On 29 February 2024, we gathered an expert panel of some of the biggest hitters in the Amazon Vendor space for a live discussion around the hottest topics for Vendors looking for growth in 2024 and beyond.
With specialist insights on everything from your first negotiations through to your must-have internal team structure; commerciality and profit growth to the worth of AVS (the Amazon Vendor Services team), this was an unmissable hour full to the brim with Vendor value.
But if you missed out, don’t worry!
Not only can you watch the whole event live on demand (click here), but we’ve also boiled down the best bits here for an easily digestible read you can bookmark and revisit whenever you need.
Let’s dive in…
But first – who was on our expert panel?
Alongside our very own Andy Banks, master of all things Amazon, our panel of Vendor heavyweights was:
Ant Finch, Founder of Vendor Rocket >
A Vendor expert with a profound passion for driving sustainable success on the Amazon platform, Ant specialises in supporting brands to break through to the next level of profitable growth.
Bruno Ferreira, Founder of BlueDot Ecommerce >
Bruno is a time-served Vendor expert with proven expertise across all things Vendor Central for brands, manufacturers and invited distributors, who works with a 100% focus on a client’s internal setup to help to align the entire back-end of a Vendor’s Amazon process for optimal efficiency and profitability.
James Wakefield, Founder of WAKE Commerce >
With years of experience in unlocking brand potential on Amazon Vendor Central, WAKE works with consumer brands, typically existing Vendors, who have reached a certain level and are seeking support to drive the channel forward.
Matt Briggs, Senior Account Manager at Venture Forge >
Last but certainly not least, Matt is another brilliant member of the award-winning Venture Forge team!
Working with Amazon Vendor for the last six years, Matt has experience across distribution, direct to manufacturer and now as a Senior Account Manager with us.
Focusing predominantly on Vendor Central, overall strategy and how to grow an Amazon business with a medium to long-term view, he’s extremely well versed in driving success for Vendors of all shapes and sizes, from multi million-pound consumer electronics brands to ambitious startups.
With a mix of pre-prepared points and live submissions from our webinar audience, the team got through an impressive amount to say they had just 60 minutes at their disposal!
And it’s a good thing too – as we often do, we started the webinar with a poll asking our audience how far along they are with developing their 2024 brand strategy.
With less than half of participants well into the planning process and beyond, the results made for intriguing reading – and are the perfect illustration of how many brands are still open to adapting their Vendor strategies as we learn what’s needed to thrive in this challenging new Amazon world.
Let’s crack on with the questions…
Question One – “How do you see Vendors setting themselves apart in an increasingly competitive marketplace”
We started with a biggie! After a fair period of easy growth on Amazon, there’s no doubt that the landscape has tightened and changed as the fast commercial rides of Covid and inflation have eased off.
For Ant, there are three core focus areas that will help a Vendor rise above the competition.
“The first is that it’s impossible to scale up and run with a one-person team,” he explained.
“If you want growth, you’ll need to expand your internal resource.
“Secondly, you need to be continually optimising your content. The days of FMCGs updating their listings once a year? That’s the old world.
“Make use of seasonal content to see big improvements in conversion rates, taking a proactive approach to all relevant events – Mother’s Day, Valentine’s, Easter…”
“And third, using Amazon-specific products, products you list exclusively on the marketplace, that hit a price point and margin expectation you can get behind and optimise performance?
“They can be real game changers for brands.”
Andy and Bruno were strongly on board with point one.
“Something that’s interesting is we hear so many times, “I have a person doing Amazon”” said Andy.
“And then we look at the skill set that’s involved in doing Amazon and it’s not just demand generation; there’s content skill set, there’s design, strategy, advertising…
“Then you drop into Bruno’s world of operations and back of house and there’s an entirely different skill set again.”
It’s so important, that cross-functional team,” agreed Bruno.
“Your need to have specific skills across sales, logistics and finance – and the success of the Vendor lies in them each having a strong understanding of their own silos and the communication between them.”
SECTION SUMMARY
- To grow with one person is impossible, you need a cross-functional team covering sales, logistics, finance and commercial.
- It’s crucial to continually optimise your content, and make use of seasonal content to improve conversion rates.
- Using Amazon-exclusive products can be a real game changer for Amazon Vendors.
Question Two – “Is negotiating with Amazon still a key pillar for Vendor success? Is there an opportunity that lies in a Vendor’s strength of negotiation?”
“One point we haven’t called out talking about team structure is the commercial side,” said Andy.
“Is negotiation still an opportunity for Vendors to set themselves apart?”
“Absolutely,” agreed Ant.
“Many Vendors start out and list all their products – not a lot of commercial thought goes into that.
“I’m a big believer in needing a really clear margin and sales target going 3, 4, even 5 years ahead, and everything you do has to be informed by that target.
“If a product’s not delivering to your topline sales, don’t launch it. Be very clear about adding the things that will bring you value.”
Matt also flagged how crucial it is to get the negotiations right from the start.
“It’s key to take a measured approach from the very beginning.”
“Lots of vendors commit to terms they don’t understand and then they’re fixed in their account.” he explained.
“Great point – your first terms are always the basis for the next ones, so it’s so important you establish good terms then next year you’re in a better place to negotiate,” added Bruno.
“If you don’t have experience, get support from experts.”
“Amazon can be quite good at bamboozling Vendors during the onboarding phase – there’s so many acronyms and programmes and trade terms,” added James.
“It’s very rare a Vendor is sophisticated enough, and Amazon are quite ruthless and experienced at taking advantage of that lack of knowledge, so having a team behind you that understands the negotiation process is crucial.
“Go in blind and Amazon wins.”
“It’s like a poker game,” agreed Bruno.
“If you’re playing an expert without knowing the rules, you’ll lose.
“It’s not like managing eBay or an online shop. Look for talent internally and, if there’s no-one, search outside your business.”
SECTION SUMMARY
- There’s a huge opportunity in your Vendor negotiations – but you need to get them right from the very beginning.
- Be commercial – only add products you know will bring real value to your topline.
- If you don’t have strong experience in and understanding of Vendor negotiations internally, get support so you don’t get railroaded into terms that don’t work for your brand.
Question Three – “Given the importance of getting those commercial terms right, what are the key parts to focus on to get real value?”
“The key is knowing what you want to achieve in terms of your long-term strategy,” explained Matt.
“Your terms should be specific to your brand – for example, if returns are a particular issue to you internally, include a damage allowance.
“Take the time to look at everything and follow the data. You don’t need to rush into any decisions or agree to anything blindly.”
“A Vendor needs to go in with an open mind, but fully understand what Amazon is offering them before they pass judgement,” added Ant.
“AVS can be interesting for brands if used correctly, but you need to dig into what it will do for you, how it will work, how you will manage it internally and will it definitely add value to what you’re doing.
“Amazon will always find ways to take your money – you have to make sure you’re investing in the right areas to boost your profits and sales growth.”
“Ask for something in return, don’t just give. You have to remember that Amazon’s vision for Vendor Central has always been about long-term partnership,” said Bruno.
“It’s a “we” relationship.”
“I think sometimes people confuse what Vendor is,” said Andy.
“Don’t miss that, at either end, it’s just two people – one selling, one buying to sell on.
“You can get wrapped up in the platform and the acronyms and the negotiations – but it’s about creating a holistic, long-term partnership.”
“And document everything!” Ant finished.
SECTION SUMMARY
- Know what you want, look at your data and don’t rush – there’s no need to agree to anything blindly.
- Have an open mind and take the time to completely understand what Amazon is offering so you can ensure you’re investing in the right places.
- It’s a B2B relationship for the long-term, so don’t just give. Ask for something in return.
- Document everything!
Question Four – “How important is regular content and catalogue management?”
Next, the panel moved on to the strategies needed to deploy, manage and maintain a successful Vendor catalogue.
“It’s not just a case of upload and go!” began Andy.
“The first port of call for brands on Vendor is Brand Control – understanding what’s happening on Amazon with their products already,” agreed James.
“Because Vendor is invite-only, with criteria that have been tightened, it’s full of established consumer brands available in the wider market.
“And inevitably, with those types of brands, Resellers get hold of their products and list them on Amazon before the brand has properly engaged with the channel.
“These Resellers aren’t invested in the brand, they’re out to make a quick buck, so you find lots of illegitimate listings, duplicate products, random bundles and rubbish content to deal with.
“Then you move to product selection.
“Your catalogue might be in the 1,000s, but only 20 products are pushing your sales – you won’t flourish if you go in blind and just list everything.
“Understand what your top sellers are, focus on them and invest in Amazon specific content with keyword research.
“Then it’s the creative aspects; imagery, graphics, A+ content, Storefronts – they all contribute to the buyer experience and increase conversion rates.”
“Your hero products are so important, and so many brands miss that opportunity,” added Andy.
“We had a client looking at uploading 50,000 ASINs – it’s not commercially not viable to run on that level.
“Start at the top level and ask “Where’s the opportunity? Where should I focus?”
SECTION SUMMARY
- Vendors should begin with a brand control exercise that seeks to understand – and manage – what’s going on with their products through Resellers on Amazon already.
- Be choosy with your offering. Identify your hero products and put your full focus on them – don’t just upload your entire catalogue.
- Invest in Amazon-specific content, and make sure every element is properly – and regularly – optimised, from keyword-rich copy to imagery; A+ content to Storefronts.
Question Five – “How important is Category Awareness to Vendor Success?”
Getting a real sense of what’s going on in your category can be tough on Amazon – the marketplace is renowned for being something of a closed book. But our panel was fervent in the importance of gaining proper market context…
“You need to know “what’s the size of the prize?” And importantly, how your brand is tracking within its own segment.” explained James.
“My background is working in trade, and so we always start with the market data,” agreed Andy.
“Sales might be high but if you’ve shrunk in comparison with the market, that’s terrible.
“Market context is fundamental to what your strategy should be.”
And this is where you really need an Agency – here’s why…
“Helium 10 can give estimates, but it’s no good for the big picture,” explained James.
“If a brand wants to fully understand a segment, its 12-month growth, who’s dominating and where they slot in, the only way to do that is through some pretty expensive, enterprise-level tools, and it’s only practical for Agencies to have those subscriptions.”
“Yes, it’s easy to miss this part of where an Agency adds value,” agreed Andy.
“It’s not just in the resource and expertise, it’s also the capability and tools.”
SECTION SUMMARY
- It’s crucial to your success and strategies to have the right market data at your fingertips.
- But the tools that give you the data you need are very expensive – and this is an often-overlooked way that using an Agency brings true value.
Learn how Venture Forge can help you supercharge your Amazon Vendor strategy
Question Six – “How can you ensure you’re not leaking profits from your internal operations back-of-house?”
Having talked a lot about the commercial side of Vendor, the team wanted to move on to the slightly less sexy question of improving internal ops efficiencies to plug any leaks and maximise profits.
“It all starts with your Amazon Vendor cross-functional team, even for smaller Vendors,” said Bruno.
“From defining that team, very strong, compliant operating processes are key.
“You need constant performance monitoring, evaluation and improvements – what you implement now might need to change in 6 months.
“And use your partnership to leverage better service, for example, if you identify particular Fulfilment centres that are producing higher charge rates, escalate with Amazon.”
But how do you evaluate and improve your internal processes to save on charge rates that eat into your margins?
“Start by analysing small details, from your preferred carriers across international locations to how your warehouse team is working – are they picking and packing to Amazon standards?” explained Bruno.
“Amazon Fulfilment centres are very picky, so this is one key to avoiding charge rates.
“Everyone needs to get outside of their silos talking the same language – if accounting notices a deduction, there needs to be a smooth process in place to flag with others.
“Many charge rates are not recoverable – so use them as a mark that you’ve an internal issue you need to fix.”
And if you’re surprised to find that lots of chargebacks can’t be recovered, you’re not alone.
“On chargebacks, the whole Vendor space seems to be full of businesses that get chargeback fees back for a percentage,” said Andy.
“Yes, Vendors see it as better to have a percentage of something than 100% of nothing,” agreed Bruno.
“But you can only recover a minimum percentage of charge rates – they were created to warn Vendors that something was not compliant with their model.
“So adapt for something you can’t recover – address with your internal team and discuss, “what’s causing this, how can we address it?”
“It all leads to Vendors needing to be in the detail on everything, front and back end,” adds Ant.
“It will normally be a handful of hero products driving shortages or chargebacks.
“Set up a team and give them the KPIs to manage those levels – it has to have a smart measure attached to it.”
“So many brands are using those no win, no fee businesses, but that’s still a hell of a lot of money left leaking from a brand’s P&L,” agreed Andy.
“If you plug the leaks, it stays in your P&L from the outset.”
SECTION SUMMARY
- Through a process of continual evaluation and adaptation, improving the efficiency of your internal processes is key to your brand’s profitability.
- It’s all about plugging efficiency gaps that are negatively affecting your P&L. Use chargebacks as a red flag that something needs fixing – don’t just rely on getting a small percentage back through a no-win, no-fee service.
- Smooth communication between your entire internal team, ownership and smart measures are crucial factors in ensuring maximum efficiency in your back-of-house.
Livestream Question One – “What is a must-have team structure for Vendors starting out?”
With massive engagement coming from our live audience, Andy opened the floor to questions from the livestream! The first was all about creating the perfect team for new Vendors on Amazon…
Back-of-house expert Bruno recommends that even small vendors need people specialising in:
- Sales – commercial, data analysis, strategic thinking.
- Logistics – to help connect with carriers and the warehouse team.
- Finance – who receives intensive training on amazon payments and deductions, damage allowances and provisions and how to manage them.
“They all need to be aligned – trained individually, but taking the same language,” Bruno added.
“And they all need to know their individual responsibilities, with weekly, monthly, quarterly tasks assigned.”
For Matt, any size of team needs someone covering:
- Operations
- Regular content reviews
- Paid ads
- A commercial focus, like an Account Manager
- Finance
And Ant added a fundamental point.
“Education is crucial – how you walk and talk on Amazon feels different.
“You need colleagues across all departments, and they all need to understand how Amazon works too – there’s no “why can’t we get Amazon to do it this way?”
“You have to work within Amazon’s process, they won’t adapt – so you have to have that learning across multiple departments.”
“That’s so important,” agreed Bruno.
“At C-level too, it’s so important they have training for a deeper understanding of what Vendor is and how it works, and Vendor compliance and how it works. The C-level team must be on board.”
SECTION SUMMARY
- The perfect team for a Vendor of any size needs to cover:
- Sales – commercial, data analysis, strategic thinking.
- Content and paid ads.
- Logistics – to help connect with carriers and the warehouse team.
- Finance – who receives intensive training on amazon payments and deductions, damage allowances and provisions and how to manage them.
- All Vendors need to educate colleagues across all departments, to ensure buy-in and understanding right up to C Suite – because the way Amazon works is different, and they won’t change it for you.
Livestream Question Two – “What are your thoughts on AVS Specialists? Do you think they’re worth the cost associated and what should you be getting from it?”
“This is a hot topic in the Vendor space!” began James. “The biggest misconception of AVS is that it’s an account management service, but it’s not.
“It can be very expensive – 3-7% as a contracogs agreement. Personally, we use AVS as a point of escalation, a last resort.
“We do 99% of the work, because AVS won’t help with your marketing etc. But it does open doors to certain things, like deal placements.
“We question the value of it too,” agreed Andy.
“It’s a very, very hefty fee, and what’s an Amazon employee’s motive? It’s to grow Amazon, not your brand.
Beyond using it as a point of escalation, AVS doesn’t do anything an internal team can’t do.”
But Andy knows that Ant has a slightly different take.
“If you pull your AVS service, Amazon will look to recoup that money somewhere else,” said Ant.
“Strategically, when you get to a certain size or visibility globally, you’ll have to put it in place anyway.”
“And my experience has been generally positive, but I approach AVS in a different way.”
All agreed the key lies in not relying on AVS – or your Vendor Manager – to grow your brand.
“When they’re selling the service, it’s almost like they’ll help you grow your business.
But no AVS specialist – or Vendor Manager – will do this, that responsibility lies with you.” explained Ant.
“You need to know why it matters to you. If you feel they’re driving the agenda, switch it round – if the ROI isn’t there, challenge it.”
SECTION SUMMARY
- AVS – or your Vendor Manager – won’t grow your brand; they work for Amazon, not you. The responsibility for growth lies with your business.
- It’s expensive, but it’s possible that removing it would see your costs rise elsewhere.
- The key to using it effectively if you choose to do so is to know what you want from AVS in terms of agenda and ROI, and challenge where you need to.
- If you are, or you hit, a certain size, it’s likely Amazon will insist you use AVS.
Livestream Question Three – “What are your views on Amazon’s clear change in strategy to be more profit-led in 2024?”
As Andy said, “I really think this question summarises almost everything we’ve said! Amazon is clearly moving to be a much more commercially focused business.
“You look at where they’ve come, through Covid and inflation with easy top line growth – how does it maintain its share price and revenue and profit growth over the coming years? By becoming more profit-focused.
“At the heart of it all is the commerciality question – how do you build a commercial Vendor business.
And what we’ve heard here is that, from the top of your funnel – ads, marketing, content, growth services – to the bottom of the operational part, you have to be looking at this commercially; terms, plugging profit gaps, the right range selection, the quality of your content…
“If you’re concerned about Amazon’s focus on profit?
