By Martin Heubel, Amazon Strategy Consultant at Consulterce
Increasing trade terms remains a focus for Amazon in its upcoming annual vendor negotiations (AVN). It’s the most effective way for Amazon to improve its retail financials.
So 1P brands can expect to be asked to contribute their fair share in their annual negotiations, either through:
- Cost reduction requests
- Margin compensation demands
- And delistings and CRAP to underline the above.
This requires vendors to prepare for tough commercial discussions.
To do that effectively, it’s no longer enough to just align on cost prices and trade terms.
Brands also need to effectively negotiate cost savings along their joint supply chain.
These cost-saving initiatives may include:
- Consolidated Delivery (PICS)
- Full Truck Ordering
- Direct Fulfilment
- Pallet Ordering
- Direct Import
- Vendor Flex
The bottom line?
Prepare your annual negotiations early, and don’t just focus your discussions on cost prices and trade terms.
Make sure you direct the discussion to joint cost-saving initiatives instead.
For further information, contact Martin Heubel here
