Episode #14 - Brian Khzouz: Inside the amazon machine
Nov 9, 2023
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Former Amazonian Brian Khzouz shares his journey from vendor management to the brand side and discusses negotiating with his former boss. He navigated multiple product categories, shares insights into promotional planning, and reveals what it's like working for Bezos.
When planning promotions on Amazon, it is crucial to consider margin, inventory projections, and sales, and create a master template to identify products with sufficient margin and inventory.
Engaging with Amazon vendor managers requires understanding key metrics like net PPM, revenue growth rates, and market share, while vendors take ownership of promotional planning and execution.
Deep dives
Planning Promotions on Amazon
When planning promotions on Amazon, it is essential to carefully consider margin, inventory projections, and sales. One strategy is to create a master template that identifies products with sufficient margin room and inventory. Additionally, estimating the lift or increase in demand during promotional periods is crucial. It is common to use a tiered approach, where a 10% discount may result in a 2x lift, while a 20% discount could generate a 3x or 4x lift. It is important to prioritize being a 'Best Deal' to secure a spot on the highly-trafficked Deals page. Additionally, vendors should expect negotiations with Amazon regarding funding, as the company often requires vendors to provide 100% funding for promotions. Planning for a higher promotional budget than initially expected is recommended due to potential price fluctuations and additional audits throughout the process.
Working with Amazon Vendor Managers
Engaging with Amazon vendor managers can be a complex process. It is crucial to establish a clear understanding of the metrics that matter, such as net PPM (Profit Per Thousand), revenue growth rates, and market share. Vendor managers typically focus on optimizing profitability while working with vendors to develop their business. However, it is important to note that vendor managers have limited visibility into Amazon's pricing mechanisms, and the responsibility of planning promotions and executing strategic sales falls primarily on the vendors. Establishing a good relationship with vendor managers and providing them with insights about opportunities for growth can be helpful, but ultimately, vendors must take ownership of their promotional planning and execution.
The Negotiation Process and Funding Considerations
Negotiating promotions on Amazon requires careful consideration of funding requirements and adherence to Amazon's pricing mechanisms. Vendors should anticipate audits, inventory considerations, and pricing fluctuations that may result in increases to funding percentages demanded by Amazon. It is recommended to plan for a higher budget than anticipated to accommodate these fluctuations and negotiations. Understanding that Amazon requires vendors to provide 100% funding for promotions is essential, and vendors should plan strategically to ensure profitability while maintaining a competitive edge. Overshooting the promotional budget estimation by a significant margin allows vendors to navigate negotiations and select the most effective deals.
Key Considerations for Deal Planning and Execution
Deal planning on Amazon involves a multi-stage process that requires attention to various details. Vendors should start by analyzing their product catalog and strategically identifying deals that are profitable, have sufficient inventory, and align with their promotional budget. Optimal discounts may range from 10% to 20% depending on the product and desired lift in demand. Being a 'Best Deal' and securing a position on the Deals page is important for visibility and traffic. Vendors must also be prepared for ongoing negotiations with Amazon and understand that Amazon's pricing mechanisms and funding requirements can fluctuate throughout the planning and execution process. Ultimately, careful planning and strategic decision-making can help vendors maximize their promotional investments on Amazon.
Join us for an exclusive glimpse behind the Amazon curtain! In the latest episode of the Online Selling Partner Podcast, host Isaiah interviews Brian, a former Amazonian who transitioned from vendor management to the brand side. Discover Brian's journey from the epicenter of Amazon's first Prime Day to negotiating with his former boss. He's navigated multiple product categories, from luxury audio to automotive, and shares insights into the world of promotional planning. Find out what it's like working for Bezos and how vendor managers can help your brand succeed.
