By Martin Heubel, Amazon Strategy Consultant at Consulterce
Stop listing your products with Amazon. Instead, forecast their profit margins first.
I see far too many vendors offering their entire portfolio to the online marketplace.
Only to see their margins diluted a few weeks later.
The problem is:
If you ignore the existing ASP of your products in the market, you’ll likely face a hefty bill in the form of margin compensation requests and delistings from your Vendor Manager.
So here’s what to do instead:
- Find out your average Net PPM for the last 12 months.
- Identify the ratio between the ASP and the cost price of your products listed on Amazon that will allow you to reach your Net PPM target.
- Use tools like Profitero to determine the ASP in the market for the product(s) you want to list on Amazon.
- List only those products that meet or exceed your identified ASP-to-cost ratio (and earn you a margin).
Following this 4-step process ensures you adopt a data-driven approach to listing a profitable selection with Amazon.
For further information and support, contact Martin Heubel here
