Managing Ecommerce Vendors

The Year Amazon Declares Price Leadership - What Vendors Need to Know👇 While Amazon often prides itself as a price follower in vendor negotiations, its recent press release sheds light on quite the opposite: "𝙎𝙩𝙪𝙙𝙮 𝙛𝙞𝙣𝙙𝙨 𝙩𝙝𝙖𝙩 𝘼𝙢𝙖𝙯𝙤𝙣 𝙘𝙤𝙣𝙨𝙞𝙨𝙩𝙚𝙣𝙩𝙡𝙮 𝙙𝙚𝙡𝙞𝙫𝙚𝙧𝙨 𝙩𝙝𝙚 𝙡𝙤𝙬𝙚𝙨𝙩 𝙥𝙧𝙞𝙘𝙚𝙨 𝙘𝙤𝙢𝙥𝙖𝙧𝙚𝙙 𝙩𝙤 𝙡𝙚𝙖𝙙𝙞𝙣𝙜 𝙐𝙎 𝙧𝙚𝙩𝙖𝙞𝙡𝙚𝙧𝙨." – 𝗔𝗺𝗮𝘇𝗼𝗻 1P brands should take note of this press release, as Vendor Managers often point fingers at Amazon's price-following strategy when justifying their margin demands. Amazon now appears to be playing a two-sided game: It wants brands to fund price-leading discounts. All while demanding compensation whenever Amazon matches the prices of other retailers. If you're a 1P vendor, this puts your margins in a tough spot. And requires you to change your approach to vendor negotiations. How? By following this 3-step formula: 𝟭- 𝗥𝗲𝘃𝗶𝗲𝘄 𝘆𝗼𝘂𝗿 𝗔𝗺𝗮𝘇𝗼𝗻 𝗮𝘀𝘀𝗼𝗿𝘁𝗺𝗲𝗻𝘁 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 While Amazon wants you to list your entire portfolio, this strategy is rarely profitable. If you list products that you know will be sold by discounters, chances are you create a race to the bottom. Instead, you want to forecast the margin impact of any new listing. Ask yourself: Will listing this product stabilise, drive, or dilute your account margins? If you don't know the answer, you should defer the launch of products with Amazon until you see their ASP reflected in the market segment. 𝟮- 𝗦𝗲𝘁 𝗮𝗹𝗹-𝘆𝗲𝗮𝗿-𝗿𝗼𝘂𝗻𝗱 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗴𝘂𝗮𝗿𝗱𝗿𝗮𝗶𝗹𝘀 Vendor Managers will ask you for three different investment types: 1- Trade investments during AVNs 2- Funding for deals/price promotions 3- Cost support agreements to stabilise Net PPM Knowing that VMs will approach you with investment requests at least 3-6 per year, ensure you account for these negotiation cycles. Don't make 100% of your available budgets part of your annual vendor negotiations. Instead, withhold part of your budget to be able to cater to Amazon's funding needs for deals and to avoid CRAP. 𝟯- 𝗨𝘀𝗲 𝗽𝗿𝗼𝗺𝗼𝘁𝗶𝗼𝗻𝘀 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰𝗮𝗹𝗹𝘆 Price promotions are a strategic vehicle for Amazon to lead in price. This means that you must limit your exposure to these deal events. Otherwise, you'll likely create negative price dynamics that disrupt your relationship with other retailers. So make sure you prioritise tier 1 deal events like PD or BFCM, but avoid "always-on" deals that will only dilute your brand positioning. --- What do you think? Should we still treat Amazon as a price follower, or is it time to think of Amazon as a price leader? Let me know in the comments! #amazonvendor #amazonstrategy

Prime Day is shifting from a sprint to a marathon. Here's what Incrementum Digital data tells us about making it work: For years, we've seen a clear pattern at Incrementum Digital: Prime Day 1 massively outperforms Day 2. Shoppers start strong and then fatigue sets in. But Amazon just doubled Prime Day this year. Three key things we're keeping in mind this year: 1. Budget allocation needs a complete rethink Our success formula has been increasing ad spend 2-3 days BEFORE Prime Day. Why? Amazon's last-click attribution shows increased ad sales before Prime Day even starts. But with four full days, you'll need to pace your spend differently: - Keep your pre-Prime ramp-up strategy (this is still crucial) - Plan for mid-event budget refreshes on Days 2-3 - Reserve 25-30% of your total budget for the final 48 hours Most brands will blow their entire budget in the first half, missing late-event opportunities when competition thins out. The longer format means strategic patience beats the "all-in Day 1" approach of previous years. 2. Deal timing will make or break you With 96 hours of Prime Day, running deals only on specific days is now a legitimate strategy. But our data confirms shoppers still show up heaviest on Day 1 when excitement peaks. Even without deals, you'll see a lift from site traffic alone. But don't expect anything dramatic without a solid discount strategy. 3. Real-time monitoring becomes your secret weapon The data shows dramatic shifts in the competitive landscape over 96 hours: - Competitors' inventory will deplete - Bidding wars will settle down - New high-converting keywords emerge - Category dynamics shift as early promotions end Brands that actively track these changes can capitalize when others are running on autopilot. Amazon wouldn't extend Prime Day without data suggesting it drives incremental revenue. The big question: will shopper fatigue set in, or will this create entirely new buying patterns? We'll know soon enough. What's your Prime Day strategy looking like?

The Untapped Risk in Marketplace-First Brands... Marketplace Dependency Risk — and it quietly compounds as you scale. Here’s the math: 1️⃣ Topline Fragility  If 70–80% of your revenue comes from Amazon, Flipkart, or Myntra... One algorithm tweak, penalty, or policy shift — and your revenue can drop by 30–40% overnight. 2️⃣ Pricing and Margin Squeeze  Marketplaces push for discount parity.  They want the lowest prices and commissions.  You can’t easily raise prices, but your costs (logistics, returns, ads) keep rising quietly. Margin compression isn't a phase. It's structural. 3️⃣ No Consumer Ownership  Even after selling 10,000+ units, you don’t own the customer data.  You can’t remarket. You can’t build loyalty.  You are permanently renting traffic—on someone else’s terms. 4️⃣ Working Capital Traps  Longer payment cycles + return risks = working capital nightmares.  Every rupee stuck in the system delays scale. 5️⃣ Exit Valuation Hit  Brands with over 60% marketplace dependence often get lower valuations.  Investors penalize the "platform risk" by adjusting down the revenue multiple. This is the advice I've seen the smart founders share: - Balance marketplace sales with your own website D2C channel. - Invest in brand-building early—even when marketplace sales look tempting. - Build retention engines (email, WhatsApp) off-platform. - Negotiate smarter platform deals once you have leverage. 📌 What's one thing a founder should do to de-risk their channel dependence? Picture - Inc42 FAB MAVEN

Yesterday was a bit of a shock for mid-sized brands across the US and EU sold on Amazon as "Vendors" (1P). Amazon has reportedly sent termination emails to many of these brands, inviting them to transition to the Seller (3P) model. Looking at Amazon's financial results, this move seems obvious. The 3P model is more profitable for the e-commerce giant. Importantly, it shifts most of the risk to sellers, who may feel like they have more control (which is true to an extent https://lnkd.in/eYsx_8Gi), but now bear the burden of inventory management, pricing strategies, and demand forecasting. While this isn't unprecedented - it's happened before on a smaller scale and on other marketplaces like Zalando in Europe- the scope of this move seems significant. For brands with an existing hybrid 1P/3P strategy or those operating D2C websites, this transition might be smoother. However, for those starting from scratch, especially just weeks before the holiday season, the challenges are considerable. Fulfillment, returns, and customer support can't be improvised overnight. While Amazon's FBA (Fulfillment by Amazon) may cover some aspects, there's still a lot for these brands to figure out. More than ever, this shift underscores the importance of diversification and adaptability in (e)commerce. Brands heavily reliant on a single channel may need to reassess their strategies moving forward. To all those impacted by this change, I wish you the best of luck in navigating this transition. May you find new opportunities and success !

At Amazon, the Correction of Error (COE) process is a structured, scalable tool designed to ensure that customer-impacting problems are not only fixed, but truly understood. Here’s a template any company can use: Most companies will execute “post-mortems”—focusing on addressing symptoms. In contrast, Amazon’s COE framework insists on identifying and eliminating root causes. The approach is grounded in one of Amazon’s core beliefs: Defects are inevitable, but allowing them to persist is a choice. Here’s how the process works: Step 1: Clearly define the problem and quantify its impact on customers and the business. Step 2: Use root cause analysis—typically the “Five Whys” method—to drill down until you’ve uncovered the true source of the issue. For example, if a package doesn’t arrive on time, the “Five Whys” works like this: → Why? Because Dayton Freight delivered the package to FedEx 2 hours after the cut-off time. → Why? Because the Dayton Freight truck left our dock 4 hours late. → Why? Because our picking team was 5 hours delayed. → Why? Because we had 30 pickers on the floor but needed 40 to complete the wave. → Why? Because we didn’t anticipate the spike in demand for products x, y, and z. Step 3: Implement corrective actions that *address the root*, not just the symptom. In the example above, this would be implementing a process to more reliably forecast demand and plan labor. Refunding the customer who got their package late is a band-aid not a cure. Step 4: Document and share the lessons learned—both the missteps and what the team did well. The most important part is then sharing the COE learnings across the organization. Amazon’s culture encourages surfacing errors with transparency so that the company as a whole can build stronger systems by learning from individual errors. The idea is that the whole organization learns from everyone’s mistakes. Visit this page on our website for a COE example (https://lnkd.in/gATUaj8B) and template (https://lnkd.in/gwFsWtMj).

Amazon's Prime Day, extended to a four-day event in July (July 8-11), aimed to address consumer uncertainties amidst tariffs and inflation while tapping into the back-to-school shopping trend. Despite a 14% decrease in sales in the initial four hours compared to last year, this shift signifies a change in consumer behavior and marketing tactics, offering valuable insights for brands of all sizes. 1) Extended Duration, Enhanced Flexibility: Amazon's elongated timeframe from 48 to 96 hours diminishes urgency but enhances flexibility. This shift provides consumers with breathing space amidst financial concerns, fostering confidence rather than FOMO. 2) Focus on Consistent Discounts: Despite a more measured approach, Adobe anticipates a substantial $23.8 billion in U.S. online sales during Prime Day. The emphasis lies on establishing a reputation for consistent value rather than sporadic price surges. 3) AI and Mobile Integration: With over half of Prime Day orders originating from mobile devices, supported by tech tools like Amazon's Rufus chatbot, the emphasis is on efficient, transactional experiences. Brands need to align their AI strategies with consumer needs for seamless interactions. 4) Rise of Competitors: Rival retailers like Walmart, Target, Best Buy, and TikTok have upped their game with concurrent or prolonged events, turning Prime Day into a competitive arena. Success lies in mastering omnichannel strategies that cater to diverse consumer preferences. Incorporate these strategies into your Growth Playbook for July: - Ditch short-lived promotions for sustained value offerings. - Prioritize meaningful AI integration for enhanced consumer engagement. - Monitor and adapt to consumer behavior in real-time. - Strike a balance between brand building and performance-driven initiatives for long-term success. In conclusion, Prime Day's initial sluggishness isn't a setback but a signal. Brands aligning with evolving consumer demands for flexibility and transparency will emerge victorious in the ever-evolving market landscape. Source: https://lnkd.in/g8Y7kG9v #amazon #ecommerce #startups #business #marketing Kara Reinhardt

I'm noticing once-thriving Amazon brands suddenly losing traction. Here are five common causes: 1) Focus shifts from brand-building to conversion This often leads to a decrease in branded search over time. Without strong branded traffic, they rely on non-branded searches, which typically performs worse, eating into ad dollars and profitability over time. Stopping tactics like influencer marketing or social media drives can have a noticeable impact on Amazon sales. 2) Assortment changes Rolling out a new product version and discontinuing the old one doesn't always mean success. New versions may lack the relevance or appeal of the original, which can lead to a drop in organic rank and performance. 3) SKU rationalization Brands sometimes cut SKUs to streamline their catalog, removing low performers. However, if not managed carefully, this process can lead to unexpected sales declines as valuable items disappear from the lineup. 4) Pricing issues If the average selling price in a category drops but a brand doesn’t adjust, it can create pricing gaps, making a once competitive product outpriced by the competition. 5) Increasing competition Low-cost, well-reviewed competitors entering the market can disrupt even established brands. If competitors invest in brand-building while others cut back, they’re likely to win out on Amazon and beyond, especially when they’re active on multiple platforms. If you see your brand losing traction but can't figure out the cause, this is where I'd start investigating. #ChannelKey #Amazon #Brands

Want to boost your Amazon sales? Start with your images. First impressions matter. And on Amazon, your images do the talking. Here’s how to make them count: 1. Multi-Use Call Outs: Showcase the versatility of your product. For instance, if you’re selling a laptop bag, highlight that it can fit both a laptop and a tablet. On the left side of your image, display the bag holding both devices. This visual cue is far more effective than just listing features in a subtitle. 2. Action Shots: Action speaks louder than words. If you’re selling a blender, show it in action blending fruits. This is more engaging than an image of the blender alone. People need to see your product doing what it promises. 3. Scannable Infographics: People don’t have time to read long blocks of text. Use short, punchy graphics to convey key benefits. For example, if you’re selling a smartwatch, create an infographic that quickly highlights features like "Heart Rate Monitor" and "GPS Tracking" with relevant icons. This helps shoppers quickly grasp the value. When creating these images, always ask yourself two questions: - Do shoppers care about these features? - How quickly will they understand them? If your images answer these questions effectively, you’re on the right track. 4. Main Image Props: Your main image should grab attention. If you’re selling a hiking backpack, add props like trekking poles or a water bottle to show its use in real scenarios. This not only makes the image more engaging but also gives shoppers a clearer idea of the product’s utility. Remember, your images are your silent salespeople. Make sure they are working hard for you. Want to transform your Amazon listings? Start with these image strategies. Experience the difference firsthand. #AmazonSales #Ecommerce #ProductMarketing

This year, Prime Day isn’t just a sales event. It’s a stress test for your pricing strategy. With tariffs tightening margins and consumer behavior shifting by the hour, brands can’t afford to “set and forget” their discounts. Agility is the new advantage. The ability to pull back on an underperforming offer or double down on a winning SKU could be the difference between a profitable promotion and a painful write-down. Amazon’s Dynamic Pricing allows brands to do just that, monitoring promos as they unfold and taking action based on whether they’re driving incremental lift or just eroding profits. They can double down on a hero SKU, selling out at smaller discounts, or roll back on another that’s barely budging at a steep price break. In this landscape, it no longer makes sense to look at Prime Days as one big sale. It’s more accurate and effective to treat it as dozens of live experiments running in parallel. If sellers are smart, they’ll use their findings to build a stronger, more resilient playbook for whatever comes next in this period of volatility.