NEWS

Exclusive: The key to maintaining profitability on Amazon

Published on: 9th May 2022

As more businesses shift trading to eCommerce marketplaces such as Amazon, understanding the cost is critical, writes Asha Bhalsod of Etopia Consultancy.

With minimal terms and limited costs, initially, Amazon was probably the most profitable account for many toy companies. Fast forward to 2022, and Amazon cares more about its Net PPM – more so than ever before. While you may have strong command of your negotiated coop terms and advertising costs, other Amazon-specific costs may be more challenging to track and minimise.

Throughout the year, Amazon will continuously ask for chargebacks, shortages, hard bundling or unexpected fees in one form or another. There will be cost price increases, requests to join new operational programmes and the cost of resources, to name but a few. Does your business know its true cost to serve Amazon?

Asha goes on to examine such factors as:

  • Operational Costs & Chargebacks
  • Amazon Cost Price Increases
  • Team of a labour-intensive account
  • Amazon Advertising
  • Cost of Content and Keywords

In summary, the Amazon platform is a master at disguising hidden costs. The true skill and success factor is empowering your business with visibility of these costs. Once you have this visibility, the strategy of investing and servicing Amazon as a platform becomes clear. The Etopia team is confident it will yield a more profitable account.

Etopia Consultancy challenges companies to recognise the full extent of the costs of dealing with Amazon, in order to best utilise the retailer as a profitable platform. Asha can be contacted on asha@etopiaconsultancy.co.uk.

To read the full article, which appeared in the May edition of Toy World, click here.

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