Breaking Free from Vendor Dependency: Why Established Brands Should Adopt the Amazon Hybrid Strategy and Broker Model
TL;DR for E-Commerce Decision Makers: Amazon controls the Vendor model (1P) primarily through the profitability metric Net PPM. A complete switch to the Seller model (3P) is being evaluated by many manufacturers as a strategic way out, but in practice it comes with structural hurdles: Amazon often regulates channel switching for relevant brands through the SBSAS policy (Standards for Brands), while manufacturers with classic trade structures hit their limits with granular B2C requirements (KYC compliance, FBM logistics KPIs, transaction accounting). A strategically sound solution to regain price sovereignty and flexibly manage your assortment is the Hybrid Strategy. Here, an Amazon Broker based on the open-book principle handles the operational 3P processing, supported by a highly automated tech setup. However, the success of this model requires that the manufacturer has its internal ERP landscape and sales control in check.
By Stephan Bruns
E-commerce in 2026 requires a strategically sober view of sales channels. The Vendor model on Amazon remains a highly efficient way for many brand manufacturers to move volumes and bring established standard products ("cash cows") to market. However, anyone who manages their entire assortment exclusively through Vendor Central completely subordinates price sovereignty, assortment design, and margin control to the platform's mechanisms.
Amazon acts as a marketplace that consistently optimizes its own purchasing behavior toward Net PPM (Net Pure Product Margin). If this margin—often due to the platform's own price matching of market prices—falls below an internal profitability threshold, the algorithm reacts mechanically: The product is classified as "CRAP" (Can't Realize A Profit). The consequences are drastic: missing purchase orders, loss of visibility through withdrawal of the BuyBox, and ultimately delisting of the item.
Canceling the Amazon Vendor Service (AVS) in such phases purely out of cost pressure often falls short strategically. The AVS is in many cases the necessary interface to coordinate operational processes with the Vendor Manager at all. If this support function falls away, account control becomes noticeably more difficult and the brand risks falling into an uncontrolled vacuum. A structural, not just reactive, solution is needed.
Annual Vendor Negotiations (AVNs) and Strategic Use of Negotiation Leverage
A professional approach to Amazon requires acknowledging the fact that the interests of manufacturer and platform do not necessarily align. Products in the system are primarily ASINs that must deliver predefined performance. The historical significance of your brand or long-standing business relationships play no role for the algorithm.
In Annual Vendor Negotiations (AVNs), striving for absolute harmony is therefore rarely goal-oriented. If Net PPM falls, Amazon often tries to compensate through higher backend conditions (co-op, MDF, return flat rates), while legitimate manufacturer price increases (Cost Price Increases, CPIs) are rigorously blocked system-side. Amazon uses a negotiation framework where tensions are a calculated part of condition finding. Manufacturers who take their margin goals seriously must be willing to endure this friction in discussions and use it tactically. Hoping for the Vendor Manager's accommodation is a significant margin risk. More on the challenges of the Vendor model and how CRAP-outs occur can be found in our articles.
Successful established brands go into these negotiations well-prepared and use legitimate leverage to strengthen their position:
Enforce delivery stops: They consistently stop deliveries when agreed deadlines for price increases (CPI deadlines) have expired or backend conditions are unilaterally dictated.
Freeze marketing budgets: They critically evaluate advertising budgets and reduce spending on unprofitable campaigns (especially the hard-to-control auto-marketing) during stalled negotiations.
Assortment control: They carefully examine which new products go directly into the 1P program and which are strategically held back initially to avoid exposing them to price pressure immediately.
Withdraw exclusivity: They withdraw Amazon's access to exclusive selections when the consideration (margin stability, visibility) is not provided.
The Switch to 3P: Between Policy Pressure and Strategic Dual-Track Approach
When annual negotiations stagnate and margin pressure increases, many companies internally discuss a complete exit from 1P and a radical switch to Seller Central (3P). This step is strategically understandable but requires precise knowledge of platform-internal regulations in practice.
There are reports from the US market where Amazon systemically blocks the complete switch to 3P for high-revenue brands. An example: An established US brand with over $10 million in revenue decided on a complete switch from Vendor to Seller Central. Since Amazon classified the company as a "relevant brand," the internal US policy SBSAS (Standards for Brands Selling in the Amazon Store) kicked in shortly after the switch. Direct sales through the new 3P account were massively restricted to force the brand back to the negotiating table in the 1P program.
Amazon's motive behind this is simple: If a brand's products are in high demand in a category, Amazon wants to own the inventory itself (1P) to be able to uncompromisingly dictate the end-customer price in the marketplace.
However, that this approach is not an unshakeable law is shown by a counterexample from our own agency practice. We manage another US brand that generates well over €10 million in revenue in Europe and is much larger in the USA. This brand is a pure seller. A few years ago, it also came under massive pressure to offer its products in the Vendor program. However, the company never gave in to this pressure, maintained its position, and today scales extremely successfully as a pure 3P player. It is therefore quite possible to maintain your independence.
The German Reality: The Manufacturer Policy on Product Availability
What about the DACH region? Here too, there is a counterpart to the US policies that decision-makers must know: The official "Manufacturer Policy on Product Availability", which is still anchored in German Seller Central.
The core sentence of this policy reads: "If you as a manufacturer of a product also sell it through other retailers or distribution partners, you must give Amazon the opportunity to source the product for resale at competitive terms."
Amazon thus formulates a clear claim: If you as a brand maintain a classic B2B distribution network (wholesale, specialty trade), Amazon demands the right to purchase the goods as a 1P vendor. Only manufacturers who operate exclusively Direct-to-Consumer (D2C) are explicitly exempt from this policy.
In practice in recent years, Amazon Germany has hardly used this clause actively as leverage to deny brands 3P access—not least due to strict oversight by European competition law.
Dancing on Both Weddings: The Official "Safe Zones" for 3P
Although forcing 1P is less frequently enforced in Europe, an abrupt cut remains risky. You lose strategic access to your Vendor Manager, risk algorithmic friction losses, and often fight for months against Amazon's own 1P remaining inventory, which blocks the BuyBox in your new Seller account.
The key lies in consistent assortment separation (Assortment Split)—you strategically dance on both weddings. The established volume products remain in the Vendor program. This secures the baseline and serves Amazon's claim from the manufacturer policy. In parallel, you build an agile counterweight through a Broker account.
The justification for your Broker account vis-Ă -vis Amazon (and the Vendor Manager) lies in maintaining Customer Experience (CX). Amazon explicitly tolerates and welcomes parallel 3P structures when they close gaps left by the 1P model. Specifically, this means you use the Broker account for these four scenarios:
Out-of-Stock (OOS) Backup: If Amazon 1P doesn't reorder your bestsellers or runs out of stock, your Broker account seamlessly catches the demand. You secure your ranking and customers' shopping experience.
Reactivate CRAP items: Products that Amazon delists due to internal unprofitability (Net PPM), you make available again to end customers through the broker—often in intelligently bundled trade multipacks.
Sell rejected assortments: Seasonal items or niche products (long-tail) that your Vendor Manager rejected for 1P find their profitable place in the Broker account.
Test & Learn (Innovations): New product developments without historical data you launch in the 3P model. Here you build reviews and sales history and maintain full price sovereignty in the critical introduction phase.
One point is particularly important to me from my practice: If you develop special "Amazon-only" products or even completely new brand creations that you build exclusively for this platform, these have absolutely no place in the Vendor program. The decisive success factor for exclusive products is unrestricted control over pricing. Anyone who wants to strategically position Amazon-exclusive products cleanly and capture the full margin should always do this through their own Seller or Broker setup.
Distribution Control: The 5-Step Plan for Market Cleanup
Before evaluating alternative Amazon setups, the cause of price decline must be addressed. Amazon typically acts reactively on pricing. The algorithm continuously searches the internet for the cheapest offers for an EAN (Cross-Channel Price Matching). A margin decline on the platform is therefore usually a symptom of an uncontrolled distribution network outside of Amazon.
If wholesalers use their volume discounts (bulk discounts) to resell goods to unauthorized third parties, on other online marketplaces, or directly on Amazon, the market price falls. Amazon follows, the margin collapses, and the CRAP status follows.
The following 5-step plan helps you gradually regain control over your sales channels:
Audit authorized sellers: Record in detail who is allowed to sell, in which regions, and through which channels. Does the current behavior of these partners still meet the criteria of your selective distribution?
Identify unauthorized sellers: Track retailers who offer on and off Amazon without authorization. Analyze their price discounts compared to your MSRP to narrow down the sources.
Analyze incentive structures: Critically examine whether certain on- or off-invoice discounts in trade unintentionally subsidize the gray market. High year-end bonuses often tempt retailers to push goods into the market at a loss in the short term to reach target tiers.
Take targeted contractual measures: Adjust discount structures and link them to qualitative goals. Establish (where legally possible) MAP policies (Minimum Advertised Price) and examine programs like Amazon Transparency to mark each product with a unique code and effectively block counterfeits and unauthorized resellers.
Establish monitoring: Anchor this review as a fixed, quarterly process in your sales control. Distribution control is not a one-time action but an ongoing task.
Operational Challenges for Brand Manufacturers in Seller Central
If a Seller account (often as a parallel setup) is accepted by Amazon, operational implementation follows. Here, the established B2B process landscape of a classic manufacturer collides head-on with the high-frequency, data-driven B2C requirements of Amazon.
Operating your own Seller account is not necessarily error-prone, but it requires resources, software, and know-how that typically must be built up expensively in B2B structures. Three areas prove particularly critical in practice:
- Administrative Compliance (KYC Process)
The registration process (Know Your Customer) in Seller Central is thorough and resembles the verification procedures of financial institutions. Amazon requires complete verification of beneficial owners (UBOs) for shares over 25%. For complex company structures (e.g., international holdings, nested GmbH & Co. KGs), this requires extensive documentation down to the last natural person. In addition, official address proofs of management must be uploaded and a company-issued, reliable credit card must be deposited. If any of these requirements are missing, the account is not verified.
- Logistics Requirements: FBA vs. FBM
Manufacturers face the decision between Amazon logistics and self-fulfillment. Both paths have strict, sanction-backed requirements.
FBA (Fulfillment by Amazon): If you use Amazon's logistics network, this requires preparing goods at the single-unit level. Each product needs specific, scannable barcodes and must comply with GPSR requirements. In addition, inventory management requires precise management. The algorithm monitors your inventory performance index (IPI score). Overstocking triggers sensitive long-term storage fees, while understocking reduces visibility and endangers the BuyBox.
FBM (Self-Fulfillment): Those who want to use their own logistics to utilize existing warehouses are subject to harsh real-time KPIs. The Order Defect Rate (ODR) must remain permanently below 1%, the Valid Tracking Rate (VTR) above 95%. B2B ERPs that transmit tracking data with delays hit their limits here. The late shipment rate (LSR) must also not exceed 4%.
- Financial Accounting Complexity
The switch from few B2B consolidated invoices to Amazon to thousands of B2C individual transactions to end customers requires a fundamental adjustment of IT and financial systems. The biggest risk here is the payout process. Amazon typically pays out net amounts every 14 days, in which various cost types (FBA fees, commissions, advertising costs, returns) are already balanced. Without automated middleware for clean breakdown and accounting of these business transactions, significant manual additional effort and a compliance-relevant tax risk arise in accounting.
The Strategic Option – The Amazon Broker Model
For companies that want or need to keep their cash cows in the 1P model but seek the flexibility of a Seller for new products, bundles, or low-margin items, the Broker model offers a sensible, low-risk hybrid solution.
Instead of building your own B2C infrastructure with high fixed-cost risk, a specialized service provider (broker) like REVOIC handles the complete operational processing of the 3P channel. More about the advantages of the Broker model can be found in our article on Vendor Crisis and Seller Chaos.
The Core Mechanisms of the Model:
Strategic Control: Goods are not sold in the wholesale model but provided on consignment. You retain legal ownership until the end-customer sale. This keeps you in control of pricing, assortment selection, and brand positioning. You escape Amazon's reactive price-matching algorithm.
Operational Outsourcing: The broker acts as the end customer's contractual partner and manages the complete administrative and operational burden: Seller logistics, customer support to Amazon standards, and tax accounting.
The Credit Note Procedure: To solve complex financial accounting, we use a legally secure self-billing procedure. Instead of the manufacturer issuing unclear invoices to the broker, they receive a monthly credit note from the broker (supported by tools like Amainvoice). This shows gross sales minus exactly broken-down platform costs and the broker margin.
Open-Book Transparency: The collaboration is based on complete data transparency. There are no hidden margin markups. The broker's remuneration is through a contractually clearly defined commission on generated net sales.
Asset Building (Exit Option): Unlike classic resellers, the account is built exclusively for your brand. Should the strategic decision be made to operate the Amazon business completely in-house in a few years, you can take over this account for a buyout fee. History, rankings, and customer reviews remain with the company as an asset.
The Strategic CX Safety Net: A Broker account is often easier to justify internally when it is not only positioned as a pure "margin rescue instrument" but as an operational guarantee for Customer Experience (CX). Amazon is obsessed with end-customer experience. If your Vendor account is not deliverable due to algorithm decisions (CRAP) or strict order limits (OOS), CX suffers. Your Broker account functions here as the perfect, officially tolerated safety net by Amazon. You close the gaps that Amazon's 1P supply chain tears, secure your rankings, and transform a defensive dependency into proactive sales control. This also takes the wind out of every Vendor Manager's sails in future AVNs if the 3P setup is criticized: You're simply ensuring that the Amazon customer can always buy.
The Unglossed Reality of Implementation (Your Homework)
A professional broker delivers the infrastructure and know-how to succeed on Amazon. However, the model is not self-running. In our customer projects, we regularly see that success depends significantly on whether manufacturers are willing to do their internal homework. Anyone who ignores the following realities will delay market entry by months:
ERP and Accounting Integration: A broker will technologically build everything to scale sales. However, they depend on your input. Manufacturers often have incredible difficulty preparing their in-house ERP systems so that smooth collaboration is possible. The creation of purchase or consignment invoices must be structured so that they harmonize with the granular transaction data from Seller Central. If the manufacturer uses its own shipping logistics (FBM) on behalf of the broker, ideally every goods issue must be accounted for with a specific invoice. This presents many B2B ERPs with massive technical hurdles that must be solved internally before go-live.
The BuyBox Blockade by Remaining Inventory: A common misconception in management is: "We'll turn on the Broker account now and sales will increase immediately." The reality is different: Steady sales growth requires time; everything must grow organically. A primary reason for this is the transition from Vendor to Seller. Often, massive quantities of remaining inventory (1P stock) still lie at Amazon. As long as Amazon sells these remaining stocks, the platform will typically claim the BuyBox for itself—even if the broker is deliverable.
The Distribution Paradox (3P Competition): The broker will do everything in their power to connect and optimize your brand as best as possible. However, they are powerless if the manufacturer's sales don't have their distribution under control. We see cases where market players (other 3P sellers) permanently undercut the broker. Although the broker should actually receive the best purchase or consignment terms from the manufacturer, gray market retailers offer the goods cheaper. The consequence: The broker doesn't win the BuyBox, sales stagnate.
Manufacturers and brands must critically examine in advance whether they are even capable of positioning their products in the market so that they—and the broker they commission—can scale profitably.
Practice Cases from Different Industries
How the setup proves itself and solves concrete margin problems (provided the homework is done) is shown by anonymized examples from our project business:
FMCG & Food (Logistics Cost Optimization): A manufacturer saw its margin on low-priced individual items in Vendor shrink. In the Seller model, FBA fees for shipping individual pieces would have been unprofitable. Through the Broker account, the assortment architecture was modified: The assortment was switched to multipacks and factory-ready trays. The higher basket value significantly reduced relative logistics costs.
DIY & Tools (Controlled Market Entry): A brand traditionally strong in stationary specialty trade wanted to open up Amazon as a sales channel without risking channel conflicts. Through the REVOIC Broker account, a controlled D2C setup was established. Prices are strictly value-oriented, new products are strategically placed through advertising.
Spare Parts & Accessories (High-Volume Long-Tail): A provider of thousands of spare parts was looking for an efficient solution for its extremely fragmented assortment. Manually maintaining such catalogs is economically unfeasible. Through technological integration with the broker, large product data volumes could be optimized automatically.
Efficiency Through Automation: The Tech Stack
A reliable Broker setup capable of processing tens of thousands of transactions error-free only works on the basis of stable systems. At REVOIC, we base our processes on a proven technology ecosystem:
AMALYTIX: For deep account analysis, performance monitoring, and proactive monitoring of content quality. It enables us to identify ranking changes in real time.
Amainvoice: To exactly meet financial accounting requirements, we rely on 100% automation in invoicing. The data basis enables the credit note procedure and ensures smooth tax processing through DATEV interfaces.
Perpetua & Adference: For targeted control and ROI-based scaling of advertising campaigns, we integrate these established solutions.
System Integration: Our project management and data streams are centralized via API interfaces (Make.com) and our ERP (ClickUp). AI-supported evaluations (Typing Mind) enable us to quickly derive action recommendations from raw data.
Your 10-Step Roadmap to the Hybrid Strategy
If you're considering a hybrid strategy for your company, the following structured steps are recommended:
Data-Driven Assortment Analysis (Identify CX Gaps): Analyze your assortment not only generally by margin but specifically by Amazon's 3P tolerance areas: Which bestsellers are chronically Out-of-Stock (OOS) in Vendor? Which products are at risk of slipping into CRAP status due to Net PPM? Which new products (NPDs) are in the pipeline?
Distribution Audit: Ensure that gray market retailers cannot steal the BuyBox from your broker through price dumping. Inadequate sales control sabotages broker success from day one.
Channel Split According to the "Safe Zone" Principle: Define clearly which core products remain in Vendor (1P) to secure baseline volume and serve Amazon's manufacturer policy (product availability). Assign the Broker account (3P) exactly to the segments that block in 1P: Exclusive Amazon-only brands, clever multipacks of former CRAP items, test launches of innovations, and as FBM backup for your 1P bestsellers.
Contractual Framework Conditions: Evaluate the open-book principle and the details of the consignment and credit note procedure.
Establish ERP Readiness: Clarify internally with your IT and accounting how consignment accounting can be booked in your own ERP system matching the transaction data.
Logistics Decision: Clarify whether goods supply should occur via Amazon (FBA) or more efficiently through your own warehouse (FBM) on behalf of the broker.
Adapt Supply Chain: For FBA use: Define standard repackaging boxes and establish processes for smooth inbound to Amazon logistics centers.
Secure Financial Compliance: Ensure that the processes for monthly credit note creation and DATEV handover are finally coordinated with your accounting.
Retail Readiness: Check whether high-quality content (A+ Premium, images) and a review strategy (Amazon VINE) are ready for launch day.
Expectation Management: Factor in that sales growth in the Broker model must occur organically. Still existing 1P remaining inventory in Amazon warehouses will initially slow BuyBox acquisition and market entry in the Seller model.
Frequent Questions (FAQ) from CEOs
Will Amazon close my Vendor account if I switch? A forced complete exit to 3P is difficult for high-revenue, relevant brands, as Amazon can insist on continuing 1P supply through the SBSAS policy. However, parallel use (Hybrid Strategy) for strategically separated partial assortments is accepted by Amazon in practice.
Why does Amazon suddenly stop orders (CRAP-out)? Amazon optimizes for its own net margin (Net PPM). If the algorithm adjusts the price on Amazon to cheaper offers in the rest of the online market, Amazon's margin falls. If this falls below a defined target value, Amazon classifies the product as unprofitable and automatically stops reorders.
How does the REVOIC Broker differ from a classic reseller? A reseller buys the goods, calculates their own selling price, and builds their account history. The REVOIC Broker acts as a service provider in the consignment model based on the open-book principle. You determine the pricing strategy; we handle the operational work. If needed, the account can later be taken over by the manufacturer for a buyout fee. More details on the Broker model can be found in our detailed article.
Conclusion and Next Step
A Hybrid Strategy is not the perfect solution for every company, but it is one of the most effective strategic options for brand manufacturers in 2026 to reduce dependencies, regain room for maneuver in negotiations, and stabilize price sovereignty.
Using a specialized Broker enables this step without burdening your own company organization with building a complete B2C infrastructure. However, it requires the clear internal commitment of the manufacturer to adapt their ERP systems and get their distribution under control. Further insights into the challenges of the Vendor model and the Seller alternative can be found in our articles.
Want to check which parts of your assortment make the Broker model economically worthwhile? On our Broker Landing Page you'll find not only further operational details but also our detailed explanatory video on the exact setup. Contact us directly there for a free initial consultation, and let us analyze your individual starting situation based on data.
