It’s the end of the year, and Amazon’s 1P vendors are preparing for their annual negotiations. Beginning in January, Amazon meets with its retailers to request a performance review and outline trade terms and regulations for the coming year. While these negotiations are lengthy, they’re crucial for establishing an Amazon partnership that can maximize brand performance on the platform.
There are a few key areas vendors should focus on to prepare for these conversations and ensure a favorable outcome. Here’s what you need to know to achieve success in 2023…
Since Amazon requires an aggregation of performance data at the start of each negotiation, brands need to assemble this data three to four weeks in advance. The most relevant information to have available is prior investments and the previous year's negotiation terms and agreements. Investments may include marketing and freight allowances or any advertising programs utilized in the past, such as Amazon Vine for exclusive buyers or subscribe and save initiatives.
So, how can you gather and evaluate these metrics?
Brands can utilize the sales, retail analytics, and operations reporting portals in their Amazon Vendor Central accounts to view internal data. To help you determine how the funds were utilized, it’s useful to consult with your vendor, finance, or strategic account managers and any additional team members to collect more comprehensive information, like damage allowances, ROI, and ad spend. These professionals often have insights into Amazon’s precise requirements, so you should remain transparent in your communication.
Once you’ve gathered the appropriate criteria, you can leverage them to prioritize your needs and determine the necessary investments for next year’s objectives.
As part of the planning process, Client Management Lead at Media.Monks, Megan Boyko, recommends adopting a holistic approach to optimize your budget effectively for the ensuing year. She notes, “we’re in an environment where inflation is on the rise and fuel costs are on the rise. So how does that play into your budget?” This means that your budget should incorporate both your brand and Amazon’s needs and priorities, market conditions, and competition.
The dynamic market environment directly impacts Amazon’s priorities and motivations. For instance, to offset shipping costs, Amazon may increase freight allowances. So, if you’re planning to launch new products in 2023, it’s beneficial to invest in that category accordingly. By considering how each factor affects the other, you can structure your budget to reflect the negotiating environment.
Negotiations are often difficult to navigate, as both parties face frequent disagreements and confusion. Aligning your internal leadership with Amazon’s management is essential to mitigate conflict. Each team member must collaborate with the corresponding role on Amazon’s team; for example — two senior account managers — one for each party. This ensures that both partners recognize and understand one another’s goals. By coordinating these partnerships in advance, you can foster a transparent and productive dialogue.
Effective preparations and strategic alignments cultivate mutually beneficial business partnerships and expedite the negotiation process, clearing a path for your brand to flourish in the coming year.
John Ghiorso is the Senior Vice President of eCommerce at Media.Monks, a global marketing services company. He is also the CEO and Founder of Orca Pacific, a full-service Amazon and eCommerce agency that brings cutting-edge strategies and managed services to over 100 industry-leading brands, including Reebok, Godiva, Levi, and Mars. The company completed a merger with Media.Monks in 2020.
In his role, John leads Media.Monk’s performance and enterprise teams which are composed of former Amazonians and top industry experts. With a decade of Amazon expertise, he has built a reputation for approximating industry reactions and forecasting shifts within Amazon’s marketplace. John’s insights have been featured in publications such as the Wall Street Journal, Forbes, Vox, and Modern Retail.
Amazon pioneered eCommerce and retail media, leading other retailers to follow suit. Yet, these platforms are becoming commoditized and competitive, so brands need to develop sound strategies to remain relevant. How can you optimize eCommerce and retail media to maximize profitability?
John Ghiorso warns against over-advertising on your website because it can diminish the customer experience by reducing site performance. Instead, he recommends establishing a unified retail media strategy that encompasses multiple channels. This entails collaborating with cross-functional teams and analyzing key KPIs to diversify your retail media budget, thereby increasing cumulative ROI.
Join Aaron Conant on today’s episode of The Digital Deep Dive as he welcomes John Ghiorso, Senior Vice President of eCommerce at Media.Monks, to address retail media trends and projections for 2023. John explains Amazon’s role in retail media and eCommerce, how to optimize ads on your eCommerce site, and the importance of developing a unified retail media strategy.
BWG Connect provides executive strategy and networking sessions that help brands from any industry with their overall business planning and execution. We network and knowledge share together to better understand and adapt to the newest trends, strategies, and pain points shaping growth in the digital space. BWG Connect, in conjunction with BWG Strategy, has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.
In addition, we have had 1x1 conversations with over 5,000 brands and have a real-time pulse on what digital strategies are successful and why. This in-depth knowledge allows our team to operate on the cutting-edge and provide our clients with best-in-class guidance on how to win in the digital world. We have provided free consultations and strategy sessions for companies of all sizes, from start-ups to Fortune-100, to enable growth, resolve issues and make curated service provider introductions that can impact your digital footprint.
We have held to the philosophy of providing high-level insights and actionable knowledge with no sales pitches in order to provide to our network the ability to listen, learn and act to improve themselves as well as their organizations. Our ultimate goal is to be the resource out there to help digital executives find the research they need to excel in the modern marketplace.
If you are interested in getting involved with any of our current or past events, you can find them here. If you are looking for help & would like to set up some time to chat with our team, you can schedule a time or reach out directly to Aaron@bwgconnect.com or Tiffany@bwgconnect.com.
John Ghiorso is the Senior Vice President of eCommerce at Media.Monks, a global marketing services company. He is also the CEO and Founder of Orca Pacific, a full-service Amazon and eCommerce agency that brings cutting-edge strategies and managed services to over 100 industry-leading brands, including Reebok, Godiva, Levi, and Mars. The company completed a merger with Media.Monks in 2020.
In his role, John leads Media.Monk’s performance and enterprise teams which are composed of former Amazonians and top industry experts. With a decade of Amazon expertise, he has built a reputation for approximating industry reactions and forecasting shifts within Amazon’s marketplace. His insights have been featured in publications such as the Wall Street Journal, Forbes, Vox, and Modern Retail.
The advancement of Web 3.0 brings about modern technologies such as virtual and augmented reality that will transform customers’ shopping experiences. So, how can you leverage these technologies to stay ahead of eCommerce trends?
According to John Ghiorso, one impending technology that has functional implications for retailers is augmented reality (AR) glasses. This device would provide consumers with 3D renderings of an item to influence their purchasing decisions. By developing a strategy that combines physical and digital stores for experiential involvement, brands can gather practical insights and data on each aspect of the customer journey.
In today’s episode of The Digital Deep Dive, Aaron Conant talks with John Ghiorso of Media.Monks and Orca Pacific about how brands can prepare for the future of eCommerce. John discusses Web 3.0’s technologies and their impact on consumer purchasing, how retailers can leverage AR to improve the customer experience, and the effects of technological changes on consumers and brands.
BWG Connect provides executive strategy and networking sessions that help brands from any industry with their overall business planning and execution. We network and knowledge share together to better understand and adapt to the newest trends, strategies, and pain points shaping growth in the digital space. BWG Connect, in conjunction with BWG Strategy, has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.
In addition, we have had 1x1 conversations with over 5,000 brands and have a real-time pulse on what digital strategies are successful and why. This in-depth knowledge allows our team to operate on the cutting-edge and provide our clients with best-in-class guidance on how to win in the digital world. We have provided free consultations and strategy sessions for companies of all sizes, from start-ups to Fortune-100, to enable growth, resolve issues and make curated service provider introductions that can impact your digital footprint.
We have held to the philosophy of providing high-level insights and actionable knowledge with no sales pitches in order to provide to our network the ability to listen, learn and act to improve themselves as well as their organizations. Our ultimate goal is to be the resource out there to help digital executives find the research they need to excel in the modern marketplace.
If you are interested in getting involved with any of our current or past events, you can find them here. If you are looking for help & would like to set up some time to chat with our team, you can schedule a time or reach out directly to aaron@bwgconnect.com or Tiffany@bwgconnect.com.
