AVN 2026 Preparation: Tactics for Better Terms & Bigger Wins

Paul Sonneveld
I'm Paul Sonneveld, co-founder and CEO of MerchantSpring and host of this weekly podcast. Now, just a quick plug before we get started, a quick note, MerchantSpring is a proud sponsor at Amazon Accelerate this year in Seattle. If you are also attending this event, come see us at our booth, Booth 29, to discover our latest features, enter our exciting giveaway, and even chat with me about being a guest on this very podcast. I'm always on the lookout. So if that's part of your plan, come and see me at Amazon Accelerate.

Now, let me introduce today's topic and guest. Today, I've actually re-invited Oliver Tomaschewski, founder and managing director of DiCommerce, a top consultancy for Amazon account management. With over nine years of AVN experience and nearly 100 negotiation sessions under his belt, Oliver is a trusted expert in guiding vendors through Amazon's AVN landscape, helping them secure favourable terms and grow market share. Oliver, it's so great to have you back on the show. It's absolutely fantastic to have you here again.

Oliver Tomaschewski
Thank you very much for being here again. Thanks.

Paul Sonneveld
Of course, a lot has changed since we last spoke, and we'll dive right into that. Before I do that, just to prompt to our audience that this is a live session. So not only to signal that occasionally that means things go wrong, but actually, more importantly, it's your opportunity to ask questions. 

So if you're joining us, on YouTube or on LinkedIn, make sure you put your questions in the comments section of these platforms under the event. That means I get to see them and I get to ask all of those questions. So please go ahead and do that during the course of this conversation. So, Oliver, let's kick off here. In your view, what has really changed in Amazon's 2025 AVN tactics compared to last year? You know, Amazon always has a different kind of approach, agenda. How would you summarise some of those changes?

Oliver Tomaschewski
Yeah, to answer this question, I would suggest that we take a look back, not only to last year, but also to the years before, because there's a general illusion visible within the last years of AVN tactic for Amazon. If I remember about six, seven years ago, for example, the complete focus for Amazon was not on profit. It was completely focused on growth, to have a broad portfolio and just to have everything in place to be the biggest marketplace. So really to have a good visibility also for the customers. 

Then, when we remember about Corona, then Amazon completely switched their focus. The focus was on availability. So on some of the products, as some of the vendors maybe remember, they stopped ordering. So availability of the relevant products was the most important part. And then since 2022, Amazon completely switched it. So the focus was more on profit. The discussions were tougher. Amazon was requesting a much higher trade term set up or they just declined cost price increases and so on.  And when I take a look back for the last year to answer your question all directly, We see that Amazon asked in a lot of AVN sessions about increased payment terms. So if you, for example, had before 30 days 3% or something else, they just try to push most of the vendors to a 60-day payment term. So this was what was last year. But still, they are highly focused on the profit topic. 

What I think will happen this year is again that Amazon will try to increase the net PPM. So these discussions will be very tough. I personally think that if you plan to have a cost price increase, it will be very hard for you to negotiate it but maybe within this session we will also find or discuss some ideas how to solve it. And if Amazon will ask you if you plan to have a cost price increase for a cost support agreement, please always do check, but I will explain it also later on a little bit more detailed.

Paul Sonneveld
Yeah, definitely look forward to getting into that. I know that that's a topic that is dear to so many vendors in our audience. Let's, obviously, from a timing point of view, obviously, we're talking like next AVN cycle, a lot of that will start in Q4 with Amazon. So now is really the time to prepare, you know, as we know, in general negotiation strategy, preparation is everything. When it comes to AVN preparation, you know, what advice do you have and specifically what data, when it comes to preparation, should vendors really focus on to prepare effectively for this year's AVN round?

Oliver Tomaschewski
I think first of all for the audience, for the people who negotiate the first time with Amazon, it's important to understand there will be no other client who will be so good prepared in terms of KPIs on your account as Amazon is. They really live the KPI topic, so they know exactly all the terms that are necessary to go into a discussion and they are quite well prepared for the AVNs. 

So which data you should use or you should prepare to have a good AVN. There are a lot generally, but let's go through the most relevant. And before we go through these KPIs, you should also understand that you need to prepare these data in total for your whole account, so for all countries, and country-specific. Because you need to understand in which country you have which issue, so that you can work more detailed on these topics. 

So KPIs are, for example, first of all, the net PPM. This is the most relevant KPI that Amazon will always put on a table and discuss with you that just the margin is too low. So net PPM stands for net pure profit margin. It's just describe what is the margin that Amazon can reach with your products compared to the sellout price. Secondly, I know that a lot of traditional vendors they are always thinking in sell-in numbers. But to be fair, Amazon completely don't care about sell-in numbers. Sell-in is named net receipt. So this is what Amazon received from you in terms of goods.

Amazon is always just talking about the sell-out. And if you think about it, this is also the only way how to be successful in the business. If you don't think in sell-out, you will have a sell-in problem. So therefore be prepared for both of these KPIs. Then, when it comes to that Amazon is requesting additional terms or wants to push you in a corner, try to prepare additional data like traffic. So show them that you was investing, for example, into ads. Show them your investment and your total investment into ads. So it doesn't matter if it's AMS, DSP or other things. Also, if you pay for external traffic to push it on the Amazon platform. 

So show them if you were able to increase the traffic on your product and also understand what is the organic share of your traffic. If you have a quite high organic share, this also shows to Amazon that you have a strong brand, which also will help you within the AVN. But also additional investments like, for example, funding. Amazon also wants to push you to spend more money into deals. So if you were able to increase the funding budget compared to the last year, show to Amazon. Show also what was the overall deals sell-outs that you were able to create with Amazon.

Also, for example, if we think about additional KPIs like chargeback shortage claims, every vendor has these issues. If you don't know what your chargebacks or shortage claims are, just contact me, please, afterwards and we can analyse it also for you. Be prepared on these numbers because if Amazon is asking you to spend additional money, just push them back and say, for example, we are still waiting, for example, about 250K of money because you didn't pay our invoices. So put it on the table, just be prepared on all these things. 

Lastly, what I think is also important that you understand and show to Amazon, the terms development. So if Amazon already increased the last two years, the terms, why should they again request for increase? So just push them back, be prepared not only for this year, but also for the last two or three years. This also includes the cost price increase. So I know that a lot of vendors did not increase so high within the last, I would say, between 2020 and 2023, but the last two years due to inflation and all the topics that we have in an economic situation worldwide, they had to increase the cost prices. 

So show also to Amazon that you didn't increase within the last years before and why you now need to increase. So these are basically the most relevant KPIs. If you are a bigger vendor, then you should also always show to Amazon and push it back. What is your category share? If you are the biggest brand in the category, for sure, it's easier for you to negotiate additional terms. So just ask for it. What is your category share? Are you the number one, the number two within the category? This gives you power. This gives you energy within the API. So basically, these are the most relevant.

Paul Sonneveld
So I was going to ask, you're talking about the concept of leverage here, right? So we're talking about, okay, if you're a big vendor, your brand, you've got lots of organic people, like a lot of people putting in your brand and the search bar and all that. That gives you leverage. And I think a lot of people conceptually understand that. 

But that gets to, so what if you're not like the number one player, or you're not Nike, you don't have this massive brand, right? How do you create leverage in a negotiation? You know, what are the points of leverage? Because I think a lot of our audience might be saying, well, actually, I'm like a midsize vendor, and what are my points of leverage? I don't feel like I have any, I just need to give, right? Well, how would you counter that?

Oliver Tomaschewski
This is what we always hear. So all the vendors they have the feeling that they are so small compared to the big Amazon. But as mentioned, understand your KPIs, and then you know your position within Amazon. But which levers do you have? What can you do? You have to control about your listing. So if you offer Amazon new listings, new top sellers, this is one of the levers that Amazon wants to have. They want to have all the top sellers listed on Amazon. Because this delivers also traffic and gives more attractiveness for Amazon. 

So first of all, new listings. You can always offer them or also decline it so that you solve topics in advance before new listings will be placed on Amazon. But also new marketplaces. So if you are already successful in Germany, in the US or nevertheless work, Amazon is always interested to list also your products on additional marketplaces. Ask for it or also decline it if you want to have more pressure within the discussion. Then also about the funding topic that we already had before. If you want to increase fundings in terms of advertising, in terms of deal fundings, this is a leverage. So take it as part of the negotiation and offer it. And last but not least, if you want to change something in terms of processes, you can also offer new terms. 

For example, if you started just in Germany to be to discuss now about the European part. If you started in Germany and you now want to go to an international perspective, Amazon's offering also turns from a logistical perspective, like PICS or SuperPICS. Ask for it, offer it. So Amazon will have a higher trade term set up. You pay more, but you also get more for it. So you have the levers to just ask for it. 

But what I think is one of the most powerful levers that you have, you have to control over your portfolio. And if there is a big discussion about net PPM, analyse your whole portfolio. And if there are products with a negative or very low net PPM, just delist those products. I know it sounds quite hard to delist products, but it doesn't mean that these products are not sold on Amazon. 

So, if you delist it from the vendor, for sure, Amazon will not purchase it directly from you, but you can sell it also within a seller account if you have this opportunity. If you don't have, there are also other opportunities like broker models. Also, you can just talk to one of your wholesalers, which is maybe already selling products on the Amazon marketplace. So, to summarise it. Or even if you are small, you have a lot of levers to just push back Amazon and take the discussion back to you.

Paul Sonneveld
Yeah, so relevant. And I think the point around product delisting is so unique to Amazon, right? Because I think a lot of Vendors from a traditional background will go, well, if I delist my product from a retailer, I'm gone. I'm out of there. I'll never get back on the shelf. But actually, you can stay on shelf, to use the analogy, through a seller account or maybe a broker or a 2P model, whatever that looks like. So you can actually just switch business models for those particular products, which is quite unique if you think about it from a retailer negotiation point of view. 

Now, just to go back a little bit more on the negotiation, of course, any negotiation, there's always some trade-offs, right? And you're trying to give up the things that don't have much value to you and are of a lot of value to Amazon, trying to make these sort of smart trade-offs, give and get type scenarios. When it comes to AVN and dealing with Amazon, what do you consider, or not just theoretically, but what have you seen in terms of the smart, trade-offs that could really work for some vendors?

Oliver Tomaschewski
Yeah, so I'm personally a very big fan of just moving terms from the MDF. So MDF is market development fund. Basically, most of the vendors pay something between 5 and 10 percent or 4 and 10 percent. This would be the average. But I also saw vendors that are paying 80, 90 or 20 percent for MDF. At the end, this is just margin for Amazon. And it's not about to just ask Amazon to cut this by 50%. This will not happen. But what Amazon is for sure able to do is we just take something out from the traditional MDF and put it into more useful terms. 

Which are these? For example, A plus premium. Most of the vendors, they just have A plus basic available within Vendor Central. And if they want to use A plus premium, they have to pay something between 0.5 to 1.5%. But why not taking 1.5% out of the MDF and push it into the A-plus premium? There are also other terms like a vine flat rate or even additional useful terms, which are mostly, to be fair, quite individual, depending on the situation that the vendor has. 

What we are doing, if we are working with a vendor on the AVN preparation, that we have individual consulting sessions where we really do a deep dive analysis on the current situation, what are the problems, what are the root cause and how could we solve it. And sometimes it's really the perfect way to just put something out of the MDF into more useful terms. And by the way, we have a session for the German-speaking audience, which are here in this meeting, which is on the 24th of September. It's next to Cologne. So if you're interested on a more deep dive AVN session, just contact me afterwards. And yeah, you are happy to invite it. I'm happy to invite you to be part of this intense workshop.

Paul Sonneveld
What a great opportunity. Yeah, so if you're in Germany, obviously, German speaker, is this the Marketplace Convention or is this another event? No, it's an event that we are doing just for our partners here. Perfect, perfect. That sounds like great value. So, I guess a lot of scenario that vendors find themselves in that, Amazon is just being very hard in terms of profitability and pushing back really strongly on the vendor, right? You just got to lift, you got to give us another 200 basis points. 

You know, you're behind the category, you're behind the thing, you're the lowest margin vendor in the category, you're slowing us down, you're diluting my margin, like all those things, right? How do you push back on that, right? Particularly when Amazon comes with all the data and they're full force, what strategies can vendors use to push back on those arguments? Very good question.

Oliver Tomaschewski
So first of all, it sounds very hard. Do not trust Amazon. I was personally in AVN sessions, also in vendor meetings, where the same vendor manager was responsible for two brands that we are managing. And within one session, the vendor manager said that the average, for example, of the net PPM within the category is 30%. And within the other meeting, it was 35%.

So it's always, my personal feeling is that what they tell you, it's mostly 2-3% above what you currently have. They just want to push you to get better margin that you should buy, that the net PPM is not high enough. So first of all, do not trust Amazon. And what I can really recommend to you is that you use external tools. So first of all, to understand your data, one of the tools that we can recommend for sure. Here, the M-Visor tool, it's a tool where you can see what is the average net PPM. So it's like a net PPM monitor where you can type in what is your average cost price and where you can also type in the category. And then you can just see what is the range, the lowest and the highest range, and what is the average so that you have, based on real data and overview, what Amazon can request from you.

Paul Sonneveld
So what about, like, sometimes you do get into this sort of confrontational type scenarios where you're in the middle of negotiation, Amazon might suppress the buy box or even threaten or act on the listings during the negotiations. I know there are some regulations around this sort of behavior in different jurisdictions. How do you, I mean, what advice do you have in terms of as a vendor, how do you deal with those scenarios?

Oliver Tomaschewski
Yeah. So for the European vendors, it's more easier compared to the US vendors because the law or legal situation is different. So it's not so easy for Amazon just to suppress all your products and so on. It happens. This is if Amazon grabs just your product, so the buy box has been suppressed. But from a legal perspective, it's not so easy in Europe. So what can you do? 

First of all, and I think this is the biggest fault that I see within all the conversations that we have, vendors mostly focus on the ADN session or on the AVN period. So before of this, they were not really focusing on the net PPM. And then the surprise is coming in Q3, Q4, when they see that the net PPM just dropped by 300 bits. Then you have an issue. But please focus the whole year on the net PPM on the KPIs that we mentioned before, and then it will be just easier for you to avoid buyback suppressions or anything else. So I think this is one of the most relevant parts here. 

Then, as already mentioned before, if you see that you really have an issue with a product that has a very low net PPM, delist this product in advance, not two or three weeks before the AVN start, but delisted already in the summer, so that the net PPM can increase. Meanwhile, within the AVN session, from a mathematical perspective, the net PPM increased. So prepare it not three weeks before, but prepare it even much, much more before. 

Also, if you have the chance to create some hot bundles, think about it, which products you can bundle. And so that just Amazon can save some shipping fees. So bundle most relevant products into one ASIN. And the good thing is you see it within Vendor Central. So there is a section with the reports where you can see which products are mostly sold together and just create these hard bundles. It will also increase the NPPM and, by the way, also the average order value. 

But I think the most relevant part is here also control your sales channels. When I remember in my former time before I founded the company and I was working for a very big brand in Europe as head of e-commerce and was managing the e-commerce business and Amazon business there. To be fair, the biggest problem was in-house creative. So it's about controlling your sales channel. 

To give you an example, when we were discussing with Amazon on a product, well, the net PPM was always quite high, but then it dropped. We saw that some weeks ago or one, two months ago, There was in the traditional channel a promotion where for example products were sold with 50% price drop and at the end all of these products were coming into the e-commerce segment. So really control your sales channel and control also the people within your company to avoid such situations.

Paul Sonneveld
some really good, it's interesting how sometimes, you know, some of these issues are created internally and, you know, certainly Issues around sales channels and control of things like pricing and all of that can be very, very difficult to solve. But you don't need Amazon for it to fix it, which is probably the good news there. You mentioned before

Oliver Tomaschewski
There's also that’s the hardest part to be shared. 

Paul Sonneveld
Yes. You have to work with your colleagues, right, to… No, I'm just sort of joking. But I know, generally speaking, a General distribution strategy and pricing is a tough one, particularly in industries where there's been a lot of legacy arrangements in place. It's really hard.

Oliver Tomaschewski
Just one idea how we solved it in the past and how a lot of customers are solving this topic. In many of the companies, there is a bonus scheme where you get a bonus for the sales you have within your regions or within your customers. have done in what we already have done with multiple customers is that we changed this bonus scheme not only to a regional bonus but it's a country-specific bonus and if you change this there is no hidden agenda for some people to just push their sales and create some in-house problems with other customers because they are bonus or the bonus is based on the overall bonus of overall sales that you have within the company. And just with this little trick, you can already prevent such situations.

Paul Sonneveld
Yeah, align the incentives appropriately. Interesting, people will always act according to their financial incentives, especially sales people.

Oliver Tomaschewski
Exactly. Therefore, they are hired. 

Paul Sonneveld
Yeah, that's true. That's why they earn bonuses. So let's go back to the hybrid model. So a lot of vendors will have a 3P account maybe in their back pocket, maybe they're actively selling on it. But how viable is it to use this hybrid approach as a fallback in really tough negotiations. I mean, how does Amazon view that and would you recommend it?

Oliver Tomaschewski
Basically, here in Europe, it's a very, very strong argument. We had discussions, or AVNs, who had already this argument, or putting this argument on the table, that if Amazon does not accept what we agreed already, or what the discussion was about, that we would just completely quit from the vendor model and switch to the seller model. If you are able to have this plan B in your pocket, It's a very strong argument. But really prepare it. It shouldn't be an empty argument. So prepare it. And if the situation will come, you also need to do it. Otherwise, you will completely lose the trust on the Amazon side. 

If you are not able to do it within the seller model, so this would be the traditional hybrid model, there are also broker models available. We also offer, by the way, an own broker model with a digital partner from us. So the broker works like this. You sell the products to an external logistic partner and the logistic partner will sell these products within the seller account on the Amazon platform. The nice thing on it is that you are not within the buy box. This is mostly the reason why 1P vendors do not want to sell it within the broker because within the 1P, they can just tell to everyone within the industry, we do not sell on Amazon. Amazon is selling our products. 

If you are doing it within the seller, you are in the buy box and you cannot say we are not selling. So within the broker, this is a very attractive way to just solve this problem. And also to have a temporary backup plan. It's just a quite easy way, like an insurance. You just pay for three, four, five months, the broker, they install the products, they sell it within the AVN session where Amazon stopped offering it product and then you move back to the 1P model. So think about it, use it. For sure it's a little bit more cost expensive than an own seller model, but take it like a fee for an insurance and it's very strong and very tough.

Paul Sonneveld
It's always good to have real plan Bs, right? And you need to have a credit, you know, to your point, when you're negotiating, it needs to be credible, right? If you're not credible and not prepared to follow through, then yeah, that probably won't translate well in terms of financial outcomes for you in terms of the negotiation. Yeah. 

As we sort of start to close out the session, Talk to me about what, you know, when you work with so many vendors, particularly in Europe and in other countries too, what are you seeing right now in terms of just the biggest mistakes? You know, what are the things you can advise that audience on and say, guys, please don't do this. You know, I've seen so many people do that. Let me help you here and get the benefit of at least not making this mistake, right? What would be on your list? What tips do you have?

Oliver Tomaschewski
So first one, know your numbers, as we discussed already before. Know your numbers on a European level and on a country level. What we see very often that companies are just aggregating all the sales on the European level or on a total level, and then you don't really know your numbers on a country-specific level. Secondly, prepare give and get scenarios instead of just offering anything that Amazon is requesting. Never give something for free. If Amazon wants 1% increase, ask for something in exchange. And the last thing would be that vendors just accept too fast, too high MDF terms, because once again, MDF is at the end just margin for Amazon. There is automatic marketing behind it, but you do not get any reporting, anything. To be fair, it's just margin at the end. Do not pay into this, pay for other things that really delivers growth for you.

Paul Sonneveld
Yeah. MDF, it feels like just a big black hole that you put money against, but very hard to hold Amazon accountable to whether the money spent is actually getting an ROI, right? Whereas to your point earlier, if you're able to transfer that into more specific terms, then at least you can measure how you're getting your value from it. You can share the evidence with Amazon. It sets you up for future rounds in a much better space. So that's a really good point. 

Now, we are out of time. And normally, I do have a sort of a standard question, which is around, can you share insights of people you've worked with and all that? But I even have a more specific question for you. And of course, this is going to line up in advance. We did a session last year, and from there, that spurred a number of conversations and follow-up conversations with you, Oliver, and some really great outcomes in terms of working through the AVN. So, you know, given that that conversation was sort of born out of our conversation last year, it'd be great to just, for you to share a little bit more about that particular client and some of the results you were able to achieve there.

Oliver Tomaschewski
I want to share two things with you. First of all, a success story that we had was that we completely reset the terms for two of our vendors. So really discussed with the vendor manager that the current setup is not sustainable anymore. Otherwise, we need to stop delivery and just ask for it. Just really do it. Ask for it. The only thing that Amazon can do is to say no. And within this session, we were able to completely reset the terms. The whole setup, we completely moved into a real pan-European setup and decreased the terms by more than 4%.

Another success story that we have was that one of the participants that was here in the session one year before is now onboarded and we are working with the stand on a very strategic level. And before this vendor was not in a direct relationship with Amazon, so there were no personal meetings, there was no connection to the leadership. So what we first realigned was that we had a top-to-top meeting between the management of the vendor and the vendor manager and the vendor manager's leader. meeting directly in the office with a dinner afterwards. So it was quite successful for the relationship, first of all. And secondly, we also were able to discuss or prepare scenarios with the vendor how to increase the pricing. 

So to implement a cost price increase with Amazon, because the last year, as I mentioned before, this vendor also did not have any big price increases. So we developed some scenarios. And yeah, at the end, the best-case scenario was really possible, or we were possible to push it into the Amazon system. And nearly 10% cost price increase was put into the system. So now the vendor is more profitable. Sales are increasing. We have more funding budget available. So, yeah, at the end, a win-win situation for everyone, even for Amazon, by the way, because due to the cost price increase, we were able to invest more into deals, what was also not happening before. So, yeah, real win-win-win scenario for everyone.

Paul Sonneveld
Yeah, that's a great success story. And of course, in the limited time you have, you make it sound like an easy, you know, just we get this and this and this and how wonderful it is. But, you know, I think it does highlight the benefit of working with someone like yourself, who is across so many negotiations at the time and sort of takes a much broader perspective to these negotiations and obviously has the relationships there as well. So I think that is some real credit there. And, you know, it's really, really great to hear. I know some of these conversations were brought out of this own podcast, so that is absolutely fantastic. 

Oliver Tomaschewski
Thank you.

Paul Sonneveld
All right, now I don't think, I'm surprised we don't have any questions today which is maybe everyone is tuning in from the beach in the south of France or somewhere. So we'll have to wrap up here, Oliver, but I want to just say thank you. Thank you for again appearing on our weekly live podcast here and just sharing all these insights, all this data. I think for those of you that are watching this on demand, I think it's almost just a great playbook to listen back and help you prepare for AVN. So thank you so much and giving us so much kind of fuel to run with when it comes to preparing for AVN. 

Now, for those of you watching or listening online and you want to connect with Oliver, later on, what we'll do is we'll make sure that we include his contacts in the show notes. And also, I know that we will tag him from a LinkedIn point of view, so you'll be able to hit him up there. But yeah, this has been really great. And I found to our audience, I hope you found this useful in terms of AVN preparation. So yeah, please join me in thanking Oliver for his time today and appearing as a guest on our AVN topic today. Thank you so much, Oliver. 

Oliver Tomaschewski
Paul, thank you very much.

Paul Sonneveld
Take care, and good luck with the live session in a couple of weeks as well. 

Oliver Tomaschewski
Thank you very much. 

Paul Sonneveld
All right, everyone, that is it for today's episode. Don't forget, you can explore all of our past episodes and register for upcoming ones. We've got one coming up on how do you specifically deal with cost price increases as a vendor, really from a North American point of view, actually. We're dealing with that next week, so go and check that out. And of course, if you're looking for better analytics, you know, looking at, you know, your net PPM byproduct and comparing that to your own profitability at a product level, whether it's selling or sell out, make sure to talk to us and we'd love to show you how MerchantSpring can help you do this and prepare for this year's Amazon vendor negotiation rounds. My name is Paul Sonneveld. Thank you so much for tuning in and we'll see you next time. Take care.