By Martin Heubel, Amazon Strategy Consultant at Consulterce
Here’s what most Amazon vendors don’t understand:
A decline in Net Pure Profit Margin (PPM) means you’re going to face (very) tough annual negotiations this year.
That’s because Vendor Managers will:
- Strictly enforce their Net PPM targets
- Remove a selection that drags your account’s Net PPM
- Know that your cost prices are likely inflated
So unless your low Net PPM is offset through agreed cost-saving initiatives with Amazon, make sure your teams:
- Understand their position (and leverage) in your category
- Can prove price increases correlate with higher costs
- Plan for escalation measures of their Vendor Manager
In times when Amazon has to prove that it can sustain a profitable Retail business, preparing your annual negotiations has never been more important.
For further information and support, contact Martin Heubel here
