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Procter & Gamble’s Amazon strategy isn’t just about products—it’s about building a fortress in 1P. Here’s what their revenue and market share teach us about winning in the world’s biggest marketplace. CONTEXT: With over 65 large brands, Proctor and Gamble (P&G) is the king of household. They've had one of the closest relationships with Amazon, ensuring top category selection of their brands. They do close to $2 billion in revenue on Amazon, making them the largest CPG conglomerate in the Amazon marketplace I've seen. It's often joked about how the goal of Prime and its myriad of benefits is to help Amazon sell diapers. Well, whose diapers are they selling? P&G's Pamper diapers. Here are three things about P&G I find interesting: 1. Brands can thrive with Amazon Vendor. With brands growing on average 11.2% from October into November (hello, Q4 bump?), they're in a good spot. 2. They have A LOT of resellers. On average, their products have 7.1 sellers. Some of these are dropship FBM offers, whereas others are wholesale resellers with FBA trying to fight against the big dog Amazon themselves. 3. Amazon Vendor can be a good partner. To quote someone on a previous 1P/3P debate, "Amazon never loses money on a 3P sale". Amazon can make considerable investments with their vendor partners so Amazon can push away other retailers like Walmart and BestBuy. They want to be the best value across the board, and they can lean into these relationships to make that happen. With nine brands doing over $10m monthly on Amazon, it seems like nothing gets in their way. https://hubs.li/Q0318PZ90
1P's strongest muscle are supply chain initiatives that play into the scalability focus of large CPG and Hardlines brands. 3P cannot compete and is (if anything) a diversification play in those instances. Great insights, Scott Needham!
P&G’s dominance on Amazon is impressive! Their strategy of balancing Vendor and resellers while leveraging strong brand relationships shows how powerful Amazon's 1P model can be. Great insights
Interesting, It’s fascinating to see how they’ve turned Prime into a Pampers powerhouse!
P&G's approach to Amazon is indeed impressive! Their ability to leverage the Vendor model effectively showcases how brands can thrive in a competitive landscape. It's a great example for other sellers on how to navigate the complexities of both 1P and 3P models. P&G's success reinforces the idea that building solid relationships with Amazon can lead to substantial gains.
The price point of most of their products means 3P is not commercially viable. While they may be seeing growth across the board, they are losing market share in many categories with more nimble and innovative competitors. Their investment in content and the customer experience is also sub par, leaving conversions and sales on the table.
What strikes me most is their masterful category control strategy - look at Gillette commanding 60% market share while Charmin and Cascade own 30-40% of their respective categories. This isn't just about product placement - it's sophisticated retail data optimization. Their ability to maintain 7.1 sellers per ASIN while protecting MAP shows exceptional channel management. The real genius? Using 1P's co-op funds to drive category defense while maintaining healthy margins. This is how you turn marketplace presence into marketplace power.
Curious about those 1p margins and fees not gonna lie
Entrepreneur | Investor | Author of The 5 Pillars of Amazon Wholesale | $13M+ sold online, 1,100+ students coached
3moI've sold quite a bit of P&G over the years. There are definitely some 1p listings I wish I could get a piece of.