Every year, Vendors face the same tough conversations: margin pressures, pricing battles and contract terms that don’t always seem to work in their favour. So if you’re preparing for your negotiations – or (worse) stuck in the middle of them, read on…
The reality of Vendor negotiations? It’s not just about the cost price. It’s about securing a deal that genuinely supports your brand’s long-term success.
Here are 3 steps to help you take control of talks instead of being dictated to.
Step 1: Know your Numbers
The brands that negotiate best are the ones that come armed with data, clarity and strategy.
Before you begin, make sure you:
- Understand your P&L right down to the SKU level – without this, you’re basically negotiating blind.
- Don’t just focus on the price you get offered, factor in the full package. Logistics costs, marketing support and payment terms are important too.
- Have a clear commercial strategy – exactly where does Amazon fit within your wider channel strategy?
Step 2: You don’t have to just take what you’re offered
Amazon’s Vendor Managers are trained negotiators, whose goal, first and foremost, is to get the best deal for Amazon.
So your approach needs to be commercially savvy – not reactive.
- Facing resistance on cost price increases? Don’t just back down – use your data to justify it.
- Amazon unwilling to offer better terms? Look for alternative ways to balance your profitability, like leveraging Seller or Hybrid models.
And if the deal just doesn’t work for your business?
Be willing to say no. Sometimes, walking away from a bad deal is the best move, long-term.
Step 3: Take Your Time
Rushed deals rarely fall in favour of Vendors. Many brands feel under pressure to get a deal done quickly, but the truth is that Amazon expects negotiations to take time – and so should you.
Successful Vendor negotiations involve:
- Meticulous planning. Know where you need to win and what you can trade.
- Internal buy-in. Your leadership teams need to grasp the nuances of Amazon.
- Escalation paths. You need to know when you can and should push negotiations higher up Amazon’s chain.
When brands rush to sign just to secure the next PO, they often lock themselves into terms they’ll regret later – remember, every negotiation provides a baseline for the next.
The Bottom Line
Just because Amazon is huge doesn’t mean you have to be a pushover.
Winning Vendor negotiations comes down to confidence, preparation and knowing when to stand firm – all things that our expert panel discussed in a recent webinar, where the lowdown included:
- How to secure a stronger bargaining position
- What to do when Amazon pushes back
- How to ensure compliance with your negotiated terms
Our dedicated Vendor team can help you get the best possible deal for your brand. Ready to talk? Get in touch today to learn more.