Why Many Brands Choose Not to Own Their Amazon Inventory

For brands selling on Amazon, the decision of whether to own their inventory can be one of the most crucial choices they make. While the allure of higher margins through direct selling on Seller Central (3P) is compelling, many established brands ultimately decide against taking on inventory ownership - and for good reasons.

The financial considerations often top the list. Traditional banking relationships are built around lending against purchase orders and accounts receivable, not inventory stored in Amazon's fulfillment centers. CFOs and finance teams frequently express discomfort with having significant assets stored in facilities they can't physically audit or control. This fundamental shift in asset management can create friction with existing financial structures and relationships.

The operational complexity of managing inventory across Amazon's vast network of fulfillment centers presents another significant hurdle. When transitioning from Vendor Central (1P), where Amazon handles purchasing and distribution, brands suddenly find themselves responsible for forecasting, logistics workflows, and inventory monitoring across 30+ facilities. This dramatic shift requires new systems, processes, and expertise - all of which need to be implemented quickly, especially if Amazon has issued a 60-day termination notice.

Risk management also plays a crucial role in this decision. Without Amazon's regular purchase orders providing predictability, brands must take on all inventory risks and responsibilities themselves. Mistakes in inventory management can be costly, whether through stockouts that hurt sales rank and visibility or excess inventory that ties up capital and incurs storage fees.

Fortunately, brands don't have to choose between staying in an unfavorable 1P relationship and taking on all these challenges themselves. Partners like AMZ Atlas offer an alternative solution by acting as exclusive resellers on Seller Central. These partners purchase inventory directly from brands and assume all the risks and responsibilities of inventory ownership while still allowing brands to maintain control over pricing and brand presence. This hybrid approach enables brands to capture many of the benefits of 3P selling without the operational complexity and financial risks of direct inventory ownership.

As AMZ Atlas CEO Corey Thomas advises, "If you're uncomfortable owning inventory in a facility that you can't control, don't even bother setting up an account - instead look for a partner who will sell on your behalf." This pragmatic approach has helped many brands successfully navigate the transition away from Vendor Central while maintaining their operational comfort zone and financial stability.