By Martin Heubel, Amazon Strategy Consultant at Consulterce
Vendor Managers at Amazon focus on two things during annual negotiations:
Reducing cost prices and increasing trade investments.
Because these are the easiest ways to achieve their profitability targets.
The problem with this?
Amazon’s investment recommendations don’t match the economic realities its vendors face in 2023.
Which inevitably leads to delistings, lost sales, and an overall misaligned negotiation focus.
The better way?
Focusing on mutual cost savings that drive actual value for both businesses.
Yet, only a few suppliers are aware of the hidden negotiation levers they can discuss with Vendor Managers.
They include:
- Chargeback waivers
- Regular strategy sessions
- Retail marketing discounts
- Free inclusion into deal events
- Access to pre-launch campaigns
- Trade term exemptions at ASIN level
- Access to senior Amazon leadership teams
- Supply chain initiatives (e.g. Pallet or Full Truck Ordering)
With margins under pressure on both sides, make sure you ignore any blind investment requests from your Vendor Manager. Instead, steer commercial discussions to areas that will drive actual cost savings in your business.
For further insight and support, contact Martin Heubel here
