By Martin Heubel, Amazon Strategy Consultant at Consulterce
Most brands will see Amazon reject their request to move trade budgets to Retail Media in 2025. But is that even possible?
The answer is: It depends.
Vendor Managers don’t see a direct benefit of advertising investments in their P&L. That’s unless you make them see it.
Take the following example:
Let’s say you want to move 1% of trade terms into advertising.
All your Vendor Manager will see is a 1% reduction in their Net Pure Profit Margin (Net PPM). So they won’t accept this as an outcome of your vendor negotiations.
Instead, you need to frame the investment shift as a margin opportunity for Amazon.
How? By using the 3-C formula:
- Collaborate: Define profitable portfolio segments together with your VM.
- Communicate: Use data to show how past advertising campaigns have improved your account-level Net PPM.
- Commit: To spend a portion (e.g., half) of any shifted investment against accretive portfolio items in 2025.
The bottom line?
If you want to change your investment structure with Amazon, make sure to align your targets with the ones of your Vendor Manager.
For further information and support, contact Martin Heubel here
