Amazon Restructures Vendor Central Accounts: The Structural Transformation of the 1P Model

An Announced Change: Amazon Realigns the Vendor Model

Throughout 2024 and the early months of 2025, Amazon has started a significant restructuring of the Vendor Central (1P) program.
Numerous vendors, especially those with medium to low sales volumes, have received official notices of termination of their commercial relationship and an invitation to transition to Seller Central (3P).

This measure is neither episodic nor limited to specific areas: it signifies a strategic realignment of the channel. Amazon is shifting part of its ecosystem from a traditional retail model (direct purchase and resale) to one that is more scalable, transparent, and sustainable, based on performance, automation, and direct brand control.

Why Amazon is Doing This

The reduction of Vendor accounts aligns with precise strategies of efficiency and positioning:

1. Focus on Scale
   The 1P model is designed for large suppliers with stable supply chains, demand forecasting capabilities, and high-volume financial management. Brands of smaller size generate a less efficient cost/revenue ratio for Amazon, particularly in terms of logistics and contractual negotiations.
   
   

2. Rationalization of Retail Processes
   The management of shortages, deductions, and disputes generates operational complexity. Amazon is consolidating the 'core' vendors to reduce these inefficiencies and concentrate resources on more strategic partners.
   
   

3. Growth of the Marketplace Model (3P)
   Today, 3P represents over 60% of Amazon's global GMV. It's a more dynamic model where brands control price, stock, and margin, while Amazon ensures infrastructure and demand.
   The invitation to migrate to Seller Central is thus part of a natural transition toward a decentralized but more performant ecosystem.
   
   
   

Implications for Brands: More Autonomy, More Responsibility

For vendors affected by the change, this transition does not mean 'channel loss,' but rather an evolution of the operational model.
The difference between 1P and 3P translates into new economic and governance principles:

In the medium term, this evolution can enhance profitability for well-structured brands, provided they invest in internal organization, technical know-how, and autonomous operations management.

A Change that Distinguishes Maturity from Dependency

The new scenario is not disadvantageous for brands, but selective.
Amazon is clearly distinguishing between:

• vendors with scale, governance, and retail compliance capability,
  
  

• and brands that benefit more from a controlled direct-to-consumer model via Seller Central.
  
  

By 2025, it is estimated that over 70% of European brands with annual earnings below 5 million on Amazon will operate in 3P mode, often with more predictable performance and more stable margins than the previous retail model.

The Strategic Meaning of 'Rationalization'

Behind the apparent reduction of accounts lies a clear direction:
Amazon is building a more measurable, less retail-centric marketplace where partners are not treated like suppliers but as operators.

For companies, this entails three immediate priorities:

1. Price and ASIN Relation Governance, to maintain stability and consistency during the transition.
   
   

2. Control of the Operational Flow (logistics, fulfillment, reporting), to offset the loss of retail management.
   
   

3. Economic Model Revision, with a focus on ROI, TACOS, and stock rotation instead of contracts and purchase volumes.
   
   
   

What It Means for the Amazon Ecosystem

The shift from Vendor to Seller marks a paradigm change:

• from a 'retail' relationship based on contracts and forecasts,
  
  

• to a 'platform' relationship based on data and performance.
  
  

In other words, Amazon is not closing its doors, but is asking brands to enter with a more mature and structured mindset.
Those who can operate analytically, manage catalog, pricing, and advertising independently, will be favored.
Those who remain anchored to traditional retail logic will be excluded.

In Summary

The downsizing of Vendor Central is not a crisis, but a sign of evolution.
Amazon is aligning its ecosystem to a more scalable, data-driven model focused on brand control.

For companies, the choice is no longer between '1P or 3P,' but between dependency or awareness.
Those who adopt integrated governance — strategy, catalog, advertising, technique — can operate with greater freedom, efficiency, and profit in the world's most competitive marketplace.