By Martin Heubel, Commercial Advisor to 1P Amazon Vendors at Consulterce
Most vendors are slow to realise: Amazon’s base accruals don’t drive any sales growth.
Whether you invest 1% or 10%, Amazon won’t show your products more or less often. The only difference is that larger investments are more likely to prevent your items from being CRAP’ed.
That’s because Base Accruals are a pure profit centre for Amazon (read: listing fee).
So what should you do when your investment exceeds 10%?
1. Add conditionality
Don’t renew your Base Accruals without tying them to specific benefits. Ask for chargeback waivers, Vine credits, or regular strategy sessions in return.
2. Move them into the front-margin
If you have already secured a value exchange, consider moving part of the investment into your cost prices. It keeps Amazon’s Net PPM stable but makes your back terms leaner and easier to manage.
Note: This improves Amazon’s free cash flow, so make sure your teams reclaim that value during annual negotiations.
3. Shift to dynamic margin support
If the above options aren’t right for your brand, consider converting part of your base accruals into dynamic cost support. This allows you to focus investments on margin-challenged ASINs instead of the entire catalogue.
For further information and support, contact Martin Heubel here
