By Martin Heubel, Founder and Director of Consulterce, a strategy consultancy for B2C Household & CPG brands.
Many 1P vendors assume that increasing their cost prices will lead to higher prices on Amazon.
But the opposite is true!
If you increase cost prices without stabilising Amazon’s margin, your products will simply get delisted (CRAP’ed).
So unless you…
- Improve your Average Selling Price
- Stabilise your Net PPM
- Reduce your variable cost structures
…don’t even start talking about cost increases with your Vendor Manager.
Instead, you should:
- Review distribution structures
- Tighten volume discounts for distributors
- Focus on raising the ASP with other retailers
- Distribute the cost increase over several months
For further insight and support, contact Martin Heubel here
