Net PPM vs Contribution Margin – which Amazon profit metric should you really ca
By Martin Heubel · November 3, 2026 · Curated by George's Blog
Net PPM vs Contribution Margin – which Amazon profit metric should you really care about?
We all know that Vendor Managers love to complain about Net PPM. But in 2026, they also often cite an insufficient Contribution Margin.
Both metrics are problematic:
𝗙𝗶𝗿𝘀𝘁, 𝗯𝗲𝗰𝗮𝘂𝘀𝗲 𝗡𝗲𝘁 𝗣𝗣𝗠 𝗶𝘀 𝗮𝗻 𝗶𝗻𝗰𝗼𝗺𝗽𝗹𝗲𝘁𝗲 𝗺𝗮𝗿𝗴𝗶𝗻 𝗺𝗲𝘁𝗿𝗶𝗰.
It highlights the competitiveness of your Amazon investments relative to the selling prices of other retailers. But it doesn't show how your PDP content reduced customer returns (and costs) for Amazon.
𝗦𝗲𝗰𝗼𝗻𝗱, 𝗯𝗲𝗰𝗮𝘂𝘀𝗲 𝗖𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 𝗠𝗮𝗿𝗴𝗶𝗻 𝗰𝗮𝗻𝗻𝗼𝘁 𝗯𝗲 𝘃𝗲𝗿𝗶𝗳𝗶𝗲𝗱.
Vendor Managers often complain about a vendor's negative CM%, but won't share any data to support their claim. Worse, when AVS accidentally leaks a spreadsheet, many vendors learn that their CM% was never negative to begin with!
So should you care about Net PPM or CM after all?
Yes, but only directionally.
If your Net PPM deteriorates, use it to identify and address the root cause:
✅ Margin support for price matching
✅ Delisting of products with ≤20% Net PPM
✅ Funding to de-CRAP ASINs
If your Vendor Manager complains about their CM, prioritise operational improvements over additional trade investments:
✅ Supply chain initiatives (e.g., WePay, DI, VFlex)
✅ Address process defects leading to chargebacks
✅ Launching SIPP-eligible packaging
Has CM% come up in discussions with your Amazon Vendor Manager?