Winning Amazon Vendor Negotiations in 2025: AVN, Cost Justification, and Margin Protection for 1P Brands
For 1P brands on Vendor Central, annual vendor negotiations and in-cycle terms discussions often have more impact on profitability than any single promotion or advertising test. Amazon’s 2025 AVN cycles have become more data-driven and margin-focused, which means vendors must walk into negotiations with a clear strategy and detailed numbers.
AdOrbix works with vendors to defend margin, design cost-justification stories, and decide when shifting part of the catalog to Seller Central makes economic sense.
How Annual Vendor Negotiations Work in 2025
In a typical AVN, Amazon focuses on improving its economics through higher trade terms, base accruals, and contributions, often without offering equivalent upside in exposure or support. At the same time, brands are dealing with rising manufacturing, freight, and regulatory costs that pressure their own Net PPM.
AdOrbix uses performance and profitability data to build a coherent narrative that connects your investments and constraints to the terms you can reasonably accept.
Using Cost Justification Requests (CJR)
Cost Justification Requests have become a critical lever for vendors needing price or terms adjustments. Successful requests typically include documented increases in manufacturing, logistics, tariffs, and compliance costs, tied directly to specific SKUs and time periods. AdOrbix links CJRs to SKU-level profit models, demonstrating how proposed price changes restore sustainable Net PPM while keeping retail pricing and customer value competitive.
SKU Rationalisation and Strategic Bundling
Not every SKU will survive the next negotiation cycle—and that is a feature, not a bug. Brands can often improve profitability by discontinuing consistently low-margin SKUs and emphasizing bundles, multipacks, or premium versions that increase average selling price and margin headroom.
Using the profitability framework described earlier, AdOrbix identifies SKUs to sunset, bundle, or position as strategic hero products ahead of AVN discussions.
Leveraging the AVN Tool and Data-Led Storytelling
Many vendors now interact with Amazon primarily through the AVN tool when negotiating, rather than only via vendor managers. The most successful submissions include clear targets for Net PPM, freight and damage assumptions, and well-supported investment rationales. AdOrbix prepares AVN inputs that align with how Amazon evaluates proposals internally, increasing the probability of more favorable terms without unnecessary concessions.
Choosing Between Vendor Central and Seller Central
Vendor terms should always be compared against a realistic Seller Central scenario. In some cases, 1P wholesaling will remain the best structure; in others, a 3P strategy with more pricing and inventory control can deliver stronger margins and strategic flexibility. AdOrbix models 1P and 3P unit economics at the SKU level, helping brands build a hybrid architecture that uses both Vendor Central and Seller Central to optimise long‑term profitability.
References & Further Reading 2025 guides to Amazon annual vendor negotiations and AVN best practices Articles on vendor terms, Net PPM, and data-led AVN preparation Commentary on AVN 2025 trends and Vendor Central to Seller Central shifts
Frequently Asked Questions
What are the Amazon Annual Vendor Negotiations (AVN)? Ans. AVN stands for Amazon’s annual process for revisiting trade terms, prices, and contributions for Vendor Central Brands.
Why are AVNs more important in 2025? Ans. The 2025 AVNs reflect a greater focus on margins and data, which has P3 implications for Net PPM and future profitability.
What is Net PPM in Vendor Central? Ans. Net PPM includes the profitability of vendors after accounting for all Amazon charges, accruals, shipping, and chargebacks.
What is a Cost Justification Request (CJR)? Ans. A CJR is a request for adjustment that is made on the basis of recorded cost increases.
Documents required to ensure a successful CJR? Ans. Manufacturing, freight, tariff, compliance, and logistics costs for specific SKUs.