By Martin Heubel, Amazon Strategy Consultant at Consulterce
If you’re a European brand thinking US tariffs won’t impact your Amazon business, you might want to think again.
While the US makes up 69% of Amazon’s worldwide net sales, Europe comes right after that. Germany and the UK alone contribute 12% to Amazon’s global revenue.
So what happens when Amazon’s margins get hit in the US?
Vendor Managers are tasked with offsetting this impact in other markets
It’s no wonder European brands face increased scrutiny from Amazon. Vendor Managers request suppliers to:
- Sign Guaranteed Margin Agreements
- Increase Prime Day funding to support their Net PPM
- Reduce cost prices and defer any cost price increases
Whether you’re facing margin discussions with Amazon or not. As a 1P vendor, your job is to protect your bottom line:
Be critical when it comes to additional promo funding requests for Prime Day. Monitor Net PPM trends and ask Amazon to partially self-fund tier 1 deal events if margins are up YoY.
Most of all: Become granular about which products you activate and when. This decision shouldn’t be left to your brand and marketing department.
Because one thing is for sure: Amazon will try to offset the commercial impact of US tariffs with European brands.
For further information and support, contact Martin Heubel here
