stock, and the partnership lucrative for Amazon. While there are no guarantees, these actions tilt the odds in your favour. And even if the worst happens, you’ll be in a stronger position to pivot (because you’ve maintained momentum and customer goodwill on Amazon, rather than letting it wither). Speaking of pivoting, let’s talk contingency plans – what to do i,f despite your best efforts, Amazon decides to sunset your vendor account.

Have a Plan B: Preparing for a Vendor-to-Seller Transition

Hope for the best, but prepare for the worst. The vendors who are navigating this upheaval most successfully are those who started planning their Plan B early. If there’s even a whisper of risk around your vendor status, you should begin laying the groundwork for an alternative Amazon sales model. The goal is to avoid any interruption in selling or a loss of hard-won sales rank if you have to switch from 1P to 3P. Here’s how to get ready:

• Secure Your Seller Central Account ASAP: The moment you suspect your vendor account could be in jeopardy, begin the process of setting up a Seller Central account (if you don’t already have one). Opening a Seller Central account can take time – there are identity verifications, tax interviews, and often a video call verification now. In 2024, Amazon’s new seller verification process became more intensive, with backlogs reported. You don’t want to be stuck in limbo because your seller account approval is dragging on while your vendor account ticks toward closure. 
  
  Start the registration process early. If your company has multiple entities, decide which will hold the seller account. Get your documentation (business licenses, IDs, bank statements) in order to satisfy Amazon’s checks. In short, get in the queue for Seller Central so that you have an active seller account ready to go when needed. (If worst comes to worst and you don’t need it, you can keep it dormant or use it for hybrid sales as a complement to 1P.)
  
  
• Enroll in Amazon Brand Registry: If you haven’t done this as a vendor, do it now. Brand Registry is what links your brand’s trademarks to your Amazon presence and gives you control over your product listings. As a 1P vendor, you may have relied on Amazon’s listing contributions and had an Amazon Vendor Manager or Amazon’s system setting your content. Once you shift to 3P, Brand Registry is crucial to assert your ownership of the listings and prevent others from hijacking them. The Brand Registry process requires a registered trademark and a verification code sent to the trademark owner. This can take a couple of weeks if not already in place. Having Brand Registry will also unlock essential tools like A+ Content, Brand Stores, and the ability to report counterfeiters – all things you’ll want as you manage your brand directly.
  
  
• Map Your Catalogue and Data: Do an inventory of all your ASINs, product detail page content, customer reviews, etc. When transitioning from Vendor Central to Seller Central, you want a seamless transfer of your product listings without losing reviews or search ranking. The good news is that if you properly match your offers to the existing ASINs, the reviews and ranking history carry over (since they’re tied to the ASIN, not who’s selling). However, sometimes vendors have ASINs that are exclusive or not yet in the 3P catalogue. Plan how you will list each product – ideally by matching the ASIN (using the same SKU/UPC/EAN). 
  
  Gather product content (titles, bullets, descriptions, images) from Vendor Central or your files so you can re-upload or edit in Seller Central if needed. Essentially, create a catalogue transition plan: which ASINs will you continue, which might you drop, and are there any ASINs where you’ll need Amazon’s help to merge listings or enable you as the seller (e.g. if Amazon had it vendor-exclusive and it’s not open on 3P yet). In most cases, it’s straightforward: you list the same ASIN via Seller Central and win the Buy Box once Amazon Retail is gone. But doing this homework ensures no nasty surprises.
  
  
• Plan Inventory and Fulfillment Logistics: One of the hardest adjustments for former vendors is taking over inventory planning and fulfillment. With Vendor Central, you lived by Amazon’s purchase orders – if they ordered 1000 units, you shipped 1000 units to their DCs and the rest was their problem. In Seller Central, you have to anticipate demand and send inventory to Amazon FBA (Fulfilled by Amazon) ahead of the curve. Analyse at least 6–12 months of your vendor sell-through data (if available, use Amazon Retail Analytics reports or the ordering history). This can guide your initial FBA send-in quantities. 
  
  A common rule is to keep 4-6 weeks of stock in FBA, replenishing regularly, but also factor in lead times. Note that FBA inbound shipment processing can take 1–2 weeks to fully check in, especially during Q4 – longer than Vendor Central POs, which often became live in days. So build in that buffer. Also, consider your fulfillment model: FBA vs FBM (fulfilled by merchant). FBA is typically the best way to retain Prime eligibility and sales volume; it mirrors the fast shipping customers expect. In almost all cases, transitioning vendors should opt to use FBA for the majority of items, unless there’s a compelling reason to self-fulfill. 
  
  If you don’t have an in-house D2C shipping operation, now’s not the time to spin one up under panic – lean on Amazon’s network (just be mindful of FBA fees). If using FBA, ensure your 3P account is eligible for the Amazon Partnered Carrier program or Amazon Global Logistics if importing – you’ll want those cost efficiencies. Lastly, be mindful of FBA storage limits and fees: don’t send a 6-month supply all at once. It’s better to drip-feed inventory to avoid long-term storage fees, which Amazon has hiked recently. A big mistake to avoid is overstuffing FBA with too much inventory, which we’ll revisit in the pitfalls section.
  
  
• Pricing Strategy and MAP Enforcement: As a vendor, Amazon set the retail price of your products (often to your chagrin, if they decided to match a low price elsewhere). Now, as a 3P seller, you regain control over pricing on Amazon. This is a double-edged sword. On one hand, you can restore your MSRP or MAP pricing, potentially improving margins. On the other hand, you must stay competitive and consider end-customer perception – if Amazon was selling your widget for $19.99 and you suddenly list at $24.99, sales may dip. 
  
  Plan a pricing transition carefully. It might be wise to maintain similar price points initially to preserve sales rank, then gradually adjust if needed. Also, ensure any authorised resellers or distributors aren’t undermining your price – you may need to tighten your MAP policy and communicate to partners that you (or your chosen seller) will be the primary Amazon seller henceforth. 
  
  If multiple sellers are on your listings now, consider strategies to regain the Buy Box – sometimes a slight price cut or using FBA (while others are FBM) can do it. In the long run, having consistent pricing and ideally being the exclusive seller will protect your brand value. The good news, as Alex pointed out, is that moving to 3P can allow brands to scale faster with healthy margins, because you’re not forced into constant price-matching and you can build a premium brand experience on your terms.
  
  
• Customer Service and Operational Readiness: Seller Central comes with a host of new responsibilities: processing orders, handling returns and refunds, answering buyer messages and reviews, and maintaining account health (metrics like late shipment rate, order defect rate, etc.). Before flipping the switch, assemble your internal or external resources to manage these tasks. Will you dedicate someone from your team to monitor Amazon daily for customer messages and performance notifications? Do you have a system for refunding returns promptly and addressing any product issues that arise? 
  
  If you’re using FBA, Amazon handles most of the logistics and customer returns, but you still need to keep an eye on things. Also, prepare for the possibility of Seller Support cases – you’ll inevitably need to open support tickets to resolve listing issues or other glitches. It can be a frustrating experience (Seller Support isn’t exactly known for stellar service), so set expectations that resolution may require persistence. The key is not to underestimate the operational workload of running a Seller Central account. It’s very doable – thousands of brands do it – but it’s very different from the vendor world. Many vendors choose to have their Amazon agency step in here; as an agency, you might offer transition services to help former vendors get up to speed on these processes.
  
  
• Maintain Marketing Momentum: Just because you’re switching models doesn’t mean you should pause your marketing. In fact, during a transition, it’s critical to keep the foot on the gas so that the algorithm continues to see strong sales. Plan to run Amazon Ads under your new seller account from Day 1 of selling. If there will be a gap between vendor and seller availability (try to avoid it, but it can happen), consider off-Amazon outreach to let customers know you’ll be back in stock via a different seller. The worst outcome is you go dark and a competitor swoops in on your rank. 
  
  If you seamlessly switch to 3P with inventory ready and ads live, the hope is customers barely notice the change aside from a different “Sold by XYZ” label on the detail page. In many cases, brands retain the coveted Amazon Prime badge via FBA, and loyal buyers continue purchasing without concern. Still, it’s wise to monitor your organic keyword rankings and sales performance closely in the weeks after transition. If you see any dip, be ready to increase ad bids or run a limited-time deal to boost visibility and win back momentum. The goal is to emerge on the other side of the switch with your Amazon sales graph intact or even climbing.
  
  

By taking these steps, you’re effectively building a parachute before you have to jump. Should Amazon pull the plug on your vendor account, you can activate your Seller Central presence in short order – minimising any loss of sales. Many brands that have executed well even find that after a few months, they’re doing just as much revenue through 3P, with the added benefit of more control. In the next sections, we’ll explore the nuances of those alternatives, including hybrid models and working with third-party partners, as well as mistakes to avoid. But first, it’s worth examining whether a full DIY seller approach is your best route or if you should partner up.

Exploring Alternatives: Hybrid Models and 3P Partnerships

Not every vendor has to go it alone on Seller Central. In fact, there are a few models you can consider for your Amazon future, and the right choice depends on your company’s capabilities and priorities. Broadly, the paths are: (A) manage your own Seller Central account, (B) work with an exclusive third-party distributor or agency that runs the Seller Central side for you, or (C) a hybrid approach combining elements of 1P and 3P. Let’s break down these options:

1. Becoming a 3P Seller Yourself (DIY): This is the route we’ve mostly discussed so far – you, the brand, create a Seller Central account and sell your products directly to consumers on Amazon. The benefit is maximum control. You set the prices, you control the inventory, and you own the customer experience (to the extent Amazon allows). You also get direct access to all of Amazon’s brand tools and data. Many brands find this empowering. Alexandra Carmody pointed out that brands sometimes grow quicker on 3P because they can react faster to market changes, adjust pricing, and tell their brand story more fully. 
   
   Indeed, as a 3P seller, you can utilise A+ Content, Brand Videos, Amazon Live, etc., to a greater degree than some vendor setups. However, the DIY path comes with the operational burden we detailed above – it’s like launching a new retail channel in your company. You’ll need to invest in the right people or partners (internal training or hiring, or leverage your agency) to handle it. For many Amazon agencies, this is where you step up as a critical partner, taking on day-to-day Amazon account management for clients transitioning off Vendor Central. The DIY seller route is ideal if maintaining margin and control is top priority and if you’re willing to build the infrastructure (human and technical) to support it.
   
   
2. Partnering with a 3P Seller/Distributor: Another common strategy is to appoint a single third-party seller – which could be an established Amazon distributor or even your agency if it offers this service – to sell your products on Amazon 3P. In essence, you would sell your inventory to that partner (much like you did to Amazon retail, but now it’s a third-party), and they handle the actual selling on Amazon. Companies like Pattern, Spreetail, et al. operate on this model, as do some smaller niche distributors. 
   
   The advantages are clear: you offload the complexity of running a Seller Central account. The partner handles inventory planning, FBA logistics, customer service, and all the rest. They also often take on responsibilities for Amazon content optimisation and advertising, as that directly impacts their sales performance. This can be a fast way to transition – the partner likely already has a seasoned Amazon seller account (with high trust, reviews, etc.), so your products can be live under their seller name quickly and smoothly. It’s almost like swapping Amazon Retail for “Distributor X Retail.” The potential downsides include reduced control and a cut of margin given to the partner. You’ll want a tight distribution agreement that clearly defines pricing strategy, branding, and stock commitments. 
   
   One critical point is price control: ensure your distributor partner abides by MAP and doesn’t engage in price erosion to chase volume. Also, clarify how marketing costs will be handled – are they investing in ads, and how is that funded? Many brands negotiate a retail price or margin that the distributor must uphold, and the distributor makes their profit on an agreed spread. Additionally, consider the exit strategy: if down the line you decide to take back 3P control, what are the terms for ending the partnership? All that said, having a trusted partner manage 3P can be a lifesaver for vendors who lack e-commerce infrastructure or who are in a time crunch to keep products available on Amazon.
   
   
3. Hybrid 1P/3P Models: Depending on what Amazon allows and your specific situation, a hybrid model can sometimes be the best of both worlds. For example, if Amazon hasn’t completely terminated your vendor relationship yet, you might propose (or quietly implement) a split where certain products remain 1P and others move to 3P. Amazon, for instance, might keep buying your top 5 SKUs (if they’re high volume) but not the rest – so you could sell the remainder via 3P. Or vice versa: perhaps you offer new products on 3P to launch quickly and test demand, while continuing to supply core items through Vendor Central as long as possible. We’ve seen some brands negotiate to stay as a vendor for a subset of their catalogue that meets the profitability criteria, essentially trimming the fat. 
   
   If you go this route, coordination is key: you may need to work with your vendor manager to avoid channel conflict. Amazon typically frowns on the same ASIN being sold both 1P and 3P (it can cause listing suppression or buy box suppression if prices don’t align). But splitting by SKU is feasible. Another hybrid approach Alexandra mentioned is enrolling in specialised programs like Amazon 3P Premium Beauty (if you’re in the Beauty category) – this is a gated 3P program where Amazon has a closer relationship with brands, somewhat akin to vendor but without Amazon owning the stock. It offers a kind of account management and brand protection hybrid. Not everyone will qualify, but it’s worth exploring for premium brands. 
   
   Overall, hybrid models can offer a transition phase that eases you into 3P while keeping some stability on 1P, or allows you to leverage Amazon’s strengths on certain items and your own control on others. Just ensure you have clarity on which team (internal or partner) is handling which segment, and keep pricing consistent to avoid Amazon price-match headaches.

Key Considerations for Partnerships: If you do decide to work with a distributor or have an agency run your 3P account, there are a few things to nail down upfront:

• Brand Registry Access: Typically, you’ll want to keep ownership of Brand Registry (since it ties to your trademark), but you can add your 3P partner as an authorised user or “brand representative” so they can manage content. Amazon now offers Brand Registry user roles and Seller Central sub-accounts with permissions, so you can strike a balance. For instance, you can grant an agency user access to create A+ content and manage ads, without giving them full rights to financials. 
  
  Some large distributors insist on controlling Brand Registry to simplify things, but be cautious with that – handing over full control of your brand on Amazon is a big step. A compromise many make is to retain the registry admin and add the partner’s account with limited permissions (Seller Central even has a feature called “Seller Account Linking” for brand owners to link with partners without sharing everything).
  
  
• Pricing and Inventory Terms: As noted, map out exactly how pricing will be set. Usually, you, as the manufacturer, will sell the product to the partner at a set price, and they then have an MSRP or MAP to follow on Amazon. Also, decide how often and how much inventory they will purchase – is it on consignment, or will they buy upfront? Will they hold stock or use a dropship model to FBA? The smoother this supply chain, the less risk of stockouts on Amazon. In essence, treat it like a true wholesale relationship with clear service-level agreements (SLAs) for keeping Amazon stocked.
  
  
• Exit Clauses and Buyback: If the partnership doesn’t work out, you don’t want to be stuck or have your Amazon presence held hostage. Include clauses that allow you to buy back inventory or have the listings transferred (if possible) after termination. While Amazon doesn’t allow “transferring” listings per se (since they’re public), you can coordinate so that the partner sells through remaining stock and then you list yourself, etc., to make it seamless.
  
  
• Communication: Set up regular business reviews just as you would with Amazon vendor managers. The partner should provide you with reporting on sales, advertising, and any issues, ideally weekly or at least monthly. You want transparency into how your brand is being represented. After all, it’s still your name on the box – customers often don’t know or care who the seller is, they just see your brand.
  
  

Many brands have thrived with a trusted Amazon distribution partner, especially when that partner essentially acts as an extension of the brand. For agencies, if you have the capability and capital, acting as the 3P seller for your client is another service avenue (though it has its own risks and rewards). The main point is: you’re not limited to a single approach. Evaluate your internal strengths – if you have e-commerce expertise in-house, going direct might be best. If not, a partner can fill that gap quickly. Some brands even start with a partner to handle the immediate transition, and then after a year of learning, launch their own Seller Central account and phase out the middleman. Keep an open dialogue with your clients (if you’re an agency) or your team (if you’re the brand) about these possibilities.

Now, whichever path you choose, there are some common pitfalls to be aware of in this transition period. Let’s highlight those so you can avoid the banana peels others have slipped on.

Avoiding the Pitfalls: Mistakes Vendors Often Make in Transition

Shifting from Vendor Central to another model is a significant change, and it’s easy to make missteps amid the rush. Here are some of the biggest mistakes (or “banana skins”) that vendors should avoid, as identified by Alexandra Carmody and our own observations working with brands:

• Overstuffing FBA with Inventory: Excited (or fearful) about the switch, some brands send massive amounts of stock to Amazon FBA right away, thinking they’ll mimic Amazon’s previous in-stock levels. This often leads to excess inventory fees and headaches. Remember, as a 3P seller, you pay storage for every unit sitting in Amazon’s warehouse. It’s not like Vendor Central, where Amazon owned the inventory and had to figure out how to sell it. If you send in, say, 6 months of stock and sales don’t match that pace, you’ll incur long-term storage fees after 90 days and 180 days, which can erode your margins. 
  
  Solution: Start with a conservative inventory level (perhaps 4-8 weeks of stock) and replenish frequently. Use Amazon’s restock recommendations as a guide, but apply your own judgment. And monitor your sell-through rate closely. It’s better to restock a bit more often than to warehouse a mountain of product in FBA that isn’t moving. In short, don’t turn FBA into your new 3PL; treat it as a just-in-time distribution node.
  
  
• Underestimating the 3P Learning Curve: Some vendors assume that selling on Seller Central will be plug-and-play – that they can just list their items and watch sales roll in as before. This overconfidence can be dangerous. Seller Central has its own rules, metrics, and quirks. If you don’t invest time in learning (or engaging experts), you risk account health issues or lost sales. For example, did you know your Order Defect Rate needs to stay below 1% to avoid suspension? Or that you should set up automated email responses to buyer messages to keep response time under 24 hours? Or that search keywords work differently for 3P listings (you have backend keyword fields to fill)? There’s a host of small details. 
  
  Solution: Dedicate time to educate yourself/your team on Seller Central policies and best practices. Amazon’s Seller University videos are a free starting point. Join Amazon seller forums or groups where transitioning vendors share tips. If you work with an agency, ensure they are actively guiding you through the changes. In essence, respect the craft of marketplace management – it’s not just “ship product and forget.” Avoid the mistake of thinking you can be hands-off; even with FBA, vigilance is required to keep your seller account in good standing.
  
  
• Ignoring Brand Presentation and Content: Some long-time vendors may have left their product detail pages on autopilot, with minimal content updates or mediocre images, relying on Amazon’s merchandising. In Seller Central, you have full control (and responsibility) for how your brand appears. Overlooking this is a missed opportunity at best, and a conversion killer at worst. 
  
  Solution: Use the transition as a chance to refresh your Amazon content. Leverage that Brand Registry we discussed: upload enhanced A+ Content, ensure your images are high resolution and informative, rewrite titles and bullets with SEO in mind (using relevant Amazon search keywords that customers are using post-2024), and set up a Storefront that tells your brand story. This not only improves the shopper experience but also can boost your sales post-transition. 
  
  Many brands actually increase their conversion rates when they optimise content – something they might not have prioritised under vendor. Also, pay attention to customer reviews and Q&A on your listings. Step in to answer questions promptly (as the seller, you can provide official answers) and address negative reviews via product improvements or by commenting if appropriate. Showing that active brand presence can maintain consumer trust through the changeover.
  
  
• Neglecting Unauthorised Sellers and Price Erosion: In the vendor days, Amazon’s policy and 1P dominance often kept other sellers off your listings (and if they were on, Amazon usually won the buy box due to price). Once you step into 3P, you may find other sellers trying to piggyback on your ASINs – maybe diverting stock from distributors or grey market. If they undercut your price, you could lose the buy box or have to lower your price, hurting margins. 
  
  Solution: Tighten up your distribution agreements as mentioned earlier. Explicitly prohibit reselling on Amazon without permission. If you identify unauthorised sellers, use Amazon’s tools: file Brand Registry violations for IP infringement if they’re not sourcing legitimately, or pursue distributor enforcement offline. In some cases, you can apply for Amazon’s Transparency program (using serialised codes to ensure only authentic units sell) or even Brand Gating (Amazon will sometimes gate a brand to only allow authorised sellers, though this usually requires a track record of issues and Amazon’s discretion). The main thing is, don’t adopt a “set and forget” mindset – monitor your listings for any strange sellers popping up. It’s much easier to stop problems early than after someone has flooded the buy box with cheap stock.
  
  
• Losing Sight of Amazon as a Priority Channel: After a rough breakup with Vendor Central, some brands emotionally distance themselves from Amazon – focusing more on other retailers or D2C and treating Amazon as an afterthought. This is a mistake, given Amazon’s outsized role in e-commerce. As Alexandra put it, you need to keep Amazon either the #1 or #2 priority in your omnichannel strategy. If you divert attention and inventory elsewhere out of frustration, you’ll likely see declines in Amazon sales that hurt your overall business. 
  
  Solution: Stay committed to Amazon even if the model has changed. In fact, leverage your newfound flexibility as a seller to potentially expand Amazon sales: launch that new variation that Amazon as a vendor never onboarded, or test a higher price that maintains margin, or bundle slow sellers with winners to move more volume. Often, being a seller unlocks creativity that was stifled in the vendor setup. Keep Amazon on your weekly agenda, continue to analyse its performance, and set targets for growth. It’s still the same huge customer base – you’re just reaching them through a different mechanism. Don’t let your Amazon business wither due to a lack of focus during or after the transition.
  
  
• Panicking and Making Hasty Moves: Finally, a meta-mistake to avoid is sheer panic. The initial shock of receiving an Amazon termination notice can cause brands to make knee-jerk decisions – like signing a bad deal with a random reseller because they promised quick help, or slashing prices to juice short-term sales, or overloading on ads without strategy. While urgency is warranted, keep a clear head and follow a plan (such as the one this article lays out). 
  
  Solution: Take a breath, consult with experts (agencies, peers, network contacts who have been through it), and then execute your plan methodically. If something isn’t working – say your first FBA shipment got split to five warehouses and caused delays – don’t freak out; troubleshoot it. This transition is a marathon, not a sprint. A level-headed approach will yield far better results than a frenzy. As Paul Sonneveld noted in the webinar, many vendors feeling “a high degree of stress” can find clarity by focusing on what they can control (their next steps) rather than what they can’t (Amazon’s decision). And remember, Amazon wants you to succeed on 3P if you’re moving there – they still make money from your sales, just in different ways – so the system isn’t against you, it’s just a new system to learn.
  
  

By avoiding these pitfalls, you’ll save yourself a lot of wasted time and money in the transition process. Every challenge has been overcome by someone before – and often those lessons are the difference between floundering and flourishing in the new setup. Now, with the do’s and don’ts covered, let’s look forward. How can vendors (and the agencies supporting them) future-proof their Amazon strategy so that they’re less vulnerable to sudden changes? In the concluding section, we’ll outline some forward-looking best practices.

Future-Proofing Your Amazon Strategy for Long-Term Success

If there’s one constant with Amazon, it’s change. Today it’s vendor account closures; tomorrow it might be new fee structures or algorithm updates. Instead of fearing the next change, savvy Amazon professionals plan for resilience. Here are some tips to future-proof your Amazon relationship and insulate your business from shocks:

• Embrace Agility – Be Willing to Evolve: The brands that survive and thrive on Amazon are those that continuously adapt. Whether it’s shifting from 1P to 3P, adopting a hybrid 1P/3P strategy, or even pivoting to entirely new Amazon programs (like enrolling in Direct Fulfillment, Subscribe & Save, etc.), be open to evolution. Make it part of your company culture that Amazon requires flexibility. Conduct quarterly or biannual strategy reviews specifically for Amazon: assess what’s working, what Amazon is changing, and how you can adjust. For agencies, build contingency planning into your client playbooks – so when Amazon tweaks something, you have Plan A, B, and C ready to discuss. This proactive mindset means you’ll never be caught completely flat-footed.
  
  
• Invest in Data and Analytics: To navigate Amazon’s future, you need a strong compass – and that comes from data. Analytics tools (like MerchantSpring’s platform for agencies and vendors) can give you visibility into your performance trends, profitability, and operational metrics across both Vendor and Seller channels. For example, tracking your stock rates, fill rates, and lead times in a dashboard can alert you to potential supply issues before Amazon flags them. 
  
  Monitoring ASIN-level profitability can show which products might be at risk of unprofitability under Amazon’s eye (so you can adjust costs or strategy). Post-transition, analysing your sell-through and advertising ROI on 3P will help optimise the new model. Essentially, use data to identify problems early – before they escalate into account-threatening issues. Additionally, keep an eye on broader market data: if Amazon’s overall strategy in your category is shifting (say, they start vendor negotiations pushing for 3P, or a new competitor emerges), you’ll catch it via sales trends and can react. In short, leverage analytics to stay one step ahead.
  
  
• Diversify Your Channel Strategy (Intelligently): “Don’t put all your eggs in one basket” is a cliché, but in the context of Amazon, it has nuance. Amazon is likely a huge chunk of your e-commerce revenue (for many brands, 50% or more). You absolutely should cultivate other channels – your own D2C site, other marketplaces (Walmart, eBay, etc.), and brick-and-mortar retail if applicable – both for growth and as a fallback. However, be careful not to neglect Amazon or treat it as interchangeable with others. It requires special strategies and daily attention that other channels might not. 
  
  Diversification is good, but fragmentation is not. A future-proof plan allocates resources to grow new channels while maintaining excellence on Amazon. One concrete tip: If Amazon is, say, 60% of your sales now, set a goal to make it, for example, 40% in 2 years by growing others – not by shrinking Amazon, but by expanding the pie elsewhere. That way, Amazon’s changes have relatively less impact on your total business. It’s about balance.
  
  
• Build Direct Customer Relationships Off Amazon: Amazon famously keeps customer data to itself. As a vendor, you had virtually no access to end customers; as a seller, you get a bit more (you see addresses and can use the Buyer-Seller Messaging in limited ways, plus Brand Referral Bonus attribution). To future-proof, try to capture your Amazon customer interest outside of Amazon where possible. Insert marketing materials in your product packaging to follow your brand on social or visit your website for an extended warranty – anything that can legally and gently draw an Amazon buyer into your own ecosystem. 
  
  Build up your social media followers, email list, and other direct marketing channels. Why is this future-proofing? Because if Amazon makes a move that hurts you, having a loyal customer base elsewhere means you can still reach them with or without Amazon. Some brands run loyalty programs that span Amazon and their D2C, giving users a reason to register online after an Amazon purchase (e.g. register for a 1-year warranty and get a coupon). Stay within Amazon’s communication rules (no outright marketing to Amazon customers that violates terms), but be creative in how you can add value to the customer beyond Amazon. Over time, this reduces sole dependency on Amazon’s audience.
  
  
• Stay Educated and Connected: The Amazon industry is dynamic. Policies can change with little notice, and best practices today might be outdated next year. Make a habit of staying informed: follow reputable Amazon news sources, attend webinars (like Marketplace Masters), participate in industry conferences or LinkedIn groups where Amazon changes are discussed. Networking with other Amazon vendors and sellers can be invaluable; many insights in this article come from the collective sharing of experiences. 
  
  By staying plugged in, you might catch wind of the next major shift (for example, if Amazon were to raise the vendor threshold to $20M in the future, you might hear rumours or see patterns early). As an agency, being on the cutting edge of Amazon knowledge is a key value to provide your clients – you become the early warning system and strategist for them. Internally, consider “fire drills” – e.g., “If Amazon were to do X, what would we do?” scenarios – so your team can react calmly under real pressure.
  
  
• Cultivate Amazon Relationships (Where Possible): Although Amazon is moving toward less human interaction for smaller vendors, if you do have any contacts – use them. The Vendor Manager you spoke to once a year, the Category Leader you met at a trade show, even an Amazon Ads account rep – keep those lines warm. Sometimes having a person to reach out to can get you crucial information or a slight advantage. 
  
  For instance, if Amazon ever revisits inviting some brands back to vendor or launching a new program, they often ping those they know. We’ve seen cases where brands that maintained friendly relations got soft-landed into pilot programs to help them out. It’s not guaranteed and you can’t solely rely on it, but it doesn’t hurt to be on Amazon personnel’s radar in a positive way. Just remember to be professional and understanding – Amazon staff are often just messengers of corporate decisions. Thank them for any help they provide; don’t burn bridges even if you’re upset with the company policy.
  
  

By implementing these forward-looking strategies, you transform your approach from reactive to proactive resilience. The vendor account closures, while painful, can ultimately make your business stronger by forcing you to diversify skills and channels. Many brands emerge from this transition more nimble and less constrained, which is a silver lining. For agencies, helping clients through such transitions cements your role as a trusted partner and sets you up with the expertise to handle whatever Amazon does next.

Conclusion & Call to Action

Amazon’s shake-up of the Vendor Central program has been a jarring experience for many vendors – but it doesn’t have to be a fatal blow to your Amazon business. With the right strategy, Amazon vendors can not only survive this transition but come out stronger on the other side. The key takeaways from our deep dive with Alexandra Carmody: stay calm, get informed, and take deliberate action. Whether it’s shoring up your vendor performance to retain your account or smoothly pivoting to a Seller Central or hybrid model, you now have a playbook to navigate the change. Remember, the underlying demand for your products on Amazon hasn’t vanished – it’s all about adjusting how you supply that demand.

As Amazon agency professionals, these times are an opportunity to demonstrate value. Your guidance can help clients avoid panic, implement best practices, and seize the upside of new models (like greater control and potentially better margins in 3P). The conversation with Alexandra was a reminder that even in the face of Amazon’s curveballs, a clear-eyed strategy wins the day. In her words:

“Brands should take a beat – there are options. Once you get over the initial shock, you can find the path that’s right for your business.”

By reframing the situation as a chance to build resilience and agility, you set the stage for long-term growth.

Next Steps – Your Action Plan: If you found these insights useful, be sure to watch the full webinar on-demand in our Marketplace Masters video library, where Paul and Alexandra delve even deeper into vendor transition strategies and answer live questions from the audience. It’s a must-watch for anyone managing an Amazon brand in this climate.

Finally, if you need tailored support to future-proof your Amazon operations, we’re here to help. MerchantSpring’s analytics platform is designed for agencies and brands navigating complex marketplace challenges – whether Vendor or Seller. It provides the real-time data and reporting you need to make smart decisions (and it’s already helping many teams track the very KPIs we discussed, like in-stock rates and profitability). Don’t let data blind spots or manual work hold you back. Book a demo with MerchantSpring to see how our tools can empower your team to thrive amid Amazon’s changes. We’ll show you how to maintain visibility over your sales and inventory across channels and keep your clients (or your own brand) a step ahead in the Amazon game.

Stay Connected: We regularly publish content and host discussions on the latest Amazon strategies. Subscribe to our newsletter and follow the MerchantSpring blog for more thought leadership pieces like this. And if you have specific questions or topics you’d like us to cover in upcoming Marketplace Masters episodes, drop us a line – we love hearing from the community of Amazon professionals and tailoring content to what you care about.

Change is never easy, but with preparation and the right partners, you can turn an Amazon curveball into a new avenue for success. Here’s to thriving through change and mastering the marketplace! 🚀