Hi all,

In most groups the “how to get a price increase through?” is the most common question these days and for understandable reasons.

So I thought I’d collate a quick summary for you all WHY most wholesale increase requests are being rejected.

First start with the most common misconception about why price increase are being rejected:

“I have no access to a VM…” This makes no difference whether or not the wholesale increase is accepted.

Why?

As a previous VM and getting price increases through in multiple categories in the past 4 months, I can say this based on my personal experience: VMs DO NOT accept or reject price increases at AMZN…

Algorithms do.

VMs only submit the price increase bulk upload sheet on your behalf and let the algorithm evaluate it. Which is the same as if you submitted the increase yourself via VC.

VMs only communicate the decision to you. The numbers need to make sense for AMZN to accept that wholesale increase.

To be fair, there is an advantage having a VM which is that they MAY tell you what would be an acceptable wholesale vs VC does not.

Note that this only speeds up the process but it does not make a difference as to WHY the original submission was rejected.

So if there’s a rejection, what are the most common root causes that hold you back from getting the wholesales increased?

1. Submission errors on upload sheet
2. Missing data from mandatory fileds
3. Not respecting the 60 days notice period (or 90 for tariffs)
4. Your account’s profitability from AMZN’s perspective doesn’t allow an increase

This happens when the increase would result in a noticeable margin compression for AMZN or AMZN would start making negative margin on the ASIN or both.

Please note NetPPM is only a guidepost when measuring your account’s profitability from AMZN’s perspective. It is by no means the enabler of wholesale increases in itself.

CM or contribution margin is. That goes one level deeper and includes damages/returns/replacements, fulfilment fee, freight (domestic and international if applicable), cost of storage, etc.

If on a CM level AMZN loose money on an ASIN, the ASIN needs to be the one of a kind for AMZN to accept an increase (eg the next iPhone in its category).

So what to do now?

AMZN favor and I’d say give unfair advantage to all vendors that don’t only manage the wholesale side of the business but also manage AMZN’s business for them.

1. Invest the time and do the numbers: Do AMZN make a positive CM on the ASIN you want to pass on an increase? If positive, is it in line with all your ASINs in the same category?
2. If CM needs increasing, design a plan to increase it for AMZN first which creates the space for your wholesale increase in return.

If no, make sure you understand why not. Is it because the retail price is inconsistent? Is it because the fulfilment fee has become too pricey vs the retail? Is it because the damages and returns exceed the trading terms contracted value? Is it more than one of the above?

Design a plan how to improve it and execute on it consistently.

Doing so will improve AMZN’s margins and as a result it will create space for your wholesale increase.

Most increase requests are being rejected as the margin is not created first for AMZN to accommodate the wholesale increase.

Without that it will be rejected regardless whether or not you have a VM.

With the space in CM created, the price increase will be accepted if reasonable.

The above outlined is only one of multiple avenues how you can avoid a wholesale rejection. Other include vendor code optimization, range change, etc.

Hope it helps and good luck getting the increases through!