Over the long-term, hitting your bottom line targets are essential when operating on Amazon. 📈
You'll see it in the form of one KPI:
** NetPPM **
But what makes up this metric?
Let's take a look...
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Net Pure Profit Margin, otherwise known as NetPPM, is the KPI used by Amazon when talking about a vendor's bottom-line performance 🎭
🧮 There are two ways to calculate it and I'll explain the components after...
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(1) You can do it on a per product basis, using the formula:
NetPPM (%) = (List Price w/o Tax - Product Cost + VFCC) / (List Price w/o Tax)
List Price w/o Tax = price of product (w/o sales tax)
Product Cost = price product is sold to Amazon
VFCC = Vendor Funded Contra Cogs
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(2) You can do it on an overall level:
NetPPM (%) = (Revenue - PCOGS + VFCC) / (Revenue)
Revenue = List Price w/o Tax X Units Sold
PCOGS = Product Cost X Units Sold
VFCC = Vendor Funded Contra Cogs (i.e. basically funding given to Amazon by the vendor)
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You can use either formula (1) or (2) and play around with the numbers to get the NetPPM you are looking for over:
- Certain Timelines
- With a product or whole catalogue
- Deal NetPPM
- Forecasted NetPPM
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Improving your NetPPM is vital to ensuring a healthy business on Amazon. Why not visit theamazonian.co where:
- you can get free vendor & seller resources
- a weekly newsletter where you get free tips and strategies
- the option to join a course created by an ex-Amazon
You can read the unrolled version of this thread here: typefully.com/TheAmazonian_/SHuoGu5