Amazon Vendor Panel: Insights and Strategies for 2024

Vendors focus on internal setup and creative strategies to sustain margins on Amazon.

### Amazon Vendor Insights: Q1 2024 Review and Strategies for Success
* 📊 Amazon vendors have experienced a challenging Q1, with **increased competition, tighter margins, and rising advertising costs**.
* 🔍 Vendors need to focus on **long-term sustainability and creativity**, moving beyond **traditional optimization strategies**.
* 📈 Amazon has tightened criteria for onboarding new vendors, focusing on **larger, more established brands**.
* 🇨🇳 Chinese competition is increasing in **unexpected categories**, putting pressure on traditional vendors.
* 💰 Profitability remains a key focus for Amazon, with **strict negotiations and cost reduction initiatives**.
* 📱 While social media platforms like TikTok are growing in influence, Amazon remains a **crucial channel for product discovery and sales**.
* 🛒 Amazon's PO volumes have been **relatively stable**, with some adjustments in response to **working capital and inventory management strategies**.
* 🤝 Building strong relationships with Amazon vendor managers is essential, with a focus on **operational efficiency** and **commercial excellence**.

### Strategies for Optimizing Supply Chain Performance with Amazon Vendors
* 📦 Amazon vendors are encouraged to proactively address supply chain issues by **aligning cross-functional teams** and **investing in training**.
* 🏗 Training should focus on using Amazon's self-service tools effectively, as vendor managers are primarily for **escalations beyond self-service capabilities**.
* 💻 Understanding the ROI of Amazon Vendor Support (AVS) is crucial, with benefits including **improved issue resolution and account management**.
* 📆 Prime Day preparation should include **early stock planning** and focusing on **long-term growth**, not just **short-term POS increases**.
* Compliance issues, such as GPSR regulations, can impact listings and should be **proactively addressed with necessary documentation**.
* 🌍 Distributors should consider **expanding to new markets** to strengthen their Amazon partnership, as **global reach can be a key advantage**.
* 📊 Data-driven decision-making is essential for **optimizing off-Amazon traffic strategies** and **measuring campaign effectiveness**.
* 🛒 Bundling strategies should be leveraged to **create value for customers and increase net PPM**, especially with **Amazon-created bundles becoming more common**.

Amazon Vendor | Insights and Tactics to Shift Performance 2024

MerchantSpring

Panel Discussion: 2024 Amazon Vendor Strategies

The episode features a panel of Amazon vendor experts sharing their insights for a successful 2024.

The panelists have diverse backgrounds in e-commerce and offer a range of perspectives on Q1 performance and the challenges and opportunities for the remainder of the year.

The panel aims to provide clear and insightful answers to a wide range of questions from the audience, with a focus on practical tips for vendors.

Adapting to the Changing Landscape of Amazon Vending

Vendors are facing increased competition and narrowing profit margins due to Amazon's focus on profitability and rising advertising costs.

To remain sustainable, vendors need to focus on long-term strategies and creativity to adapt to the evolving landscape, including the use of video content and off-Amazon advertising.

Amazon's shifting criteria for vendor onboarding, growing Chinese competition in niche product categories, and changes in fee structures are posing additional challenges for vendors.

Amazon's Shifting Focus to Profitability and Operational Excellence

Amazon is now focusing more on the lower end of the market, letting other marketplaces handle the low-margin products and logistics through FBA.

Vendors are advised to compete on quality and selection rather than engaging in a price war with Chinese sellers.

Amazon is also prioritizing profitability, leading to more lengthy negotiations with vendors and a focus on operational and cost efficiencies.

Vendors will need to optimize their assortment, improve operational efficiency, and enhance distribution control to succeed in this new reality of trading with Amazon.

Amazon's Focus on Profitability and Vendor Relations in 2024

Amazon is aiming to improve its bottom line by reducing operating income losses and focusing on a more profitable portfolio of brands, which may weaken its long-term growth strategy.

The company is prioritizing cost reduction through negotiations with brands and a commitment to low ASP selection, while facing increasing competition from Asian rivals like teimo Sheen and Tik Tok shop.

Amazon's challenge for 2024 will be to balance its profitability focus with the need for sustained top-line growth, especially in the face of growing competition in the US and European markets.

Amazon Purchase Order Trends and the Impact of Social Media

Amazon has significantly reduced its weeks of stock cover, putting pressure on vendors, but the purchase order levels have gradually started to recover.

Younger consumers are not necessarily moving away from Amazon, as it still caters to all demographics and is a trusted and convenient online retailer.

The difference between shopping on Amazon and social media lies in the transactional nature of Amazon, while social media focuses on creating awareness and demand generation through engaging content.

Amazon Vendor Manager Negotiations: Navigating Cost Increases and Relationship Building

Vendor managers are now less likely to accept cost price increases, putting pressure on brands to negotiate better outcomes, especially for tier one managed vendor accounts.

Brands are also advised to be selective in onboarding products on Amazon and to focus on building strong relationships and effective training for a cross-functional team to drive mutual commercial benefit.

The vendor manager's role is shifting towards supporting vendors once self-service tools on vendor Central are no longer sufficient, emphasizing the need for vendors to proactively identify issues and present solutions.

Improving Vendor Relationships and AVS Negotiations at Amazon

Vendor managers need to provide more effective training and support to new vendors for a better relationship.

The worth of AVS should be determined by the benefits it provides, and it's essential to challenge and negotiate its terms for a better return on investment.

Renegotiating AVS terms to lower costs is possible but may be challenging, and there is a need for a clearer understanding of what AVS truly offers.

The Role of AVS and Vendor Specialists in Amazon Business

AVS and brand specialists have limitations in running ads, disputing chargebacks, and digging into operations, which vendors need to consider.

Vendors should analyze the cost and assess if the tasks can be managed internally before seeking the support of AVS.

Amazon-created bundles present an opportunity for vendors to boost their net PPM and should consider creating their own bundles to meet customer demand.

Driving traffic off Amazon to product display pages requires a clear strategy and a careful assessment of the potential interference with DTaC sales, as it depends on the brand's specific goals and the conversion rates of different traffic sources.

Driving Traffic to Amazon: Strategies and Considerations

Driving traffic to Amazon from different sources, such as influencers, requires a carefully planned strategy to ensure the right kind of traffic.

Utilizing Amazon DSP and conducting AB testing can help in leveraging off-site traffic and analyzing conversion rates.

The role of distributors in Amazon's relationship with brands is complex, with the company primarily targeting brands with multiple distributors, while still recognizing the need for distributors in certain cases.

Expanding Your Amazon Distribution to New Territories

Amazon vendors are encouraged to expand their business to emerging countries like Poland, Turkey, Brazil, Mexico, India, UAE, and KSA.

The company reassures vendors that strong partnerships and expansion into new territories will help them maintain their position within the system.

The discussion also covers EU compliances, the impact of non-compliant products on listings, and the importance of being prepared for listing suppressions.

Prepare for Prime Day by ramping up purchase orders and managing inventory to avoid supply chain strain.

Consider focusing on customer retention and acquisition, rather than just increasing sales volume, by leveraging Prime Day for new customer engagement.

Utilize a vendor Flex or D fulfillment setup to accommodate the expected surge in volumes and consider switching to Sell Central to alleviate the pressures of vendor Central.

Having foresight on stock, forecasting, and increasing stocking is crucial for preparing for the uptick in sales on Prime Day.

Prime Day not only boosts Point of Sale (POS) but also provides an opportunity to launch new products and improve their ranking.

It is important to be proactive and address any existing issues before Prime Day, as the event can multiply those challenges by 10 or 20.

Preparation and proactive planning are key to fulfilling the increased POS and mitigating the impact on the business.