"Amazon are requesting a cost price reduction."
By Ant Finch · June 15, 2026 · Curated by George's Blog
"Amazon are requesting a cost price reduction."
Amazon has its own margin targets to hit. If their Net PPM on your products isn't where they want it, the easiest lever is your cost price.
Sometimes it's genuinely about competitive pricing in your category. More often, it's just Amazon protecting their own commercial position and seeing if you'll fund it.
For a lot of vendors, saying yes is the easiest way.
Keep the relationship smooth, move on to the next agenda item.
But saying yes isn't the easy option, because the question was never whether Amazon asks....it's what happens to your margin when you agree to the cost price reduction.
Which sku's drop below target GP?
What does it do to the weighted margin across the catalogue?
Is there a recovery plan or has the base been reset?
Most vendors can't answer those questions.
So they agree, and find out the answer six months later in the P&L review.
A cost price reduction doesn't automatically mean more sales, but it does mean you've moved margin from your pocket to Amazon's.
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🚀 I help Amazon vendors increase their margins by 5-20% in 90 days.