Amazon Annual Vendor Negotiation: frequently asked questions
Preparing for your annual negotiation with Amazon can be a time-consuming process. It takes weeks to collect and analyze data, put together a strategic plan, and learn what you can about Amazon’s priorities this year.
We take care of your AVN analysis and insights. But developing your strategy also requires a blend of Amazon expertise with knowledge about your brand’s goals, resources, and strategy.
This year we’re helping brands get answers to their specific questions, live and anonymously, through our new weekly office hours series.
Weekly AVN Office Hours
Join us every Wednesday for live question and answer sessions with Amazon negotiation experts and former vendor managers. Then find recaps here.
Our panel of Amazon negotiation experts this year includes:
November 12, 2025 — Kara Babb and Nick Gezzar, Flying Tiger Partners
November 19, 2025 — Tom Jakab, Accenture Song
November 26, 2025 — Kari Hughes and Scott Van Der Woude, Global Overview
December 3, 2025 — Asha Bhalsod, Etopia Consultancy
December 10, 2025 — Kara Babb and Nick Gezzar, Flying Tiger Partners
December 17, 2025 — Ant Finch, Vendor Rocket
January 7, 2026 — Bruno Ferreira, Bluedot Ecommerce
January 14, 2026 — Trav Chappell, Venture Forge
January 21, 2026 — Jared Egge, Wave Commerce
January 28, 2026 — Bernard Bolisig, Upshift Marketing
1. Amazon Relationship Strategy
Why should we invest in VM/AVS relationships when they churn so quickly?
Amazon tries to be 100% rational, but VMs and your AVS/SVS are people with opinions and feelings that can impact your business. VMs have some discretion about where they spend time. Your AVS might be your VM or your Advertising AE someday. And everyone leaves a debrief doc for their replacement: what do you want that doc to say about you?
How transparent should vendors be during AVN? Does oversharing ever backfire?
Be very selective about what you share with Amazon; they do not reward generosity. Your VM will take any insights offered and happily use them to negotiate against you. Share your strategic plans (e.g. moving selection to SIOC) as contingent on receiving help (e.g. chargeback waivers).
Should we submit cost increases during AVN, or after?
While it can be beneficial to separate your cost increase conversation from AVN, prioritize starting the conversation with Amazon as soon as you know: this gives you and Amazon more time to plan. Emphasize the increase is going to all retailers.
Why does Amazon suppress ASINs as a negotiation tactic?
With some exceptions, Amazon would rather not sell your product, than sell it unprofitably. This might be surprising to brands that see Amazon price match a grey market offer below PO cost, then asking for a straight payment to bridge PPM. But Amazon is notorious for stopping ordering, suppressing product, and even advertising competing products at the top of your detail pages as a lever. In 2026, suppression is one of the vendor manager’s only levers to directly influence profitability, because pricing and ordering are completely automated.
Ultimately, you will benefit most by understanding—and solving—the root causes of unprofitable products, such as price matches (valid or not), operational issues, or distribution strategy. But smart brands will also use Amazon’s tactic and consider holding back or delisting selection to meet their own goals. You don’t have to wait for Amazon to CRaP out your products. Being proactive can help you understand Amazon’s preferred outcome.
2. Cost Prices and Trade Terms
How can I get Amazon to co-fund price promotions?
Yes, Amazon is sometimes willing to trade lower cost prices for an equivalent decrease in trade terms. To be successful with this strategy, proactively model the changes you’re requesting and their projected impact to your Net PPM. Make sure Amazon wins somehow, and help them understand how.
Always understand the goals of your vendor manager and your category, and consider how this proposal will impact those goals. If they have goals to increase specific terms buckets, it will be very difficult to reduce terms in those areas.
Be clear about what you’re trying to accomplish: “lower net costs help Amazon better manage market prices.”
Remember that increasing costs later will be just as hard as reducing terms.
Will Amazon trade lower terms, for lower cost prices?
It’s tough to get Amazon to fund price reductions, but you maximize your odds by:
Bringing a detailed, defensible deal forecast.
Being generous about the relative funding you provide vs. are asking Amazon for.
Bring additional levers like national media, PR, etc.
We signed a CSA in 2025. How can we avoid one next year?
Cost support agreements (CSAs) must be mutually agreed to; if you can’t support the request, don’t sign. If Amazon requires a CSA in response to your strategic need, try proposing:
A cap on the total value of the CSA
Shorter true-up period (e.g. monthly)
A specific list of ASINs to include
Shorter time frame (e.g. one quarter)
Amazon didn't spend our merch dollars last year. Why are they requesting more?
It’s a mistake to view merchandising accruals (e.g. 1% of COGS) as a spendable performance marketing budget with ROI expectations. Instead, think of them as another slotting fee similar to your base accrual: it’s part of the cost of doing business with Amazon, and gives both of you something tangible to negotiate.
Amazon and your vendor manager get the PPM benefit of your merchandising accrual whether or not the accrued funds were “spent.” That’s why they ask for more: they want to improve category margin and profitability.
3. Special Programs
How can I model the ROI of investing in programs like Baby Registry?
You can’t. Instead of sharing data, Amazon will share “proof of performance” documents every month or quarter. These documents have relative performance insights (e.g. your ASIN was in the top 10% most registered products in March), but no specific performance data. Think of these investments as “brand exposure” opportunities.
What are the pros and cons of pallet order programs?
Pallets are a win-win when used for high-volume products (e.g. 1 pallet every 1-2 weeks), even if they are seasonal. They’re ideal for reducing inbounding errors like shortage claims. Use them whenever Amazon’s kickback request (e.g. lower cost on pallet orders) makes economic sense for your business.
How should we view bulk buys as part of AVN?
Bulk buys are generally negotiated separate from AVN and approved on a case-by-case basis. Vendor managers will deliver a bulk buy request as a lower priority than PO cost reductions, funding increases, and other special program participation.
If you want Amazon to make a bulk buy, Amazon treats the incremental discount offer as the value of the bulk buy.
4. Retail Media Strategy
How can we leverage our media spend in AVN?
Always remember that Retail and Advertising have separate P&Ls, and your advertising spend does not “count” toward your VM’s profitability goals. But the more you can get Amazon competing with themselves, the better.
Amazon ads account executives have variable compensation (commission, bonuses) tied to ad sales goals. That means you have direct leverage with the ad sales team by making retail media participation contingent on achieving retail goals. “We are interested in this Prime Day activation, but...”
How can someone with retail media background prepare for their first AVN?
Again, keep in mind that Retail and Advertising have separate P&Ls, and your Amazon Ads and DSP spend does not “count” toward your Net PPM. It’s also important to remember that retail managers do not have performance-based variable compensation; they’re working for promotions, not bonuses.
But you can still leverage your retail media strengths, and drive coop ROI vs. PPC ROI conversations, especially backed by AMC analysis. Take advantage of your experience with advertising performance benchmarks, to ask hard questions about performance expectations for merchandising packages, event sponsorships, and more.
can we reduce coop accruals to spend more on sponsored ads?
This will be difficult because Amazon almost never decreases terms, and sponsored ad spend does not contribute to your PPM (or your VM’s P&L). You’re asking your vendor manager to accept lower profitability and get farther away from their goal. They need a reason to say “yes,” and increased advertising spend isn’t appealing to them.
Therefore, approach this through your Amazon Advertising account executive, whose goals and compensation are tied to your ad spend. Bring them into the conversation with your VM so they can advocate (internally, offline) for compromise outcomes that may allow you to move some budget.
5. KPI Performance Benchmarks
What is my category’s Net PPM benchmark / goal?
Approximate Net PPM benchmarks: Hardlines ~45%, Softlines ~39%, Consumables ~37%.
But remember that Amazon doesn’t consider these benchmarks and neither should you. Your VM wants to increase category profit by $X and will ask for it from anyone they think can/will pay it, no matter what your current PPM is. Advocate for your own profitability beyond PPM inputs.
Are there benchmark KPIs we can aim for, or are they always relative to peers?
Amazon only uses benchmarks that support their arguments, and will create new benchmarks as needed for negotiation leverage. Don’t assume that you have to conform, especially for non-financial requests like VLT and PO acceptance rates. Use the same strategy and focus on your own business and trends, especially if you can show improvement over time, incorporating benchmarks that strengthen your narrative.
When should we prioritize Amazon’s profitability (net PPM) over sales growth?
Amazon goes through cycles of prioritizing sales growth, then free cash flow (profitability), and back to sales growth. Heading into 2026 Amazon has prioritized profitability at the expense of growth. Even if a brand has big growth ambitions, Amazon isn’t interested in that narrative and is tightly focused on PPM improvement.
Outside of negotiation season, Amazon’s profitability is a “secret input” to the retail formula. Normally the formula is focused on traffic, conversion, and being in stock, but it assumes your catalog is profitable. Amazon has built mechanisms to restrict growth when the growth is unprofitable: your PPM is an input to Amazon’s consumer demand forecast and you will see your Retail Analytics forecast decline in response to sustained PPM drops.
6. Amazon Vendor Services, AVS, SVS
We pay 1% of net receipts for SVS. How do we evaluate the ROI of this investment?
Evaluate whether your SVS has been truly strategic: what ideas have they proposed, how did they help you understand the ROI, what were the incremental results of those investments? Were they focused on mundane tasks, or helping find and secure the right deals during marquee periods?
In absolute terms, spending $400-500K per year for AVS or SVS is not unusual. If you are paying a lower amount, your ROI might be higher than normal.
What should our relationship be like with our SVS manager?
If you meet with your SVS weekly, ask for a monthly sync with the manager so they are familiar with your growth levers. Understand when/how your SVS escalates to their manager, and when they both involve other internal teams. If you are not satisfied, request changes: escalation is a critical benefit of the program and your investment.
What strategic info and access can our AVS/SVS get?
Access to beta and limited programs.
GTM experimentation and coordination, especially for your off-Amazon efforts.
Additional data and reporting about your business.
Benchmarking and relative performance insights vs. your category peers.
How can AVS support our new product launches?
Start by asking for the basics: vine credits, free A+ Premium. Then consider more strategic requests, such as buying commitments / manual buying support. Show Amazon the carrot: willingness to invest in product launch merchandising, how you’re opening up a new category and helping Amazon grow, how you will drive purchasing traffic to Amazon.
Get your SVS and/or VM to make recommendations. Share your good/better/best forecasts for sales across channels, Amazon’s share, and what investments you’re considering. Then make that support contingent on Amazon’s mutual investment. Gently keep everyone aware that funding can be invested in Retail, Ads, or off Amazon depending on the ROI expectations.
