Overview
This session was recorded as part of the Amazon Vendor Summit on Day 1. In this session, Martin Heubel, Founder of Consulterce and former Amazon Senior Category Manager, breaks down what top-performing vendors do differently in Annual Vendor Negotiations (AVNs). Drawing on firsthand Amazon experience and fresh industry data, Martin explains why Amazon’s profitability focus isn’t going away, how net PPM distorts negotiation dynamics, and what brands must do to protect margins without sacrificing growth. The session delivers practical frameworks for anchoring negotiations, quantifying Amazon’s operational shortcomings, aligning cross-functional teams, and proactively shaping AVNs—rather than reacting to Amazon’s demands.
Session Transcript
Paul Sonneveld
Let's really jump into our first session here. With me today, I have Martin Heubel. Founder of Consulterce, a leading voice in the Amazon 1P space. Now, many of you know Martin spent several years at Amazon in Europe managing key vendor relationships, and he is here to share what winners do differently in AVN negotiations. Expect plenty of sharp, field-tested pointers you can take straight into your 2026 planning. Martin, it's great to have you. Welcome.
Martin Heubel
Hi, Paul. Thank you so much for having me. It's really a pleasure to rejoin the stage at the Vendor Summit. A very exciting lineup. I think a lot of things have changed since we last spoke. And of course, for any of us or a few joining us today, we will have seen that there's certainly more and more that Amazon is throwing at brands like ourselves in vendor negotiations and our typical conversations that we're having with them.
And so it's ever more important to really look at what is really happening behind the scenes. Why is Amazon still focused so much on profitability? And more importantly, how can we ourselves position us in the best possible way to first of all, prepare for these increasingly tension-full becoming discussions and also safeguard and protect our own profitability while not disrupting our sales growth? Considering that Amazon remains one of the kind of key channels for our brand and our brands to generate volume growth in 2026 and beyond.
So without further ado, let me share my screen. I should be able to see it by now and we'll dive right into it. Just before we go into the content, a few words about myself. For anyone who doesn't know me, my name is Martin Heubel.Used to work as a vendor and then senior category manager at Amazon here over in Europe in various product categories, such as home housewares, but then also in the consumer products space, particularly in grocery. Before, around five years ago, I then transitioned into my role as an independent consultant, now helping first-party vendors really kind of address all of these commercial challenges that they're facing with Amazon on a day in and day out basis. And yeah, when we are talking about annual vendor negotiations, one of the things that I always encourage brands to look at is at the wider context, right? So in which kind of commercial context are we currently negotiating, and what has really happened over the last few years?
Specifically, in 2025, when we polled one hundred eighty vendor representatives about their experience on vendor negotiations. A staggering seventy one percent cited some form or degree of challenges during their vendor negotiations and if you've ever heard the kind of, yeah subject from your leadership teams saying to you, hey please just kind of get the negotiation out of the way don't, disrupt your sales don't disrupt our margins and kind of to avoid some kind of trade disruption. Well, then you'll probably have vastly disappointed your leadership teams. But I can assure you that this is more the standard and the norm with vendor negotiations on average lasting around three and a half months.
So the expectation that we can just brush off our vendor negotiations very quickly, sometimes it works, but the majority of brands actually are facing more prolonged challenges, more prolonged discussions. And as a result of that, Amazon has become very good in pushing through their own negotiation narratives and also their negotiation demands. On average, Amazon achieved a plus ninety one basis points increase in their trade terms. This follows last year in 2024, where Amazon on average increased trade terms by sixty nine basis points.
So clearly, Amazon is doing something right. And clearly, the growing dependency of a lot of brands on Amazon as a gross channel is taking its toll. Now, the average trade term basis now sits at around nineteen percent. And out of all of those brands who participated in the survey and study that I conducted together with Russ Dieringer and Claire McBride from Stratably, we saw that half of all brands actually highlighted that those AVNs have a negative impact to their Amazon margin.
But we also saw that the majority of brands actually says, hey our margins with amazon are still more favorable compared to other retailers so they're still fairly profitable as an overall customer for us. Now this points us to a couple of challenges. First up, that there's growing dependency and amazon can lean in into this trade relationship quite a lot fifty percent, so one in two vendors, actually saw punitive measures being applied as part of their vendor negotiations. So vendor managers are certainly becoming very progressive in getting their demands heard from vendors.
On the flip side, even though that vendors have to make concessions, they still feel that Amazon is fairly favourable, yet a very complex becoming retail customer. And we can see when we're looking at how complex this retailer really is when we are looking at just the different touch points that Amazon affects these days in our own organisations. Specifically, if we've been tasked to improve the margins for the customer Amazon, you will quickly realise that your sales operations team will not necessarily be able to shoulder the target setting and the target achievement all by themselves.
In effect, you will have to have a very cross-functional alignment with your media and marketing teams, your logistics teams, your finance teams, in order to really understand, first of all, what is the total cost to serve Amazon, first and foremost. But then second of all, also, how do our brand and marketing strategies play into our portfolio mix strategies? So are we activating the right type of products? Or do we actually see that potentially we are creating our own margin headwinds by leaning in too much against products that, yes, make sense from a traditional national price promotional activation point of view, but no longer when we are actually trying to SKU attention from end shoppers towards items that are profitable for us? But also increasingly profitable for Amazon so that we can avoid any type of sales suppressions. In the world of Amazon, this often refers to CRaP or an item that cannot realise any profit, which then often sees also restrictions and suppressions in its buy box.
And so if you're really zooming out for a second and you're looking at improving our margins with Amazon as part of our vendor negotiations, I always encourage each brand to look beyond just the sales operation team and really make brand marketing, but also the logistics and finance team part of the equation and being a real proponent internally in your organization about capturing the kind of pain points, capturing the process bottlenecks, that each of those teams experience on a day in and day out basis so that you can also come prepared into your vendor negotiation and highlight where there's potential opportunity to grow the account going forward, but where there is also opportunity to potentially hold Amazon's own shortcomings to the vendor manager and to hold them account to account for that.
Now, what I just said is really encapsulated on this chart here. And it particularly means that if you're facing constantly certain pain points with Amazon, let it be the late order placement, or let it be a very late setup of a certain Prime Day deal, for example, because our AVS just didn't get to it, or because we do not have really access to a very good buying forecast. And there's simply just an erratic behaviour from an ordering standpoint from Amazon.
This typically translates in most offender negotiations that I'm seeing into anecdotal complaints that we will be tabling to our vendor manager saying, hey, we lost a lot of volume. We lost a lot of margin opportunity because you didn't place these orders to us. But what I would really encourage each and every one of us listening today and watching today to conduct as an exercise internally is to just start with a simple Excel sheet capturing throughout the months of 2025 and then also in 2026. All of those little pain points and process defects that have led to either an impact on your top or bottom line.
Now, when we're looking at, for example, the first ideation or example here, the late order placement, because we didn't have access to a good forecast from Amazon and AVS potentially also didn't help us to get a better understanding of how much volume is to be ring fenced for them for an upcoming Black Friday or Cyber Monday event. We typically understand how much volume was impacted by it. So if Amazon placed a larger order and we didn't have the volume ring-fenced available, we can say, OK, maybe a thousand units were impacted by this that we couldn't necessarily sell to Amazon. For each of those units, because also know at what value, at what cost price, we're selling this product to Amazon.
So we know what ship cost value, so to say, those impacted units have. And we also know at what net PPM these products that were affected by it stood at. So we can do two things. We can highlight to Amazon on the first end, look, we actually lost quite a significant amount of top line growth because of certain process shortcomings. But on the flip side we also saw that your net ppm was actually quite impacted by it leading to the result that you yourself were missing your net ppm targets and now you just want us to kind of compensate you for that even though the process error originated in a lack of the adequate avs support that we expected from you.
Now, what this exercise allows you to do is really to capture all of those process defects, pain points, however you want to call it, throughout the year and to put a number against it so that we do not have to rely against anecdotes or rely on certain statements of what we feel is unfair, but we can actually quantify it and highlight to Amazon, hey, these issues really kind of impact our joint process development and business development. And it also helps you to really formulate more concrete asks that you would like to get out of the AVN at the same time.
For example, hey give us monthly forecasts for those deal events give us an order volume commitment at least sixty days before the deal is actually executed even though amazon may not always be able to kind of accommodate those requests it positions you very strongly to actually get your demands heard on the one side, but also to kind of hold Amazon accountable for their own shortcomings, eroding the kind of narrative that they're starting and trying to put onto you by saying, hey, you didn't receive or achieve your net PPM target. And now it's time to kind of give us some form of margin support.
And this positioning is really what separates those brands who are getting out of vendor negotiations what they want, compared to those who are very reactive, compared to those that are just wait and see what Amazon presents to them and then finding themselves in a pickle because they're having to retract and they're having to actually try to defend themselves.
It's much better in any kind of vendor negotiation situation to be very proactive, to actually set the frame under which you're willing to negotiate. And thereby, we also need to mirror the kind of way that Amazon often itself negotiates. They're having very bold targets. They're anchoring your teams, your sales operations teams, at their best case negotiation outcome, which explains why they're asking often for cost price discounts, for trade term increases, all the while keeping you accountable to their artificially set net PPM targets, to which we'll come in a second.
So the question here is, how should we open our negotiation? If our minimum negotiation target is what we're seeing here on the left-hand side of this chart, maybe to secure a ten percent growth in 2026. And we want to maintain our trade terms, so not increase our exposure and investments next year. What is the best strategy to table our opening offer to Amazon? Should we just be very open and transparent about this? Or should we potentially tell Amazon that we only want to achieve let growth next year so that we then can achieve more without having to pay for it?
Now, especially the letter logic, is to a certain extent flawed and deviates from the way that we are conducting and may conduct business with other retailers. But if you are having to achieve a ten percent growth target next year, my recommendation is not to communicate to Amazon that you actually expect just a flat growth. The reason being is that if you are then growing by actually five, seven, eight percent, your vendor manager is very much incentivized to introduce friction into your overall vendor business. Could be buy box oppressions, could be CRaP, could be other mechanisms that are designed to slow your growth because your vendor manager feels that if you're outgrowing the originally set growth ambition in your vendor negotiations, they are not equivalently participating in it.
Because once again, Amazon particularly looks at a relative net PPM, not at its absolute cash margin. So what we need to do from a positioning perspective in our kickoff meeting and in the early stages of our vendor negotiation is actually the counterintuitive. Anchor them at a fairly high ambition when it comes to your growth. So if you're having to achieve ten percent, well, maybe anchor them at fifteen or twenty percent growth so that if your vendor manager then reveals their cards and says, OK, for this twenty percent growth, I require two or three percent more investment from you. Your brand teams can actually retract and say, this is way too expensive for us.
Let's maybe just agree it's on fifteen or ten percent in growth, but in exchange for a much lower investment as well. It helps you to force Amazon's hand and to call their bluff whenever they're putting a very high price tag against an inflated growth figure that you have communicated in the first place to them. Again, the positioning strength is defined by your opening offer. So do not undersell the value that you bring to the table and do your homework. Be aware of how much market share you have and how your visible share on the virtual shelf has improved, declined, or been flat over the last six to twelve months. And base your negotiation story based on your best case scenario here.
The second part that increasingly concerns vendors is Amazon's net PPM focus. And it's clear that net PPM is and forms and continues to form Amazon's North Star metric in vendor negotiations also in 2026 and beyond. Now, a lot of us really have expected Amazon to finally retract and to let go of its profitability focus. We've seen more muted volume growth as incoming US tariffs were certainly unfolding. New challenges for consumers. Discretionary income is not necessarily on the rise, so shoppers are becoming more value oriented and benefit seeking. But that doesn't mean necessarily that Amazon says we are just focusing on growth now.
In fact, for 2026, Amazon is expected to balance its growth with profitability ambitions. So while we'll see a softer stance on profitability, it's not going to go anywhere at all. And that means that vendor managers typically will continue their conversation about net PPM targets. Which means that we also have to critically ask ourselves, is this the right metric to actually lead and lean the negotiation on? Because net PPM is significantly flawed as a KPI when you're looking at what it actually entails. And when you're also looking at what actually sits below it, when we're talking about all of those elements that we may have been actively improving on, for, and with Amazon.
Examples include, you may have actually launched a direct import, a vendor flex or other supply chain initiatives designed to reduce the cost footprint both for yourself but also for Amazon in the storage or variable handling and shipping costs. You may have launched products that are frustration-free in its packaging or ship in their own container. Or you may have actually improved your product detail page content, which have improved conversion rates but reduced the actual number of customer returns.
Meaning that Amazon also had cost savings because they needed to pay for fewer shipping labels for shoppers to return the goods to its warehouses. Yet, your net PPM would never reflect any of those initiatives because all of those margin tailwinds will only be reflected in what we call the contribution margin that sits way below Amazon's net PPM. Vendor Managers will try to focus you on their net PPM targets because it's a path of least resistance. It includes cost prices, selling prices, and your trade terms, as it is defined in Vendor Central.
But if you ask about how all of these initiatives impact Amazon's margins, vendor managers will often be quick to tell you that this flows not into Net PPM and instead into their CM, yet they will never talk about it. And of course, it's a tactic to distract brands towards a metric that is much more volatile and that is much more in favour of Amazon to put the direct focus towards to. Because as soon as your net PPM declines, vendor managers are starting to ask for costs compensation whereas they will never reveal how potentially their contribution margin has improved over the last few years.
And while it's difficult sometimes to put a price tag against it on how much our actions actually drive in cost savings for Amazon, because Amazon is not sharing this with us, We need to still also create a narrative that focuses on the CM level and hold our Amazon teams accountable by trying as best as we can to quantify the impact of those operational efficiencies that we've just handed over and that we've actively been developing and introducing into the joint business over the last six, twelve and twenty four months.
So make sure you're not only looking at net PPM targets and you're not aligning ideally on net PPM targets in the first place, but rejecting this KPI almost because it does not truly capture all of the cost and profit centers that you are actually able to manipulate when it comes to Amazon's margin performance, at least indirectly.
So a few key takeaways. Vendor negotiations in 2026 are not necessarily going to become any easier. Amazon will keep focusing on net PPM targets. And if net PPM targets are not enough, or you already are at around forty five to fifty percent of net PPM, vendor managers will likely pivot and talk all of a sudden about new supply chain initiatives that become mandatory. So it's critical for us to collaborate across functions. Because if we are seeing negotiations as an annual event where we'll just improve or reduce our trade investments, we will not create a sustainable business with them.
We need to bring our finance, logistics, and brand and marketing teams on to the table in order to effectively create a holistic and integrated negotiation strategy that looks at the different touch points where Amazon has an impact on our holistic customer P&L. And that means we also need to define concrete AVN targets that not only look at how well or how long it took us to get Amazon to accept a cost price increase, but also at the concessions we had to make elsewhere in our P&L to kind of offset any of the demands that Amazon potentially introduced as part of the AVN.
Supply chain initiatives, a refocus of our retail media and advertising investments, and potentially a reprioritization of how and where we spend our price promotional budgets can be part of that equation. But as we discussed earlier, we do not need to reveal all of those levers from the get-go. Instead, don't forget to anchor Amazon, especially on your best case scenario. Yes, this may mean that it's becoming a little bit more uncomfortable in your trade discussions because Amazon will anchor you at their biggest target and you will anchor them at your best case scenario.
But it then allows to kind of use the remaining weeks and months of your AVN to really start talking about value adding benefits that both parties can introduce into the joint relationship and to become more creative about how potentially margin targets can be reached instead of just talking about cost support or margin support. But by also introducing other initiatives such as supply chain portfolio changes that can help you to not only uncover your commercial leverage, but also stabilise and remove the friction that we may have seen in our trade partnership with the online retailer over the recent months.
Most importantly, however, make sure that you define your escalation triggers. internally. Now, this means you'll need to align with your leadership teams on how much and what level of friction you're even willing to introduce into the negotiation. If you want to reduce your trade investment exposure by a few percentage points and you have significant growth targets, well, you will likely face more difficult vendor negotiations because your vendor manager will not just say, great, I will grow you at a lower margin.
So are we ready to accept at least a temporary disruption to our buy box availability? Are we comfortable with this kind of friction compared to the landscape of retailers that we are trading with at the same time? Or does Amazon actually form such a strategic growth channel for us that we do not have the opportunity to implement any friction into this trade relationship? By which time we probably need to pivot and look more at diversification strategies than just the AVN strategy and isolation. So hopefully that gave you a good overview about some practical kind of advice and frameworks on how to prepare and how to also engage in the initial stages of your vendor negotiations. And now I'm very much looking forward to the questions that we're having from everyone joining us today.
Paul Sonneveld
Thank you so much, Martin. That was a great way to kick off day one. I really appreciate the insights and the perspectives and you know, going pretty deep into the mindset of the Amazon Vendor manager as well. I think that's just so helpful as we prepare and negotiate. So that's really fantastic. So yeah, for the rest of our audience now, we've got a little bit of time with Martin. He has agreed to come back for our panel as well towards the end of today, but we've got a little bit of time to ask some questions.
We've got a couple of them come through already. And if you have a burning question for Martin, this is the time you get to interact with him live. He's a hard man to get a hold of. So just pop in the comments section here on StreamYard or on LinkedIn or YouTube. So let me kick off, Martin, with a question we received before the summit. Let me just have a look here, see if we can bring that up. All of a sudden the question comments start scrolling down. Here we go. All right. This is one I just put on YouTube before. With vendor managers increasingly checked out, and this is a little different depending on which geography you are in, is the investment in AVS, the Amazon Vendor Services, do you see that purely as an insurance policy for crisis management or is there real value in there in terms of driving growth?
Martin Heubel
Great question. I really like it. Look, the answer really depends on how relevant you are for Amazon in your category. You see that a lot of vendors are frustrated with the AVS because they often don't know how to unlock the best value out of it. But that's the easy answer. That's not necessarily capturing the full truth, right? Because oftentimes your AVS will not only work on your accounts, but work on six, seven other accounts at the same time. So realistically, they will spend most of their resources on those vendors who have the largest category share and the fewest time or the littlest time on those brands that are not necessarily moving the needle as much for both themselves as well as their vendor manager in the category.
So most of you will fall into the foundational stages, as I call it, when it comes to the service level that you will be receiving from Amazon. That means they will be very reactive in resolving your issues. They will mostly force Amazon-defined KPIs on you, right? So, OK, trying to improve your confirmation rates, trying to kind of get the IDQ score up, et cetera. And oftentimes, you will face a little bit of ambiguity when it comes to the ownership of certain tasks. Oftentimes, they will just say, raise a ticket in Vendor Central and escalate it to me if you do not hear back or if it doesn't resolve within a certain time period. And that is very frustrating for, I think, any brand to invest several hundreds of thousands of dollars into a service.
Now, on the flip side. Two things. Yes, particularly to the participants' question, it is an insurance policy. Because imagine you're selling products that were flagged by a customer and then now are classified by Amazon as a customer safety hazard. Most of your portfolio would be immediately taken down or yanked by Amazon. And with AVS, you have a good chance of getting your portfolio reinstated within probably a few days at an absolute maximum.
If you do not have avs you're quickly in a pickle and you have to basically figure it out with the case support and vendor central which can take sometimes weeks to resolve very simple issues. So it can be devastating for your business particularly if you're an exclusive vendor that does not have the capabilities or abilities to sell alternatively and pivot to a seller central or hybrid model.
So yes, what i say is AVS absolutely mandatory for any brand selling through vendor central. Yes, it should be because it's probably one of the terms with the highest return on investment based on what I just said. It is an insurance policy, but that doesn't mean that you have to kind of agree to what Amazon communicates to you as a rate card. We can always pivot and shift investments away from basic rules like co-op or automated marketing to ensure that you can meet the requirements for the AVS rate card that is being communicated by Amazon. And if you are increasing your investment exposure, that also positions you at the same time to ask for a better service level rate cut.
So this would then enter this kind of enablement stage, as I call it, where you define as part of your commitment to invest and continue your investment into AVS, joint reporting cycles such as MBRs and QBRs, where also the vendor manager is bound to be joining at least several times a year. So you have this kind of structured business cadence. You potentially get access to quarterly Kaizen workshops to address any kind of issues that you're having in your joint supply chain. And you also create some incentives for the AVS team to have a more shared sellout accountability, right? Where you define clear deal timelines, order cutoff dates, and also try to align on a joint forecast as much as possible so that you get more guidance out of AVS.
Paul Sonneveld
Thanks, Martin. And a reminder for our audience, we do have to have a session that goes much deeper into AVS tomorrow as well. So make sure to tune in for that. Our next question comes from Emily O'Toole. She asks, What if your net PPM is forty nine percent, but Amazon says your CP is negative? I mean, what is our negotiation power, negotiating power when they won't share details on CP?
Martin Heubel
Yeah, I mean, look, right, there's probably two extreme spectrums in which this could be potentially true. And this is usually when you sell a lot of ultra-low ASP products or anything below five dollars, pounds, euros equivalent. Or if you're selling very heavy, very bulky products or those that really do not fit in standard parcel dimensions and where the issue of the unprofitability that Amazon communicates to you at the CP level, so contribution profit level, It's not necessarily driven by your cost price basis or the level you invest into trade terms, because if you're achieving forty nine percent in Net PPM, you're typically overexposed into both of those. But it means that there is a structural cost center that really drives down profitability for Amazon in the variable handling and shipping costs.
So if either you, I would really pivot the conversation towards the root cause of that unprofitability and try with my vendor manager to understand, okay, what are the products that are really driving down your CP And what kind of profile do these products have? So are they falling into the aforementioned ultra-low ASP category? Or are they falling into a very non-sortable type of category where they are very heavy, very bulky, and thereby require potentially a different supply chain setup that you are ideally then start trying to elaborate on as part of your AVN?
This could be a direct import, a vendor flex, or a direct fulfillment setup. I mean, I do not know your portfolio, so you'll have to have this conversation with your vendor manager. But again, just improving and increasing net PPM is probably a race to the bottom here. I would rather re-pivot and focus on the originating root cause on why this staggering high net PPM is required in the first place.
Paul Sonneveld
Thank you. I'm moving to Tom's question now. It's a very practical one. If your vendor manager isn't forthcoming with actually starting the vendor negotiation, should I press them or should I sort of sit back and wait for them just to come to me, sort of ignore it as long as possible? Your advice.
Martin Heubel
Yeah, I love the question. I'll only be able to give you a very high-level answer, right? Because I don't know your business. I don't know your category share. And it depends on a lot of different factors, right? How profitable Amazon is for you as a customer. But generally speaking, if your vendor manager is not pressing for the ABN to start, it typically means that they either do not have the need because you're already more accretive than other brands and they kind of just want you to grow in the background so that you're complementing Amazon's margin in the category. This is the one opportunity or option.
Or the second one is that they simply have their plate so full with larger vendors in your category that they say, okay, look, we are not going to start this up until, let's say, maybe February or March next year. And then it becomes a question on, okay, what is in it for you to start the AVN prematurely? Is it that you really want to reduce your trade investment exposure and you feel you have so much momentum in the market because you've gained so much share in Amazon's category that you feel they're more dependent on you than the other way around? That you really want to press a negotiation, then by all means, go for it, right?
Introduce friction into the relationship and say like, look, if we do not start the AVN by a certain date, we may not be able to kind of continue our trade from our end, right? which often means that your vendor manager is going to prioritize you. But on the flip side, if you are not in a very favorable position, you probably want to, to at least a certain extent, wait it out and see what's happening. Because oftentimes vendor managers will either completely forego the AVN with you, considering the current headcount reductions after the layoffs, or just say, okay, we do not need a revision of our net PPM here and the trade investments associated to it because you're already fairly profitable.
Paul Sonneveld
Okay, I think we have time for one last question. But I'm seeing some great questions from, you know, from Philip, from Jonathan, from Maria. So don't worry, I'm going to take some of these questions to our vendor panel towards the end of today. But today, just one from Maria to wrap up this segment here. Here we go. So Maria asks, how do you recommend renegotiating things at an ASIN level, right? A lot of times we talk about the entire vendor account and the overall negotiations, but sometimes kind of profitability issues really reside within a specific ASIN. You know, particularly those ASINs that are crapped, for example, you know, how do you, what is your recommendation Martin here in terms of renegotiating at an ASIN level? Is it even possible?
Martin Heubel
It is possible. I mean, you always have ASIN level negotiations when it comes to your cost prices, for example, right? Or when it comes to cost support. So by all means, I mean, start to introduce a negotiation if you want on those products that are most structurally challenged or where you face continued kind of friction in terms of crapping, in terms of buy box suppressions.
I think it's important to, I always call it the carrot and the stick method here, and to differentiate between the two. Because if you are structurally improving the profitability of products that are typically crap, there's not only a sales upside for yourself, but it also means that Amazon, of course, benefits to a certain extent from having broader selection available directly through you as a manufacturing brand. And that should come at a certain cost elsewhere.
So if you're increasing the margin potential that Amazon can achieve on some of your most structurally challenged products, well, then it's only fair also to kind of increase your cost prices on the other end of your portfolio that may be overexposed or have a much higher net PPM. In the end, the net PPM targets, I mean, just to kind of get that point really across, they are a guidance and they're more or less artificially made up based on the performance that you have seen with Amazon over the last few years.
So I would not base my own business strategy with Amazon on them entirely, but it's probably a good idea to look at improving and reducing cost prices at the ASIN level to kind of ensure that you're bringing the outliers in your portfolio more to the kind of average or weighted means so to say that you see um at a net ppm level and basis on your account to then also ensure that you're reducing first of all an overfunding on very profitable products but at the same time then also these kinds of um sales suppressions that you would see otherwise.
Paul Sonneveld
Thank you so much, Martin. That was a great start to day one of the Amazon Vendor Summit. Thank you so much for kicking us off. And we look forward to having you on our expert panel towards the end of today, where we will certainly get back to some of the questions that we weren't able to answer here yet. So really appreciate it, Martin. And we'll see you a little bit later on.
Martin Heubel
Thank you. Thanks for having me.
