Want peace in your next annual vendor negotiation (AVN) with #Amazon? 🕊️🤝

Then you need to stabilise your Net PPM between AVN cycles.

👇 Here's exactly how to get started:

𝟭- 𝗦𝘁𝗮𝗿𝘁 𝘁𝗿𝗮𝗰𝗸𝗶𝗻𝗴 𝗽𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝘁 𝗔𝗦𝗜𝗡-𝗹𝗲𝘃𝗲𝗹
Whether you're an SME or a big multinational. You must track your sales and profit metrics at the product level. Without having a clear understanding of how a single item may impact your account profitability, you cannot take effective action.

I highly recommend using Amazon's SP-API and connecting it to your internal Power BI. If that sounds too complicated, there are plenty of reporting tools for Amazon vendors that will give you the same insight without the initial setup barrier.

𝟮- 𝗥𝗲𝘃𝗶𝘀𝗲 𝘆𝗼𝘂𝗿 𝗽𝗿𝗼𝗺𝗼𝘁𝗶𝗼𝗻𝗮𝗹 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝗮𝗹𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻
Once you clearly understand your portfolio's profit performance, it's time to shift investments to margin-accretive SKUs.

Amazon will often ask you to run price promotions on existing top sellers. But these may not be your profit drivers. So make sure you use ASIN-level insights to shift investments to where they will benefit your wider account margin.

𝟯- 𝗠𝗼𝗻𝗶𝘁𝗼𝗿 𝘁𝗵𝗲 𝗔𝗦𝗣 𝗳𝗹𝘂𝗰𝘁𝘂𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗽𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼
Using virtual shelf monitoring software like Keepa or Profitero can help identify ASP fluctuations on your account. This is important because it allows you to spot pricing errors, overstock markdowns, and price-matching activities early.

While you won't be able to prevent the ASP changes, tracking them will help you better understand whether Amazon's requests for margin support are justified… or caused by the online retailer itself.

𝟰- 𝗧𝗿𝗮𝗱𝗲 𝗰𝗼𝘀𝘁 𝗱𝗲𝗰𝗿𝗲𝗮𝘀𝗲𝘀 𝗳𝗼𝗿 𝗰𝗼𝘀𝘁 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝘀
Vendor Managers are known to reject vendor requests for cost price increases. But when reviewing your portfolio, you'll likely see two things:

1) ASINs with an accretive Net PPM, and
2) ASINs with a dilutive Net PPM.

This allows you to raise cost prices on items that have a margin surplus in exchange for a cost price decrease on dilutive items. Vendor Managers will often accept this trade, as long as the wider account margin remains unchanged.

𝟱- 𝗠𝗶𝗻𝗶𝗺𝗶𝘀𝗲 𝘁𝗵𝗲 𝘂𝘀𝗲 𝗼𝗳 𝗰𝗼𝘀𝘁 𝘀𝘂𝗽𝗽𝗼𝗿𝘁
Amazon is quick to request cost support from suppliers. But any dollar spent outside your AVN forms the basis of the investment requirements for your future negotiation.

So instead of granting cost support, focus on initiatives that drive joint cost savings: Bulk order discounts linked to a consolidated FC delivery, sell-out funding in exchange for visibility on the deals & promotions page, etc.

Remember: Managing your vendor profitability with Amazon is a joint effort. If you abandon your Net PPM between AVN cycles, annual negotiations will be more difficult.

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Did I miss anything? Let me know in the comments!

#amazonvendor #amazonstrategy