Two fundamentally different ways to outsource your eCommerce. One buys your product. The other sends you an invoice. Here's why that distinction matters more than you think.
A 2P retail operator buys your inventory and becomes the seller of record — their profit depends on selling your product. An Amazon agency charges you management fees to run your account — they get paid whether your product sells or not. Same goal (grow your Amazon sales), fundamentally different incentive structures.
A 2P (second-party) retail operator purchases your inventory at wholesale, lists it under their own seller account, and becomes the seller of record on Amazon and other marketplaces. They handle everything: catalog management, advertising, pricing, fulfillment coordination, and customer service.
The key distinction: they take on inventory risk. If your product doesn't sell, they eat the cost — not you. This creates a natural alignment that's hard to replicate with fee-based models. For a deeper dive, see our complete guide to the 2P model.
Examples of 2P operators include Neato, Pattern, and Spreetail.
An Amazon agency manages your seller or vendor account on your behalf. You remain the seller of record (or stay on Vendor Central as 1P). The agency handles advertising, content, catalog management, and strategy — but you own the inventory, the account, and the risk.
Agencies typically charge a monthly retainer plus a percentage of ad spend or revenue. Some specialize in specific categories (like Front Row Group in beauty/wellness), while others are generalists.
The agency model works well for brands that want to maintain control and have the internal resources to manage inventory, fulfillment, and account health.
| Dimension | 2P Retail Operator | Amazon Agency |
|---|---|---|
| Who owns inventory? | The 2P partner | Your brand |
| Who is seller of record? | The 2P partner | Your brand |
| Revenue model | Margin on product sold | Monthly retainer + % of spend |
| Inventory risk | Partner takes the risk | Brand takes the risk |
| Incentive alignment | High — profit tied to sell-through | Moderate — paid regardless of sales |
| Operational burden on brand | Low — hand off and focus on product | Medium-High — you still manage logistics |
| Account ownership | Partner's account | Your account |
| Brand control | Shared (contractual guardrails) | High — you approve everything |
| Typical cost structure | Wholesale price negotiation | $5K–$30K/mo + % of ad spend |
| Switching costs | Moderate — transition period needed | Low — you keep your account |
This is the crux of the decision. When an agency charges a monthly fee plus a percentage of your ad spend, their incentive is to manage your account — not necessarily to maximize your profitability. Increasing ad spend increases their revenue, even if the marginal ROAS doesn't justify it.
A 2P operator, by contrast, only makes money when your product actually sells at a healthy margin. They're financially motivated to optimize pricing, minimize waste, and drive real sell-through. If a product isn't working, they feel it directly.
"The question isn't who's better at Amazon. It's whose success depends on your success."
This doesn't mean agencies are bad — it means the incentive structure is different, and brands should understand that difference before signing.
Neither model is universally better. But for CPG brands doing $5M+ that want to scale without adding headcount or operational complexity, the 2P model offers a level of alignment and simplicity that agencies structurally can't match.
The math is simple: brands working with Neato's 2P model see +198% average growth, a 96.3% Buy Box rate, and zero brand declines. Case studies like Wiley Wallaby (+168% YoY), Earth Animal (+204%), Dot's Pretzels (+121%), and illy Coffee (+137%) show what happens when your partner's profit depends on your sell-through.
If you're evaluating specific partners, check our comparison of the top Amazon accelerators, see how Neato compares to Pattern, or dive into the definitive guide to the 2P model. Leaving Vendor Central? Our 1P to 2P transition guide covers the process step by step.
An Amazon agency charges management fees (typically $5K–$30K/month plus a percentage of ad spend) to run your account while you remain the seller of record. A 2P accelerator buys your inventory at wholesale, becomes the seller of record, and profits from sell-through margin. The fundamental difference is who bears the risk — and whose incentives are aligned with your sales performance.
For CPG brands doing $5M+ in revenue, a 2P partner typically delivers better outcomes because the economics of consumable goods reward operational efficiency and volume. You eliminate the agency fee overhead, offload inventory risk, and get a partner who loses money if your product doesn't sell. That said, agencies can be the right choice for brands that need to maintain full account control or are testing Amazon at a small scale.
Agencies typically charge $5K–$30K/month in retainer fees plus 10–15% of ad spend. With a 2P partner, there are no management fees — you sell inventory at wholesale, and the partner manages everything from their margin. For most CPG brands, the total cost of the agency model (fees + internal operational costs) exceeds the margin given up in a 2P arrangement.
Neato is a 2P acceleration partner for CPG brands. We buy your inventory, become seller of record, and grow your brand across Amazon, TikTok Shop, and D2C.
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