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By Martin Heubel · October 20, 2025 · Curated by George's Blog
The biggest mistake vendors make when asking for a cost price increase with #Amazon?
They ignore how the online retailer actually operates.
Amazon is a self-proclaimed price follower. This means the wider market determines its selling price. The Buy Box won't show a higher price just because you raised Amazon's cost prices.
If Amazon accepts a higher cost price without a market-wide change, it only reduces their own margin.
"So why doesn't Amazon just increase its prices?”, I hear you ask.
Because in over 20 years, Amazon has stood firm on its price-followership model. And they won't change it for your brand.
If you want Amazon to accept your cost price increase, you need to do your homework:
Start by enforcing any cost increases with your other retail partners. Review how much inventory they have to assess how long they can keep going at the current market price.
Once you have this insight, set firm deadlines in your CPI negotiations with Amazon. Offer to bridge their margin needs for a set time period. You can do that by offering a bulk buy at the old cost price, or through time and ASIN-limited cost support.
The key here is to be realistic about your ability to raise cost prices across the market. If your offline teams hand out discounts to Walmart, Target & Co. without you doing the same with Amazon, don't even try to start negotiations with your Vendor Manager.
#amazonvendor #amazonstrategy