Amazon Vendor Negotiations: How to get the most out of your terms


February 23, 2022

If you’re a brand selling 1P on Amazon, you will be aware of Amazon Vendor Negotiations (AVN) also known as Joint Business Planning (JBPs). It’s an annual process where Amazon meets with Vendors to share a review of their previous year’s trading performance and proposes new trading terms for the upcoming year. 

Whether you’re new to the negotiation process or experienced, understanding how best to get the most out of your Vendor terms can be complex. Below we share our tips for successfully negotiating your Amazon Vendor terms.

1. It all starts with the customer

Above all, Amazon is a selling platform whose goal is to make money; and customer satisfaction comes first. Understanding and explaining how proposed changes in terms could affect customers on Amazon can help to validate your negotiations.

2. Preparation is key

When discussing your terms with Amazon, be prepared to provide results and data that help to prove the value that your Vendor account brings to the platform and its customers. In doing so, you will be better placed to negotiate the best possible agreement in the interest of both parties. 

3. Selection, selection, selection

Selection is king when selling on Amazon so determining which products from your catalogue you choose to make available should be strategic. Think carefully about maximising and using your product selection as a lever in your favour for example, offering Amazon exclusives or product bundles to create a unique selling point for your brand. 

4. Consider Amazon’s perspective

As part of the Amazon Vendor Negotiations process, your task will be to identify which terms suit your business and which may need to be renegotiated. Reviewing your contract holistically and proposing how new terms could affect Amazon’s bottom line can give you more leverage to negotiate with.  

5. Long-term decision making

Having a long-term understanding of the impact your newly negotiated terms will have on your business is central to achieving sustainable growth on Amazon. Remember not to feel pressured into closing quickly and prioritise your business’ strategic goals ahead of Amazon’s. 

Need help with your Amazon Vendor Negotiations?

Molzi by Brainlabs’ team is made up of Amazon alumni who bring unparalleled expertise when it comes to leveraging Amazon’s JBP process.

We offer consultancy support to brands looking to better prepare and negotiate their commercial terms and build on their understanding of these terms with Amazon. In return, brands are rewarded with mutually profitable growth paths on Amazon.

Download our free Managing Profitability on Amazon report for more tips on how to increase your Vendor margins, dealing with chargebacks and shortages and how to structure your Amazon business for success. 

Molzi JBP Consultancy - Get in touch

 

Laura Freeman, Head of Retail

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