Treating your vendor relationship with #Amazon as a partnership misses the point
By Martin Heubel · May 26, 2026 · Curated by George's Blog
Treating your vendor relationship with #Amazon as a partnership misses the point of the retailer's business model ❌✋
Amazon doesn't operate like a traditional grocer or category buyer. It runs an iterative, transactional engagement model with 1P suppliers that cycles through three distinct phases:
𝗣𝗵𝗮𝘀𝗲 𝟭: 𝗚𝗿𝗼𝘄𝘁𝗵 𝗙𝗼𝘂𝗻𝗱𝗮𝘁𝗶𝗼𝗻
👉 Vendor Managers ask for your full assortment
👉 Net PPM and margin asks remain low to moderate
👉 AVN cycles are simple or offshored
This is the onboarding phase. Amazon prioritises selection availability and POs with little friction. Brands often mistake this for a healthy long-term dynamic.
𝗣𝗵𝗮𝘀𝗲 𝟮: 𝗣𝗿𝗼𝗳𝗶𝘁 𝗘𝘅𝗽𝗮𝗻𝘀𝗶𝗼𝗻
👉 Vendor Managers push for Net PPM and CP target achievement
👉 Growth gets constrained via Buy Box pulsing and CRAP
👉 AVN cycles become difficult and lengthy
Most vendors are in this phase today. Amazon is limiting growth and scrutinising every SKU through a profitability lens, intensifying pressure on your sales team.
𝗣𝗵𝗮𝘀𝗲 𝟯: 𝗚𝗿𝗼𝘄𝘁𝗵 𝗥𝗲-𝗘𝘅𝗽𝗮𝗻𝘀𝗶𝗼𝗻
👉 Vendor Managers focus on 'Nielsen' selection ≤$5
👉 Same-day delivery and OpEx efficiencies take centre stage
👉 Margin handling becomes semi-tolerant to unleash the next growth cycle
Then, the cycle repeats.
A partnership-oriented business model limits Amazon's ability to standardise processes in its supplier management. Yet, standardisation is what enables automation. And automation is what drives the cost efficiencies Amazon needs to fund its retail flywheel.
So yes. While I understand that it hurts to read this:
You don't have a partnership with Amazon.
♻️ Repost to share this, and
💭 Comment your thoughts!
#amazonvendor #amazonstrategy