Amazon Vendor Negotiations: Safeguard Your Margins and Secure Stronger Terms

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5 Min Read | October, 2025 | BY Cihan Uzunoglu

How to prepare your Amazon Vendor Negotiations for 2026

The season for Amazon Vendor Negotiations (AVNs) is approaching, and this year vendors can expect less room for flexibility at the table. Amazon is tightening its focus on profitability, supply chain optimization, and efficiency. These priorities will shape the terms it sets for its partners.

With this shift, vendors will face tougher discussions centered on cost control and margin protection. So, what challenges lie ahead, and how can vendors position themselves to negotiate effectively?

Profitability Drives Negotiations

Amazon’s primary objective remains protecting its bottom line. Net PPM (Pure Product Margin) and operational efficiency will be the main focus areas this year. Vendors should anticipate limited willingness from Amazon to accept cost pass-throughs like inflation, freight hikes, or currency swings. As a result, suppliers may have to shoulder these costs or face penalties.

Historically, Amazon has delayed recognizing cost increases (such as US tariffs or EUR/USD changes in Europe) for as long as possible. To minimize risk, vendors should consider building expected costs into new item setup upfront, since retroactive adjustments are far more difficult to achieve.

The 3 Key Challenges for Vendors

Here are the areas where vendors are likely to feel the most pressure during Amazon Vending Negotiations:

Increased funding requests for co-op marketing, freight, and returns, all tied to Amazon’s drive for profitability.

CRaP (Can’t Realize a Profit) products will continue to be flagged, with non-profitable ASINs (Amazon Standard Identification Numbers) at risk of delisting unless additional support is provided.

Stricter OTIF (On-Time, In-Full) compliance and heavier chargeback enforcement, putting vendors with weaker supply chains at risk of steep fines.

These measures serve not just to protect Amazon’s profits but also to strengthen its cash flow. Depending on the circumstances, Amazon may emphasize growth, margin, or efficiency. But the end result is always the same: more demands on vendors.

That said, brands that prepare well can still unlock enormous growth opportunities by leveraging Amazon’s scale and reach.

Building a Strong Position as a Vendor

To navigate these negotiations successfully, vendors need to come prepared with data-driven strategies. One of the most effective tactics is presenting a detailed P&L (Profit and Loss) scenario to demonstrate how the proposed terms will influence overall profitability. If you are requesting price increases, reinforce your case with hard evidence such as rising supply chain expenses or shifting market conditions.

Understanding the factors behind Amazon’s pricing is equally important. ASP, Buy Box losses, competitor promotions, overstocks, and internal sellers all influence pricing dynamics. Lower prices can often mean higher sales, so vendors should weigh growth potential against margin impact. Aligning trade terms with Amazon’s growth programs (e.g., new launches, Subscribe & Save, or media spend) can help shift the discussion from cost absorption to mutual value creation.

It’s also critical to plan for escalation scenarios like stop-ships, delistings, or CRaP removals. Strengthening Amazon investments in areas like content, logistics, and customer experience, or even exploring models like FOB (Free on Board), can provide leverage in negotiations.

Operational challenges shouldn’t be ignored either. Data gaps, weak supply chain support, or systemic inefficiencies should be addressed within Joint Business Plans (JBPs). Demonstrating willingness to solve shared problems shows commitment and creates bargaining power.

Using Data as a Negotiation Tool

Amazon increasingly expects its vendors to be as data-driven as it is. Tracking and presenting KPIs is not enough. Vendors must frame their data in ways that align with Amazon’s goals. Key metrics to emphasize include:

Net PPM: The core profitability measure Amazon prioritizes.
Sales Velocity & Category Impact: Show how your products lift category performance, not just generate standalone sales.
Media ROI: With Amazon tying retail growth to media investments, demonstrating marketing effectiveness is essential.
Customer & Operational Metrics: OTIF rates, chargeback resolution, Subscribe & Save adoption, repeat purchases, and low returns all build trust and reduce Amazon’s risk.

Proving that your brand consistently outperforms benchmarks positions you as a valuable, growth-driving partner.

Amazon’s Main Focus Areas in 2026

Vendors should anticipate growing demands in several areas:

01.

Profit margin optimization through higher co-op, freight, and return funding.

02.

CRaP reduction to eliminate unprofitable products.

03.

Integration of media and retail, with trade terms increasingly tied to ad spend.

04.

Expansion of supply chain programs like Vendor Flex and Direct Import to cut inefficiencies.

Amazon is also expected to push vendors to assume more responsibility for inventory and adapt to its evolving logistics network, further reducing Amazon’s operational costs.

Turning Challenges Into Opportunities

Winning in Amazon’s 2025 Amazon Vendor Negotiations will require agility. Negotiations aren’t just about securing terms once a year, they’re part of an ongoing partnership. Vendors who maintain active communication with account managers, share business goals transparently, and stay adaptable throughout the year will be in the strongest position to succeed.

We help brands get ready for this process by aligning financial, operational, and media strategies with Amazon’s key priorities. If you want to protect your margins and build a stronger partnership with Amazon, reach out to us and we’ll make sure your brand is positioned to thrive in the upcoming negotiations.

About the author

Cihan Uzunoglu

Since February 2025, Cihan Uzunoglu has been part of Front Row, where he supports client projects through market and consumer research, blog content, and newsletter management. As a content editor and copywriter with a strong SEO focus, he transforms insights into compelling stories that engage audiences and deliver results.