While Rithum’s experts broke down key challenges of multichannel selling in our recent The Rise of 3P Commerce: Why Multichannel Selling Is the Future of E-Commerce webinar, it became clear from audience questions that brands and retailers are feeling the pressure. From tighter margins, shifting fulfillment models, and the challenges of building meaningful retail partnerships, here’s how your peers are thinking about 3P commerce as they’re scaling online and facing profitability challenges (and our experts’ advice).
Where does dropship end and marketplace begin? And what does that mean for retailers and brands?
“Retailers are expanding assortments at a rapid pace through dropship and private marketplace investments to meet customer demand,” said John Fobare, Vice President, Client Partnerships. “At the same time, brands are using public marketplaces to test new products and enter new markets without relying solely on wholesale or DTC.”
“3P gives you the ability to run a hybrid strategy. You can reach new customers through marketplaces while using your owned channels to protect and serve your most loyal ones. The two don’t have to compete, they can complement,” said James Lang, Vice President, Client Partnerships.
Ultimately, the question isn’t where one model ends and the next begins—it’s how you use each one strategically.
For retailers, dropship and private marketplaces are third-party (3P) business models that offer flexibility to meet consumer demand.
- Dropship allows retailers to expand assortments without holding inventory. Suppliers ship directly to consumers on the retailer’s behalf, and retailers only pay for what sells. It’s great for reducing risk but comes with tighter margins and less control over the customer experience.
- Private marketplace (also known as curated marketplace) gives selected sellers more autonomy, including handling pricing, shipping, customer support, and returns. Retailers maintain oversight and can scale more easily by setting global seller terms instead of managing contracts individually.
- A hybrid model allows retailers to use dropship to build out a 3P commerce program to offer more assortment without buying and stocking the inventory themselves. This allows you to be flexible because you can shift high-performing dropship items to your wholesale model, increasing your product margins. Test new products and categories with low risk – and those that perform well can be moved to your dropship program.
For brands, marketplaces offer direct access to consumers across multiple platforms, and many are embracing them as a core part of their revenue strategy.
- 3P commerce helps brands extend their owned inventory to unowned channels. This enables brands to reach more consumers through a multichannel selling strategy.
- According to the State of 3P Commerce Report, nearly one-third of global executives say over 50% of their total revenue now comes from 3P sales channels. That’s how important these business models are for brands looking to scale without relying solely on wholesale or owned direct-to-consumer channels.
The key takeaway:
Brands and retailers are increasingly turning to hybrid models. Dropship enables retailers to build assortment and test demand. Marketplaces allow sellers to scale with lower overhead costs and more automation. Rithum’s unified commerce solution helps retailers and brands manage these models in one platform, reducing complexity and driving better ROI.
How do brands stay connected to retailers as 3P grows? Doesn’t it shift the balance out of control?
This is a concern we hear often, and it’s a fair one. As fulfillment shifts to suppliers and brands take more ownership in 3P environments, it can feel like traditional retail relationships are fading.
But the data—and the discussion—tell a different story.
“Retailers and brands are starting to treat 3P as an extension of the 1P relationship,” Fobare said. “What’s happening now is more collaboration because both sides know they need each other to meet the customer where they are.”
Staying connected means:
- Bringing data to the table: Brands can use performance insights from marketplaces to guide assortment decisions and pitch new opportunities to retail partners.
- Participating in retail media: With 85% of executives confident in retail media as a growth lever, collaboration on campaigns and promotions is now essential.
- Aligning on customer experience: Brands that maintain strong service level agreements (SLAs), consistent content, and reliable fulfillment earn more trust and more visibility – on both sides.
“To maintain control over the customer experience, you’ve got to partner with the right platforms and set clear standards. High-quality product data, consistent branding, accurate listings are how brands stay front and center,” Lang said.
The key takeaway:
The future isn’t about control, it’s about collaboration. Whether it’s a 1P or 3P relationship, the brands and retailers who win are the ones who work together to deliver the best customer experience.
How can Rithum help brands create new relationships with e-retailers?
Retailers are doubling down on 3P models—whether dropship, curated private marketplaces, or something hybrid. Brands, on the other hand, are looking for scalable access to new sales channels without starting from scratch each time. But the real challenge is connection: how do you find the right partner, the right model, at the right time?
That’s where Rithum comes in.
“We partner with over 40,000 brands, suppliers and retailers to expand into new channels like marketplaces, increase marketing ROI, and launch dropship and private marketplace programs,” said Brandon Klein, Director of Product Marketing at Rithum. “There isn’t much of the buying journey that we don’t touch.”
For brands, Rithum helps surface the right retailers and platforms to match your category, operational readiness, and growth goals. For retailers, Rithum simplifies onboarding and helps scale assortment with trusted suppliers fast.
“Brands and retailers benefit from being in more places at once,” Fobare said. “3P is one of the fastest ways to expand your presence and grow revenue.”
The key takeaway:
3P commerce isn’t a single strategy. It’s a flexible, high-growth model that brands and retailers are using to reach new customers, test new products, and reduce risk. But it’s not without its complexity.
The key is knowing which model to use when and how to scale each one with the right infrastructure, data, and partnerships.
“The goal is simple. Owned inventory and 3P should work together, not against each other,” Lang said.
Whether you’re a retailer expanding a private marketplace or a brand launching on Amazon, Rithum’s unified commerce platform helps you connect, scale, and grow smarter. Learn more by watching the full webinar here.
(Some quotes have been lightly edited for context and clarity.)
