If you’re not monitoring your market share on Amazon, you’re entering your Annual Vendor Negotiation (AVN) blindfolded. And it’s guaranteed to cost you margin.
That’s because your category relevance dictates your negotiation power.
Your negotiation dynamic completely changes depending on whether your brand is in the top 10 or top 100 of your category. Vendor Managers spend most of their time negotiating with vendors that move the needle in their category.
If you want to understand your leverage with Amazon, you must know exactly:
- The change to your market share on Amazon YoY
- Whether your brand grows through value or volume
- Differences in 1P vs 3P category growth rates
- Your contribution to Amazon’s category growth
- Your brand’s position in the category
Remember: You cannot negotiate the same way as a brand with declining market share and low relevance compared to one that Amazon views as category critical.
So make sure you prepare your AVN strategy accordingly.
