By Martin Heubel, Amazon Strategy Consultant at Consulterce
Your Vendor Manager will likely pitch Vendor Flex and other supply chain initiatives during annual negotiations in 2024. That’s because Amazon needs to address its labour shortages and capacity constraints.
Yet, most vendors reject these logistics initiatives outright. Why?
Because they represent significant changes to their operational setup.
But most KAMs overlook the hidden cost-saving opportunities these initiatives present:
- Reduced freight costs
- Cost savings on labour
- Reduced amount of chargebacks
- Reduced product quantity variances (PQVs)
- Reduced number of rejected trucks during peak season (Q4)
Most brands only calculate the cost savings of the first two points. But the largest cost savings usually materialise in the hidden parts of the P&L:
- Auditing
- Accounting
- Retail Finance
So make sure you assess logistics initiatives holistically:
Don’t estimate the financial impact by only talking to your logistics department.
Make sure you also talk to your finance and accounting stakeholders.
You may find significant cost savings in unexpected areas of your P&L.
For further information and support, contact Martin Heubel here
