By Martin Heubel, Amazon Strategy Consultant at Consulterce
How to leverage your Vendor Manager’s targets in negotiations with Amazon:
Hint: It’s not all about profitability.
In fact, your Vendor Manager has to improve 3 key metrics:
- Sales Growth
- Profitability, and
- Operational Efficiencies
So VMs focus on actions that align with their objectives:
- Sales Growth: Deals & promotions
- Profitability: Cost reductions and trade terms
- Operations: Packaging & supply chain improvements
But before starting to discuss their demands, also question your existing trade setup and funding structures.
For example:
- Review unprofitable promo funding
- Terminate trade terms with low/no ROI
- Ask for investment reductions when Amazon wants access to Nielsen-selection
Remember: Leverage is given to you the moment you enter into negotiations with Amazon. But you must remind your Vendor Manager about it.
For further information and support, contact Martin Heubel here
