With the U.S. introducing tariffs on China, how can vendors protect their profit margins with #Amazon?

👉 Hint: By taking a proactive approach to cost negotiations.

That's because raising cost prices can be a lengthy negotiation process and Vendor Managers will try to delay any impact on their Net PPM.

So you'll need persistence and a clear plan to execute.

Here's how to get started:

1️⃣ 𝗤𝘂𝗮𝗻𝘁𝗶𝗳𝘆 𝘁𝗵𝗲 𝗶𝗺𝗽𝗮𝗰𝘁
Work with finance, pricing, and supply chain teams to understand the impact of tariffs. You ought to know how much of your revenue is sourced from China, and the impact of tariffs on US-made goods, as raw materials may still be subject to tariffs.

2️⃣ 𝗔𝗹𝗶𝗴𝗻 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗰𝗮𝘀𝗲
Consult with your pricing teams about the timing of the cost price increase. If you are in the middle of your AVN with Amazon, don't be afraid to make tariff-related price increases part of your negotiation.

3️⃣ 𝗡𝗲𝗴𝗼𝘁𝗶𝗮𝘁𝗲 𝗮𝘁 𝗔𝗦𝗜𝗡 𝗹𝗲𝘃𝗲𝗹
Outline the exact impact of tariffs at ASIN level to justify your cost increase. Vendor Managers won't be happy to accept higher costs, but you can offer to mitigate the impact via staged cost increases or a final bulk buy at the old cost price.

4️⃣ 𝗥𝗲𝘃𝗶𝗲𝘄 𝗮𝗻𝗱 𝗮𝗱𝗷𝘂𝘀𝘁
Increasing cost prices can lead to unintended CRAP'ing and Buy Box suppressions, as other retailers may choose to keep selling prices low. This narrows Amazon's margin as a price follower also since it often holds less inventory than retailers like Walmart & Co.

Make sure you keep some emergency funding sidelined in case you run into profit-related availability headwinds.

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What's your strategy to protect your margins from incoming U.S. tariffs?

Let me know in the comments!