How to talk to Amazon

When it comes to talking to Amazon you need to understand, that Amazon has a professional vendor negotiation team.
They want profitable items and a big assortment and they also even use AI to talk to you, called the ice machine. Stating that sometimes you don’t even get the chance to talk to a real live human.
Other goals of Amazon are consistency and predictability – they don’t want big variability.
This includes negotiations. So being prepared to talk about ordering, shipping and consistency in their Amazons traffic is important.
Additionally the Amazon negotioation team enjoys having your category expertise; and they do lean on Brands for category developments to figure out key insights, and the best advertising for their own success.

The Net PPM is the main profitability metric that Amazon refers to when talking about a vendor’s bottom-line performance.
It takes the average selling price, deducts the cost price and adds your back-end term or fees you pay Amazon to promote your products.
Advertising revenue is not included in your Net PPM. Category expenditures like holiday merchandising packages are included. However chargebacks and shortage claims are not included.

This abbrevation stands for Product Costs of Goods Sold.
It is a revenue figure that takes your cost price to Amazon and multiplies it by the volume sold to their customers.
It reflects the price Amazon paid to you for your items. The metric is calcuculated as followed:

Vendor Cost Price * Volume Shipped to Amazon Customers

Are similar to PCOGs, but this metric multiplies your cost prices with the volume that you as a vendor have shipped to Amazon warehouses.

Lost BuyBox measures the number of times Amazon could not win the Buy Box because other marketplace sellers could beat its price.
The lower the percentage, the better your direct reach to Amazon’s customers. The metric is calculated as followed:
Number of lost buy boxes / Total number of detail page impressions
Amazon does not show you lost BuyBox rates in their retail analytics but may be in a vendor manager report! So look out for that one in our AMVisor article Dashboard.

ProcOOS measures the availability rates of Amazon. It’s an output metric that indicates the operational performance between you and Amazon, in other words, ProcOOS measures your out of stock rate on your procurable or obtainable products without a delay. Having your ProcOOS value below 10% is great. If it is below 5%, it is considered best in class.

…which means an item which can’t realize a profit on Amazon. It is unprofitable and inhibits a brands growth trajectory and results in a loss of sponsorship, subscription and save, and gives you very bad negotiation leverage. To combat CraP you can increase your retail price, offer different assortment, look at your distribution strategy and supply chain and also drive down all your costs specifically in weight and packaging. Furthermore you have the option not to sell the item on Amazon or go via a 3^rd party account (seller account).

In the future Amazon will most likely crack down on these limiting them at all.
Understanding these data points and figuring out where you can really stand out on Amazon is going to help you with your negotioation with Amazon and will boost your profit on Amazon.