Amazon Vendor Negotiation Q&A - Week 9 with Trav Chappell

Welcome everybody to 2026 AVN Office Hours. This is our second session. I'm Andrew Hamada, co-founder and CEO of Reason Automation, and joining me today is Travis Chappell from Venture Forge. Travis, do you mind giving a quick introduction?

Sure. Thanks, Andrew. And yeah, Happy New Year, everyone. Hopefully it's a great year for you. So I'm Travis, Head of Vendor Services for Venture Forge. We're a UK-based Amazon agency. I've been in the Amazon game myself for probably about close to 8 years now, starting my career at Amazon in the health and personal/beauty team, moving into pharmaceuticals and then going full circle again into the agency side of things. So hopefully, you can all learn something today and looking forward to sharing some knowledge.

Awesome. Always excited to have more ex-Amazon folks here. Before I get too deep in, do you want to tell us a little bit more about your time there? When were you there? And you mentioned one team, but anything else you want to share about your time?

Yeah, sure. So I mean, I think it's very easy to go down the Amazon rabbit hole. I think, Andrew, you also know, it can become a little bit of a cultish place. And I mean that with the most biggest amount of love. I've still got great friends there that are still very close with. So yeah, I was there from 2019 till about 2022. So during the height of COVID it was absolutely ridiculous. I mean, for reference, our P&L grew from about half a million pounds to about a million pound P&L. It was ridiculous. And that was over the space of about 2 years during COVID I was mainly focused in the beauty team. So working with brands like L'Oréal, Johnson Johnson, a local here in the UK called Molton Brown. And basically, I was part of the AVS service. I was their brand specialist. I was their Senior Brand Specialist. And basically, I was that conduit between us and them essentially to optimize their success on Amazon. Also did a bit of time on Amazon Business team, Amazon Pantry in the UK, rest in peace Amazon Pantry, and then a little bit of Fresh. So yeah, been around the game a little bit, let's say, when it comes to Amazon.

Wow. Yes, that is a very diverse set of experience. Lots of consumables. But for anybody on the call who has been looking forward to chatting with a former AVS, this is your opportunity as We, we have had a few, but Trav is the latest. Super excited to have you here. As a reminder to everybody on this call, you can submit questions at any time using the Q&A button in Zoom. That'll allow you to do that anonymously if you want, and that is truly anonymous. So if you ask through that tool, like it just says anonymous attendee asked a question, we'll answer it here live as best we can. And the areas that, of course, Trav is here to talk to you about primarily around his own AVS experience and anything around being that conduit as well as around general VM and Amazon interaction are his sort of focal areas. So just to get us started there, I always love asking current and former AVSs one specific question because just to remind folks, I also am former brand specialist. It wasn't called AVS back then. It was called brand specialist in 2011, but I had the same role and I'm very, very familiar with what it started as. But I feel like a lot of brands struggle with the AVS investment. Because it feels like it's sold as one thing, it gets delivered as another thing. And then eventually, as they try to figure out how do I negotiate this year over year, a lot of voices, sometimes mine included, are telling them, hey, this is an operational cost. You have to kind of pay to play with Amazon, and your vendor manager simply isn't going to pay attention to people who don't have AVS compared to those who do. But putting that tenet aside, in your view, When is AVS a bad idea? Like, how can brands actually approach the AVS decision as something like a yes or a no decision rather than a, oh, we kind of have to do it decision?

Yeah, I think it's probably knowing your worth as a brand, as weird as it sounds. Back when you were at Amazon and even when I was at Amazon, anyone that basically joined the AVS service and paid the accruals and played the game, what successes they got, local on-land or in-nation sort of brand specialists and VMs, whereas now a lot of them are offshore to India, especially in Europe. They offshore to Bratislava. So I think also knowing your worth within a brand— Tier 1 brands, or brands that have high velocity growth essentially within the category, are invited into the Tier 1 within the AVS service. Essentially, that means you get special, um, attention to you from VMs, you get special attention to you from SVMs, you might have an in-stock manager, you might include, uh, quarterly reviews where Cat Lead even joins, for example. So I think knowing your worth within a brand is where it makes sense to say, okay, is this investment worth it? Will an AVS drive overnight growth? Probably not. Will they be able to solve more complex problems a lot quicker than doing it through a ticketing system? Will they be able to give competitive benchmarking and insights? Will they be able to give better view of upcoming programs and focus points within Amazon? Yes. So it really depends on where you are within a category position within a business. Can you afford the AVS and come to rely on that support? Or is it going to drain you essentially knowing that you aren't going to get that success overnight?

Mm, yeah, a good callout. In particular, starting with the fact that AVS from our universe was very, very different. It was an onshore resource, like somebody who was slated to become a VM who was trying really hard to become your next VM. And these days it's— and it was a one-to-one relationship. I had one brand and that was like the explicit promise model. And now it is very much not that. I want to ask a follow-up there, though. When you say know your worth as a brand and you're tier 1, I feel like this is where a lot of brands struggle because depending on who you ask, of course, they're tier 1. And then depending on who you ask in brand, you know, maybe they're a little more realistic, etc. So how can a brand realistically sort of assess whether they are tier 1 or whether they're close?

Very good question. I think it also comes from the relationship with your AVS. If you basically ask them, look, how are we seen by your senior leadership within the category? If you have that good relationship with them, awesome, they might give you the insights. Generally, it's £10 million plus, that's where you're seen as like a premium sort of account. You get onshore support, you get senior leadership involvement, you might get other teammates from in-stock that support you, for example. But if you want to do your own grunt work and your own research, Nielsen data is probably a good place to start. Secondly, tools out there like Perpetua Prism, for example, will allow you to deep dive your market share, your competitor growth, and that is true data from Amazon based on categories and subcategories. So you can always back it up with data. So if you do have a great relationship with Amazon, be your first port of call, essentially. Your AVS or your VM might not put it on email, but they are generally quite open to sharing certain bits of information over phone calls, for example, where there's no paper trail. Use that how you will. But ultimately, there are tools and ways where you can do your own data analysis. But yeah, Nielsen data, for example, bit more expensive. But Perpetua Prism, for example, is a great tool to know your market share and what your competitors essentially are doing and how they growing.

Yeah, absolutely. Like any of those market share tools makes a lot of sense, just even though they all have their own quirks around accuracy and estimation models and whatnot, they're certainly better than nothing. And for directional insight about what is the relative size of my business and how much is going to matter to Amazon, that makes a lot of sense.

Yeah, Perpetual Prism on our side, we've noticed, probably has the closest data accuracy. It's about a 5 to 10% data difference depending on the size of the category, if there's any miscategorized products with it, if it's category that's open to interpretation versus home and garden versus DIY, for example, where there could be cross-blurred lines. But yeah, we found Perpetua Prism probably gives the closest sort of data and the best bang for your buck.

Got it. Okay. That makes a lot of sense. Leaning again on the AVS side of questions, and because this is the AVN-specific specific office hours. When you think of your time as an AVS and then bridging that all the way to your time now at Venture Forge, what are some ways that you think brands should be using their AVS as part of their AVN prep?

So don't just use them as a ticketing system. Definitely ask them for any benchmarking insights they can give within the category, whether that's content benchmarks, whether that's pricing benchmarks, whether that's sales velocity benchmarks. Amazon won't give you exact brand names, they might not give you exact brand values, but they will generally say you're within the top 5% within the category. So it allows you to use that as a little bit of an indication of how Amazon views you essentially. So try and get as much data as possible. But then ultimately also it comes down to your vendor improvement plan, for example, from the last year. Audit it, use it as like a monthly checklist, don't do it a few weeks before AVN every year, it's useless then. Monitor it and check it on a monthly sort of level. Is your AVS delivering on the selection increases that they promised? Are they giving accurate reporting and it's timely every Monday, for example? Are they raising tickets in a timely manner and resolving issues? Are they fixing variation breaks? Are they giving keyword research optimization ideas? Use that sort of as a bit of a business charter going into AVN. It's like, okay, AVS has done XYZ as what they've agreed to in the previous year, but they may have dropped the ball on content or promotions or overspending on SOA or diluted net PPM, for example, by price matching a wrong competitor on a wrong product variation, those types of things. So use your vendor improvement plan, I think it's called your vendor growth plan now, sort of as your business charter. Internally, where I am, we've got one or two clients, and it sounds terrible to do, but they've got an amazing leverage out of an AVN. Whenever your AVS or VM drops the ball or doesn't deliver on promises, they keep that as a paper trail. They'll screen grab it, they'll put it on slides, they've got a SharePoint, and they'll ultimately just play open cards with Amazon at the end of the year and say, look, you promised X, you delivered Y, I want Z in return when it comes down to the negotiation factors. So make sure you've got all your data, refine that data on a month-to-month basis, and just come in fully prepped.

I love it. I'm looking forward to getting that recording because of this part of the session, because I'm going to have to repeat pretty much everything that you said to a lot of our clients as well. Many of them, I think, have internalized that, but we are perhaps over the top with emphasizing that AVN is a year-round exercise and things like keeping a paper trail of your interaction with your VM and your AVS, where they're achieving versus not achieving the vendor improvement plan promises et cetera, makes so much sense. And I get to your point that it might feel like a weird, potentially aggressive tactic to take in what you might view as a relationship with other buyers and other channels and whatnot. But as you've probably heard us talk about to death here and in other channels, relationship management with your vendor manager doesn't mean the same thing as elsewhere. And you have to keep in mind that your vendor manager is doing this exact same thing to you in return. Your AVS is doing the same thing if they're good at their job. And certainly if they're trying to build a negotiation position, their category leader is not thinking about their relationship with you unless you are like the absolute number 1 or number 2 brand in the category. They're thinking about how do I help my VM tell the story that they need to tell to extract the value we need to hit our goals. So yeah, definitely claim that value in return. Don't let it be an Amazon-only thing. Somewhat related, A big thing that we've started to hear about from our clients as well as in the general marketplace is about Amazon asking for cost reductions this year specifically. And although Amazon has done that in the past, it hasn't been a consistent thing that we've seen be a part of AVN because they typically focus on term increases and because they know that brands in general are always trying to push through cost price increases. And so trying to get a cost decrease is just, you know, butting heads unproductively. But it sounds like for the first time we're hearing about this happen I don't know at what scale. I've heard at least 6 or 7 examples of it. Is that something that you've heard about happening, and can you tell us more about what your experience with that has been?

Yeah, yeah. So it's come— coming across the market. I think back when I was at Amazon, 2019, 2022 was all about selection. It was, let's hammer in as much selection as possible, give the customer all the options, be the one-stop shop for everything. And I think now, especially in, in Europe and the UK, Amazon's backpedaling because they realize it's not sustainable. The cost to serve is too high, postal might be too high, shipping handling might be too high, internal contribution margins just aren't cutting it anymore, essentially. So what they've started doing is focusing more on profitability now. So culling selection or crapping it out, don't realize a profit, for anyone that's not familiar in the term, they crap out the selection, they just focus on profitability. Coming now with AVN, I think Amazon has so many different levers from logistical programs to product programs when it comes to damage allowances, returns, promotional pots, all those good things that once you've exhausted all of those levers and it doesn't make financial sense anymore to the account, the only thing you really do have left is cost prices. And I think now, as a lot of competitors in the market— wider marketplace, I'm talking now, whether that be Sainsbury's, whether that be Walmart, whether that be whoever— they realize what Amazon's goal is, is to be the most cost-effective and quickest turnaround on delivery, uh, provider platform, whatever you want to call them. They're trying to go into that also. If they can get a better cost to serve to their clients, and they can share similar prices to Amazon, who's to say they can't translate or transfer, sorry, that customer from Amazon onto their marketplace. So pressure from external marketplaces on Amazon to have the best prices is getting bigger and bigger by the day as new players come into the market, and new online players come into the market. Another thing that I've been seeing recently is cost support agreements, which have been coming into play. So instead of asking for better cost prices, they say, okay, well, 'Want a 2 or 3% cost support agreement for if margin goes down, we can use that accrual, we can use that amount of cash to sort of plug the gap on net PPM.' I don't advise it to any of our customers unless there's a cap in place for the amount that you can spend. It's maybe for a quarter or 6 months just to like litmus test if it does work. And have metrics about it. Don't just give Amazon a blank check. Pricing is set at the sole discretion of the retailer. So Amazon chooses to who they price match. You can't be are not liable for that, and you, you shouldn't have to pay for that. So yeah, there's a lot of things going around cost and profitability, because I think the cost to serve is getting higher, cost of living is getting higher, transport's getting higher, fuel's getting higher. So all the input costs are going into Amazon, and they need to sort of squeeze margins somewhere along the line.

Hmm, okay, yeah, that makes a lot of sense. You know, as Amazon does, they tend to go up and down in terms of like a sine wave between do we want sales growth and selection, or do we care about profitability and free cash flow? And right now they are definitely in a profitability season. I like your point about the competitive lens. That's not something that I've heard about previously with our other speakers is that it's really driven by Amazon's competitors pushing for the same sort of cost prices in order to drive the same faster deliveries and differentiation that Amazon is doing. And that, that in turn, because Amazon is a price follower and whatnot, is adding to that pressure. Super smart, makes a lot of sense. The last thing I'll add before we keep going is, because every time a CSA comes up, I have to give the spiel just in case anybody hasn't you've already heard it. To Trav's point, please don't sign a CSA if you don't have to. Speaking as a former vendor manager, former AVS, there is nothing that we liked better than you signing a CSA. It's like winning the Super Bowl. It means that you are financially responsible for all of Amazon's mistakes, whether or not they're related to you. And that is a giant, empty, terrible black box to open up. A responsible vendor manager won't take advantage of it. Of it, there are a lot of irresponsible vendor managers. So don't do that. One last follow-up there before I turn to a user question here, Trav. To your point around, you know, Amazon has a lot of levers here, whether it is cost support agreements, actually asking for additional funding and co-op accruals, etc., or cost price reductions. And to, you know, accountants, it feels like, hey, these are all the like a dollar here is a dollar there, but we all know that a dollar isn't necessarily a dollar every year with Amazon. So do you have any insight about why they might be pushing on the cost side this time as opposed to on terms?

I think it's literally just because the cost to serve is quite a lot easier. Obviously, if you can get a product for cheaper, the downstream impact that generally everything else is going to be cheaper, or you could have more leeway with it. Um, like we mentioned, yeah, they've got too many levers. If you've been approached about Super Picks or Picks 20 times, or however many times and you don't need it, you've got a good fulfillment network, you've got a good operation network, you've got great warehousing and staff, and you just cannot budge on any terms. That is generally where it goes, when it's cost price reductions. Also, if you've got opportunity for hypergrowth in the year, are you going to be doing a lot of external advertising off of Amazon? You're going to be increasing a lot more selection, or you're giving Amazon more exclusives, for example. You don't want that higher proportion of sales to be linked to additional accruals, essentially, as a company. If you know that internally, you haven't shared it with Amazon, you don't want your extra successes to result in sort of a, a floor moving, essentially, like that on results. So you will just agree to cost prices. Ultimately, I haven't seen any real reason from anyone internally except for it's a new thing, what we can approach from the sides instead of accruals. That's what a lot of the vendor managers, a lot of my old friends at Amazon, are still saying. It's just you can also nitpick on which ASINs you want the cost price agreements, whereas accruals is generally blanketed across the entire catalog and the whole account. You can do cost price changes on individual ASINs where, let's say for example, yeah, the whole Pareto principle, 20% of your ASINs drives 80% of your revenue. You can really nitpick which ones you want the cost price changes on to drive the maximum impact instead of applying an accrual across the whole account essentially.

Great point about the specificity. You know, we spend a lot of time talking to people about how can you incentivize Amazon to treat certain portions of your selection differently. And certainly cost price is an easy way to do that. You don't need to make an argument that certain portions of your selection should be in a different accrual or a different agreement. You just lower prices on some products and not on others. Awesome. Okay, starting to get some questions streaming in from the crowd, mostly about AVS, as expected. So why don't we start there? Does AVS have access to baby registry performance data or wishlist data, like about how many times a product was added?

So they do all of those internal metrics Amazon has. A lot of them they just can't share though, and they ultimately won't share. A smart person that is able to decipher how many times a baby register has been accessed, how many products have been accessed, or what type of products assortment's been accessed, well, serve as a strategic advantage to whoever knows that data. So good AVS will probably hint or give you redacted answers like that, or generalized information where it's not very specific. But yeah, they do have that data, but they just will not share it. It's the same as marketing banners and billboards, for example, they claim, we don't know the data on that. But there is backend data on how many times it's interacted with, how many times it's clicked on, what's the share of voice note, how many times it showed on site, it's just not public-facing information that Amazon will share, unfortunately.

Yep, that's exactly the same experience that I had. I have no idea what the tooling is like today. But back in my day, you had access to a tool called Bullseye that would allow you to create customer segments using pretty much any criteria that you wanted, including things like interacted with X products on registries in certain ways, a certain number of times in a date range. And so it becomes extremely easy to get at that granular data. And you will never see it. To Trav's exact point, hard rules that, that in AVS and SVS cannot, absolutely cannot share that data with you externally. That said, just like every hard and fast rule at Amazon, I've always heard of an exception, particularly for extremely large brands with that are extremely bought into Baby Registry. I'm talking like P&G scale who have also funded devs at Amazon to make specific feature improvements to Baby Registry. They get a little data. But if you're not P&G and you're not funding for developers at Amazon, don't expect anything. Awesome. More AVS questions. Can AVS tell us if Amazon is deliberately slowing traffic or pushing down sales rank on our ASINs as a tactic?

They wouldn't explicitly tell you unless you've got a great relationship with them and you maybe go out for lunch and they tell you in person again. So to Andrew's point, There is a lot of bits you can get out of AVS and VMs, but you need to be on that level of relationship that they can trust you with that information. They'll never put it on email. They'll never put it in a ticket. They might not put it on a phone call. They'll never put it on a text. They'll tell you in person, this data. So if you don't get that from them, then they might hint at it in a way where if you're not accepting AVN terms, if you are not able to serve, for example, or your confirmation rate's dropping, or you're not willing to fund deals, Amazon can take measures to suppress your Buy Box. For example, I've seen cases where brands don't accept to AVN and they get the A+ removed, they get the Buy Box suppressed, all those types of things. So there are ways and means where you can assess if Amazon's doing that, but ultimately it's a guessing game without them telling you that. There's, there's no real way to, to tell it essentially except for looking at the metrics and making your own determination of why they would be using these measures. Is it a negotiation tactic? Is it a leverage point within negotiation tactic? That's the only way I really know without them explicitly telling you face to face.

Yeah, that makes a lot of sense. Following up on that, you know, because it is so much about the AVS relationship is about what they can, what they decide to tell you and what they don't decide to tell you and whether or not they're quote unquote like a good AVS. Putting our own egos aside for a second here. What, what, how, what would you define as like a good AVS and how can a brand tell?

Yeah, no, that's a great question. I think a good AVS is someone that you feel comfortable with, someone that is basically seen as an extension of your team. You just don't sit within the same building, essentially. So I think first and foremost, everyone's people at the end of the day, everyone's got their own ambitions to progress within the role to get to the senior vendor manager or the senior brand specialist role or whatever, that type of thing. So Are they proactively sharing things that will get your attention? So are they sharing data on a weekly basis that's going to increase the turnover of your account? Because those types of metrics where your account might increase selection, increase growth, reduce Buy Box issues, all going to be seen by the VM and ultimately by the Cat Lead because it's going to drive either conversion or it's going to drive revenue. So are they giving you the things that are needed fundamentally to view success and drive success within your business? Secondly, do they take criticism, as they say, in a positive sort of way? If they haven't followed up on something, or there might be delays on tickets, and you chase them, do they get sort of offensive and snarky about it? Or do they just take it on the chin and give you an update? Or do they give you proactive updates to give you that peace of mind that they are working in the background? I think a bad AVS they never see you for weekly calls, they never see you for monthly calls. They only ever reach out to you if there is issues. I've seen AVS that just essentially don't reply on email, they just do not reply at all. It's just like a— goes into the abyss, essentially. So I think a good AVS is one that wants to help you succeed, because ultimately your success will be a reflection of where their success is going to be. And I think don't be afraid to have a frank conversation with the AVS if you've got the relationship. Just say, look, What's going to get you your promotion? What's going to get you your bonus at the end of the year? Is it increased selection? Is it better net PPM? Is it better turnaround times? How can I help you get there? And once you get there, or how I can help you get there, how can you help me get a reduction in payment terms from 90 to 60 days, for example? How can you help me to do better forward orders with your in-stock team? So don't be afraid to have frank and open conversations with them. End of the day, like I mentioned, people are human. Everyone's got their KPIs. No one wants to go home and get battered by their boss for saying that they might not have achieved. So just have an open and frank conversation. I think that's, that's going to be able to be a good judgment of if they're a good AVS or not. Everyone goes through the same training. Everyone's got access to the same tools. But I think ultimately, it's on a person-by-person basis, not really on a skill-by-skill basis.

[Speaker:ANDREW_HAMADA] Yeah, it's a great point that it really is about who the person is, how comfortable you are with them, whether they're willing to work with you, because the whole thing is so relationship-driven at the end of the day. and like, that's the whole point of this conversation, right? The fact that there is a good and a bad, quote unquote, AVS, and that those can do different things for you is based on just access and willingness is, you know, not ideal, but it's the reality. And it really shocks me how often people don't do what you mentioned as your last tactic, like ask them, ask them how they win and help them win. This is something that I do with everybody at Amazon that I interact with, whether it's our ad API account representative or SP API account manager or whoever it is. Anytime we meet somebody new, I straight up tell them like, hey, I remember being at Amazon. I remember the promo doc process. Like, how do we be the good guy in your promo doc? Like, what is the thing that you need to accomplish this year and how are we an input to that? Like, what is the KPI? And 95% of the time people look at me shocked that I'm asking, and then they tell me exactly what I'm looking for. And now I know exactly how to help them win. And if that's aligned with my goals, great. And if it's not, then I know what I need to ask for in return.

Very well said.

One last question. One last follow-up here before I pivot us back to attendee questions. You mentioned that these days a lot of AVSs are offshore.

Offshore.

But at the same time, you mentioned a lot of the tactics that, um, we'd like to use in order to get to know the AVSs, like offline, get on the phone, talk in person, etc., etc. So I want to open this up not just to you but to anybody else, uh, any of our other panelists who are sitting here quietly, including Bernard and Jared. But how do you build a good relationship with an offshore AVS?

I think again, starting with the KPIs, if you physically can't get them to immerse themselves within your brand or feel part of your brand, at least help hit their goals with your brand, essentially. So like you mentioned there, have some time aside to understand their goals, understand who they are, and give them a bit of a brand introduction. If someone is based in India and it's a UK heritage brand, they might not have the context and the sway and the impact that your brand has within a local market, purely not because they, they, they silly or they don't understand it. They just don't have that access and that market context. So you need to be able to to— it's going to sound kind of cliché, but sell them the dream on who you are as a brand, essentially, to get their inputs. Yeah, it is really hard. I do get it. It is hard, especially if they offshore. It might be different cultures, different time zones, all those good things. But you need to set a cadence from the beginning and set it early on that you want their success, they want your success, and you're willing to help them get on that success. And if you are a big international brand, don't be afraid to send them samples if you have local market operations. We've got some local— we've got some international brands that are based in pretty much every single global market, and they're able to send through things through their fulfillment networks just to essentially sweeten the deal or get hands-on experience with the AVS there. So again, it comes down to relationship management. I think that is the crux of it for offshoring.

Such a good callout about making them or selling them the dream, you know, like the— with it, and it's funny because it works with AVS in a way that it absolutely doesn't with your vendor manager. You know, I think a lot of brands spend so much time doing the roadshow with their VM, bringing like the entire creative selection, doing product demos and all that stuff when their vendor manager is like, doesn't care at all. They're like, cool, we'll take any selection where the metrics work and we're gonna punish you for any selection where the metrics don't work. And by the way, By the way, a lot of your metrics don't work and they don't care about your brand. They care about their category metrics and your brand is just one input to that versus your AVS probably is managing 1 to a handful of brands at most. And speaking for myself as a former brand specialist, like you kind of get bought into it because if the brand does their job, because you have that opportunity to have that relationship and it never manifests more clearly than in sampling. Exactly.

Exactly.

Like, I—

and, and no, no, no, go ahead. Sorry, sorry. Um, yeah, I mean, so something like that. And also, if SmartVM or SmartCat Lead will assign the brands based on interest— if, if I know Andrew's got like massive interest in, uh, sports and outdoors and being healthy and nutrition, I'm going to pass you off brands like that versus maybe a brand that focuses on makeup and hair care and things like that. If you have a passion for the brand or a passion for activity or the, the sector that the brand serves, you're automatically going to have human natural buy-in on it. There's going to be a lot more less hesitancy on it. So yeah, I think also, like, like you were saying, selling them the dream. If they've already got experience with the product or experience the category or a little bit of enjoyment for what you can offer, double down on that, make their life easier.

Yeah, absolutely. And it doesn't even have to be something they already care about if it is great, but if you can sell them the dream that works. My first brand I like to talk about a lot was 3M, a huge conglomerate that has a lot of major consumer brands. But the dream they sold me was, Andrew, we want to sell $20 million of Scotch tape on Amazon. And that is a very boring goal on its face, not a particularly exciting dream, but between all of the rah-rah, the site tours, and the probably like thousands of dollars of Scotch tape samples they send me. They really got me believing that Scotch was better, a differentiated product, and that the value was there. Alright, another one for the broader audience here. Do you know anything about the quote unquote Amazon Brand View Pro and if it is being retired?

Anything on it being retired? But we admittedly do not have a lot of brands that are on the Pro type of thing internally at the agency. I can follow up if someone whoever's asked us wants to do it through you, if they want to remain anonymous, or if they reach out directly to me, I'll keep you in the loop. I haven't heard of anything being retired, but I'd like to hear if they have had any communication or any indication or anything that would indicate it's being deprecated, essentially. Because yeah, if it is being deprecated, you generally will get a little bit of a notice from your vendor manager, your AVS. It's not just a plug it and it's done overnight. If there has been some sort of mention, you Yeah, please just let me know.

Mm, got it. Okay, well, good to know. In case you want to follow up with Trav, I'm— I usually wait for the end of the session for this, but I just dropped his LinkedIn in the chat here. So if you want to ask him offline, please feel free to do that sooner than later. And yeah, we can keep going. All right. Another key question that I think everybody is starting to ask. How should a brand think about getting an item listed on 3P or 2P versus 1P? Curious, Trev, because I know that it's very different in the EU than it is for those of us in the States.

So sorry, Andrew, you broke up. I'm not too sure if it was my internet, it like sort of paused for a while there, then shot through. What was the question? How easy is it to get a listing on 1P and 3P versus just 1P? Sorry, just cut out there.

Yeah, sorry about that. My internet is misbehaving again. It's a little more, a little bit deeper than that. It's knowing that brands have that ability in the EU where they don't in the US. How should brands think about 1P versus 2P versus 3P, particularly around the AVNs? Season.

Perfect. That's great. So I think it also comes down to the data. Um, 1P is generally a volume game. Can you get a lot of things there in a quick volume through, um, doing palletization, a full truck ordering, that type of thing, economies of scale? Whereas 3P is generally a little bit more refined, and it might not go to a volume incentive, um, where they get the profitability essentially. So I think doing that analysis on a unit line by ASIN sort of level, looking at the profitability on 3P. Once you feed in the cost prices, once you feed in the accruals, once you feed in the cost to serve, and then focusing on 3P, doing the same— how much does it cost to stock it yourself, pick it, pack it, store it, send it on with the postman or the delivery driver, for example— doing that analysis on a line-by-line basis will also give you the profitability and then scale it up depending on how many units you intend to sell. It is also a great leverage point during AVN. I sort of see it as a bit of a nuclear option. There's a few nuclear options within AVN. This to me is sort of one of them. If you are really stuck and at a deadlock within AVN, maybe Amazon's asking for a straight payment, which happened within our customers, a few hundred thousand pounds, just a straight payment because of margin matching, totally Amazon-driven. But they just threatened to delist from 1P and put it all onto 3P. And that got the vendor manager and the cat lead's attention very quickly because ultimately they're going to be losing revenue within their category, they're going to be losing selection. It is underneath Amazon, but the 1P and the 3P teams sit completely separate. They've got different P&Ls, they've got different KPIs, they've got different ways of handling it. So it's a great leverage point within Avia. And if things aren't going great, the threat of delisting from 1P and transferring into 3P is very, very valuable. Ultimately, I like to just always advise the teams, always keep it open. Do the line-by-line analysis. Do what products are profitable through 3P, do which ones are profitable through 1P, and always use a contingency. If Amazon ever switches it off your 1P account for whatever reason, you can fall back onto the 3P account. Same with 3P, if you're going through the verification that you need to do every year on 3P, you switch to your 1P account. There are other types of benefits. So for example, Vine through Vendor costs about £1,900. Doing Vine through Seller costs about £300. So you can list it on Seller, do all your Vine, get all your reviews and ratings, and then obviously, same, ASIN will transfer to your 1P. So there's good ways and means of using it as leverage or using it for cost management, essentially. But I just always advise to use it as a contingency plan if AVN is not going good or if there's a threat of stoppage.

Great answer. Super, super clear. All right, we are running short on time. So I'm going to keep us running through here. Another question came through. Do VMs or AVS care if you've signed an annual DAA or direct advertiser agreement? No, I have no idea what a DAA is.

Yeah, I've heard of them. But I think it's the direct one with Amazon Advertising, if I'm not misinterpreting it. But Amazon Advertising and Amazon retail are totally different P&Ls. So they probably wouldn't care unless it's a substantial investment you're making into that. Or again, if you can sell them the dream, i.e., being, look, if we can advertise more aggressive, if we can get on to Prime TV, if we can get on to DSP, that will drive sales within the retail sector, which will ultimately drive revenue for your end goal. So they don't really care about it from an investment point of view, because it's totally separate P&Ls and you can't transfer the two. But they would care about it from a visibility point of view, if that makes sense. If you can get on DSP, or you can have higher ad budgets, you can get in front of more people, which gives you more opportunity to create sales. More sales increases, essentially, your revenue within retail. So it's kind of one hand feeds the other. But ultimately, on kind of zeros and ones, they, they don't care about. It's totally different P&Ls.

Super clear. Bernard, I saw you come off mute. Do you have anything to add?

Yeah. Hey, awesome job, Travis. I think, thanks for answering the question. I will add, particularly on the, the US side, we are seeing more discussion around AVN to incorporate DAA, not necessarily as a mechanism of DAA leverage, but do note that there are, there are some GLs in the US in that are looking at contribution margin. And in, in the new type of reporting for VMs, there's mechanism called just contribution margin that we all know, but there's also CM with adds. So there are some GLs that are taking into account the commitments of DAAs. But I think I will say for folks that are not familiar with the DAAs, it's basically an agreement of committed ad spend, but it is not contractual. It is not legally binding. But with that said, for vendors that are participating in DAAs, they are using it as an engagement piece of leverage to say that we are doing all this extra stuff for you, even though it doesn't directly impact our net PPM. But we do know that again, some, some vendor managers will look at CM them with ads as a mechanism to look at the health of the relationship, not necessarily a direct impact to any type of profitability lever.

Interesting. Thanks a lot, Vinod. I'll have to check because generally, if the US sneezes, the rest of the world catches the Amazon cold. So obviously, they're going to launch it out there in the US and then, yeah, slowly make its way to the UK. So no, thanks a lot for the context on it.

You bet.

I think it's, it's going to be a flavor of the week thing. I think a lot of it dictates, dictated by if the VM, for example, is a contribution margin or net PPM SME. If not, it'll be standard playbook. But obviously, to Andrew's point previously, there are some, some vendor managers that are a little bit more difficult or more sticklers depending on the subject matter. So that's where we're seeing on the US side. So hopefully that helps.

Got it. That is super helpful, Bernard. Thank you for teaching us something new today. And I think my last point around that is that we've heard a lot of chatter here and elsewhere about Amazon getting less consistent about how they measure profitability and their adherence to net PPM versus PPM versus CM versus CM with ads, etc., is evolving. Evolving. The better and more mechanized brands get about managing NetPPM, the faster Amazon will abandon it and move on to something else where they feel like they've got some secret sauce and they can, you know, hold an information gap over you. So while companies like mine are constantly trying to help you get better at that, next year it's going to be something new. So stay abreast. Don't be surprised if your vendor manager comes back and yells at you about a profit metric you've never heard about before, or that you haven't heard about in several years instead of just PPM. PM. All right. I think we were just about at time. Thank you very much, Trav and Bernard. For anybody who wants to engage with Travis, again, I've got his LinkedIn in chat, but you can also check them out at Venture Forge, either on LinkedIn or if you just Google Venture Forge, their website comes up real fast. Super smart folks. And of course, if you want to hear more from Bernard, he'll be here in 2 weeks for his own Avian Office Hours. If you have any additional questions, feel free to submit them online. Otherwise, thank you very much, everybody, for another session. We'll get the recording and the Q&A out to everybody as soon as possible.

Thanks a lot, Andrew. Really do appreciate the opportunity and for having me on. And yeah, hopefully could share some, some insights and information or even just give some food for thought to the listeners. So really do appreciate it. Thanks for your time. And Bernard, thank you for the learning. It's good to meet you. Take care, everyone.

Bye.

Cheers.

Bye.