By Martin Heubel, Amazon Strategy Consultant at Consulterce
When it comes to Annual Vendor Negotiations (AVN) with Amazon, Vendor Managers like to focus on one thing: Sales growth and Net PPM.
The problem is: These are all Output metrics.
They measure the outcome of Amazon’s and your actions on the account.
But they don’t tell you anything about -how- to achieve the set goal(s).
So instead of focusing vendor negotiations on Output metrics, shift the conversation to the Inputs required to achieve the desired outcome.
For example:
- If your Vendor Manager wants to talk about sales growth (Output), make sure you request joint forecasting sessions and the unrestricted usage of Born-to-Run.
- If your VM wants to increase Net PPM, align on defining a % of your deals budget to promote ASINs with above-average margins.
The bottom line is this:
Amazon will always focus on Outputs in annual negotiations. It’s their path of least resistance with little to no commitment.
That’s why your Vendor Manager always talks about a ‘sales ambition’ instead of a sales target.
It’s your job as a vendor to focus your trade negotiations on the required Input metrics to navigate your joint business.
For further information and support, contact Martin Heubel here
