Rithum research flags rise in retailers and brands increasing third-party selling amid challenging times

57% of retailers and brands in the UK plan to increase third-party (3P) selling in the next 12 months to help weather the turbulent economic climate, according to research released by Rithum.

Against a backdrop of rising operational costs and a highly competitive e-commerce market, the report highlights that lower margins are the primary driver behind why more businesses are expanding into 3P commerce.  

This was conducted by Wakefield Research and surveyed 550 retailer and brand executives in the US, UK and Germany to identify growth opportunities through this model.  

This is different for retailers compared with brands. For retailers, 3P commerce helps them access unowned inventory. This is a business model where brands sell products directly to consumers through a retailer’s storefront, typically through a dropship or marketplace approach.

This model shifts inventory risk away from retailers, who instead act as facilitators between brands and consumers. For brands, 3P commerce helps them extend their owned inventory to unowned channels. This allows brands to reach more consumers through a multi-channel selling strategy.  

In addition to reacting to increasing pressure on margins, brands are also using a third-party model to expand their customer base and reach customers where they already shop. This expansion has been successful, with two thirds of UK brands and retailers increasing the percentage of sales coming from 3P in the last year.  

Third-party commerce is becoming more prevalent in the UK with 30% of brands now attributing more than half of their sales revenue to 3P platforms. 99% of the respondents say 3P sales are important to the company’s profitable growth. 

Philip Hall, Managing Director for EMEA at Rithum, comments: “Brands are embracing the flexibility that third-party commerce provides to thrive during turbulent times. With online shopping more fragmented than ever and margins becoming tighter, having a presence across multiple marketplaces is becoming a virtual necessity for most brands.”

“A brand can’t dictate to their consumers where they shop so managing the increasing number of marketplaces is a growing challenge. Some are turning to AI to solve the issue, with tools like Rithum’s Magic Mapper making the manual process much more efficient.”

“Retailers and brands are feeling the pressures of the complex e-commerce market from all sides. What may feel like a crisis is actually a turning point filled with opportunity. As the industry evolves, it’s great to see how businesses are not just surviving but thriving when they adopt the 3P commerce model.”  

2024 RTIH INNOVATION AWARDS

E-commerce is a key focus area for the sixth edition of the RTIH Innovation Awards, which is now open for entries.

The awards, sponsored by Scala, CADS, 3D Cloud, Brightpearl by Sage’s Lightning 50, and Retail Technology Show 2025, celebrate global tech innovation in a fast moving omnichannel world.

Key 2024 dates

Friday, 25th October: Award entry deadline 

Tuesday, 29th October: 2024 shortlist revealed

30th October-6th November: Judging days

Thursday, 21st November: Winners announced at the 2024 RTIH Innovation Awards ceremony, to be held at RIBA’s 66 Portland Place HQ in Central London.