By Martin Heubel, Amazon Strategy Consultant at Consulterce
Many vendors struggle with the poor return on investment from Amazon trade terms.
And it’s true:
- Auto Marketing doesn’t drive any growth
- AVS offers limited strategic value
- Vine and A+ Premium are free for 3P sellers
Yet, Vendor Managers work their magic to get suppliers invested.
If you have ever taken over a 1P account, you know these low ROI terms have often reached significant levels over the years.
Which begs the question:
How can you make better investment decisions going forward? How do you know which new trade terms will provide a better value?
To find the answer, we must understand the targets of our Vendor Managers:
For each annual negotiation, buyers are asked to grow terms with their brands.
This leads them to promise the world just to get you signed on their newest initiatives.
Sometimes, these terms provide value.
But more often, they don’t.
So if you want to find out whether there is real value behind a term:
Ask your Vendor Manager for proof.
Ask them to send you indexed performance reports from other brands in your category.
If Amazon sends these to you, analyse whether shifting investments may provide a better ROI.
But if Amazon doesn’t send you any data insights, or worse, tells you these don’t exist.
Respectfully reject their request for an investment.
And focus your negotiation on reducing existing terms that return no real value.
For further information and support, contact Martin Heubel here
