Never accept Amazon's Net PPM targets. ๐ Here's what to do instead.๐ 1- Acknow
By Martin Heubel ยท November 13, 2026 ยท Curated by George's Blog
Never accept Amazon's Net PPM targets. ๐ Here's what to do instead.๐
1- Acknowledge
2- Understand
3- Address
This simple three-step rule may just save your business millions of dollars.
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You want to listen to Amazon's concerns but never agree to a Net PPM target. Pricing isn't in your control and so vendors must never agree to a Net PPM target.
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Identify the root cause of your Vendor Manager's request: Have their cost-to-serve gone up? Are rising damage or return rates causing profitability problems? Is your ASP performing below the category average?
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Remember that Net PPM is an incomplete margin metric. If Amazon wants to improve its profitability, show them how you improve in areas that Net PPM never captures:
โ Launching premium ASP ASINs
โ Reducing customer returns
โ Improving process compliance
โ Onboarding to supply chain initiatives
โ Expanding SIPP coverage
It's why you should also never (sic!) sign any margin guarantee agreements with the online retailer.
-- ๐ง๐๐ ๐๐ซ๐๐๐ฃ๐ง๐๐ข๐ก --
As always, there's an exception: when your Net PPM deteriorates YoY. In this case, make sure you address the underlying root cause. Otherwise, Amazon may simply suppress the sales on your account.
How do you work around Amazon's Net PPM targets