Amazon uses a specific playbook in annual vendor negotiations. Their Vendor Managers apply disincentives at set trigger points, like delays in agreements or inadequate proposals. Thanks, Martin.
Martin Heubel
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If your teams grant #Amazon more trading terms each year, chances are your margins are in the deep red. 🚩
So if you're worried about your profitability on Amazon, you probably need to take a firmer stance in your annual negotiations.
Why? Because Amazon does the same.
The reason why the online retailer is so effective in its annual vendor negotiations is a brutally applied playbook.
In other words, your Vendor Manager has to apply certain disincentives when they reach pre-defined trigger points in the negotiation.
Knowing these is essential to navigate and inform your trade discussions.
They include:
» A delay in reaching an agreement.
» Repeatedly inadequate trade term proposals.
» A lack of access to senior management.
» Failure to meet pre-defined ETAs.
» Etc.
So while your teams may prefer a collaborative negotiation approach, this is usually not a great idea when it comes to Amazon.
After all, you want to be in control of your negotiations with Amazon and not a victim of their pressure tactics.