1P vs 3P marketplace models: what's the difference and which one fits your brand?

In a 1P (first-party) model, a retailer or partner buys your product and sells it to the shopper as the seller of record; you act as a wholesale supplier. In a 3P (third-party) model, you sell directly to shoppers through your own seller account, keeping ownership of the inventory, control of pricing and the operational responsibility. Neither is better in absolute terms: 3P gives more control and a larger share of the retail price, while 1P reduces operational load and risk.

What is the 1P model?

"First-party" means the entity selling to the end customer is the marketplace itself or a partner that has bought the inventory from the brand. On Amazon, for example, when a product is "sold by Amazon," the brand sold that inventory to Amazon as a vendor. The same logic applies when a specialized distributor buys the product and sells it under its own seller account.

In practice, the brand:

• Sells its product at a wholesale price, usually through purchase orders.
• Transfers ownership of the inventory to the buyer.
• Does not manage the end shopper's payments, taxes on the retail sale or customer service in the destination market.
• Has less say over the final retail price, which the seller of record sets.

What is the 3P model?

"Third-party" means the brand (or a distributor representing it) is an independent seller on the marketplace. It creates its own listings, sets prices, manages advertising and decides how fulfillment works: with its own logistics or with the marketplace's fulfillment service, where one exists.

In practice, the brand:

• Keeps ownership of the inventory until the shopper buys it.
• Sets the retail price and runs promotions.
• Receives the sale proceeds minus marketplace fees, logistics and advertising.
• Is responsible for the account's performance: stock, reviews, metrics, policies and customer service.

If you are new to these platforms, start with our guide on what a marketplace is and how it works.

What are the key differences between 1P and 3P?

These are the dimensions that usually decide the choice:

• Control: in 3P you control the listing, price, promotions and brand presentation. In 1P, the seller of record makes many of those decisions, although the brand can still influence content and positioning.
• Inventory ownership: in 3P the inventory stays yours until it is sold, along with the risk of unsold stock. In 1P, ownership passes to the buyer when the order is fulfilled.
• Pricing: in 3P you set the retail price. In 1P you negotiate a wholesale price, and the seller of record defines the final price.
• Margins: 3P usually leaves a larger share of the retail price with the brand, but you also pay fees, logistics, advertising and operating costs. 1P typically gives a lower margin per unit in exchange for transferring those costs and risks. Always compare the net result per unit.
• Operational load: 3P requires a team (or partner) for listings, advertising, inventory, metrics and customer service. 1P concentrates the brand's work on supplying product.
• Risk: in 3P the brand assumes inventory, currency, compliance and account health risks. In 1P, many of those risks move to the seller of record.
• Cash flow: in 3P you get paid as you sell, after the marketplace's payout cycle. In 1P you get paid according to the purchase order's commercial terms.

When does the 1P model fit best?

1P usually makes sense when:

• You are entering a market where taxes, import requirements, payments or local registrations make selling directly complex.
• You do not have, and do not want to build, a team to operate marketplaces day to day.
• You prefer predictable revenue through purchase orders over managing retail sales.
• You want to test a new country without setting up local operations first.

In cross-border commerce, 1P is especially useful because the seller of record takes on the hardest part of selling in another country: tax and customs compliance, local payments and last-mile logistics. Read more in our guide on the seller of record in Latin America.

When does the 3P model fit best?

3P is usually the better option when:

• Brand control and how your product is presented are a priority.
• You want to define your own pricing and promotions strategy.
• You are willing to invest in advertising and keep inventory in the destination market.
• You want direct access to sales, traffic and customer data to make decisions.

The main challenge of 3P is operational: running an account well on Amazon, Walmart or Mercado Libre requires daily work on listings, campaigns, pricing, stock and metrics. That is why many brands choose 3P with an operating partner instead of building the whole team in-house.

Can you combine 1P and 3P?

Yes, and it is common. A brand can sell 3P in its most strategic market and 1P in countries where it is not worth taking on local complexity. It can also split by product line: hero products under 3P for maximum control, and the long tail under 1P. The essential part is coordinating prices, listings and inventory so both channels do not compete against each other or create inconsistent catalogs.

How does LAP Global offer both models?

With more than 10 years in cross-border commerce across the Americas, LAP Global manages more than $30M in annual GMV and over 25K SKUs in 8+ active countries, on Amazon, Mercado Libre, Walmart, Falabella, Ripley and Shopify. We offer both models:

• 3P ("You sell"): the brand keeps ownership of its inventory and its brand, and LAP operates its marketplaces end-to-end: account management, listings and SEO, advertising, pricing, logistics coordination and compliance. The brand does not need its own US legal entity.
• 1P ("We sell"): LAP acts as seller of record and handles taxes, compliance, payments and logistics. The supplier only provides the product.

In both models we combine AI agents operating 24/7 with human Key Account Managers, a centralized real-time dashboard and integrations with marketplaces, couriers and fulfillment centers. The average launch takes 45 days. You can see the details in our 1P and 3P models and in how it works. If you are a US brand looking at Latin America, also read how to sell on Mercado Libre from the US.

Not sure which model fits your brand? Write to us at comercial@lapglobal.io and we will review your products, target markets and goals to recommend the best route.