By Martin Heubel, Commercial Advisor to 1P Amazon Vendors at Consulterce
There’s a common misconception that brands should launch their entire assortment on Amazon.
Some even think their Vendor Manager should inform their portfolio strategy.
It couldn’t be further from the truth.
In fact, some of your top-selling products probably shouldn’t be sold on Amazon.
Don’t believe me?
Just remember how excited Vendor Managers were to list your low ASP and Everyday Essentials range on Amazon…
…only to return a few months later with margin compensation requests and threats to delist these very products.
The thing is:
Amazon likes high-velocity products that drive shoppers to its platform.
So vendors adjust to Amazon’s low ASP and Everyday Essentials portfolio strategy.
Until Amazon’s internal priorities shift back to profit.
If you don’t have a proactive assortment strategy, you’re at the mercy of Amazon’s changing focus between sales and margin.
Here’s what highly profitable Amazon vendors do differently:
First, they scrutinise their existing 1P portfolio by:
- Removing items with high return rates that they can’t resolve
- Relisting products under ongoing price pressure as bundles
- Excluding unprofitable products from ad and promo campaigns
Second, they use these learnings to build a more strategic portfolio by:
- Forecasting an item’s margin outlook before its launch
- Negotiating lower Net PPM targets before listing Nielsen selection
- Partnering with 3P Sellers to handle items not suited for 1P
The key takeaway?
Profitable vendors don’t let Amazon shape their ranging decisions.
They focus on building a resilient portfolio instead.
For further information and support, contact Martin Heubel here
