Retail Analytics Net PPM

Table name: retail_analytics_net_ppm

This table replaces data from net_ppm.

PPM stands for product profit margin. Net PPM is the net margin that Amazon can expect to make on a product based on vendor-provided funding.

For example, if you sell widgets to Amazon for $50, and they are retailing for $100, the PPM is 50% if there are no other factors in play. If you provide Amazon $5 in funding, then Net PPM is 55% (Amazon's net margin after selling your product).net PPM through product costs, co-op agreements and accrual agreements.

A co-op agreement is any agreement where the vendor funds some sort of advertising or marketing activity (example: coupons or placement).

The accrual agreement includes the freight allowance, which is where the vendor uses Amazon's freight network and then Amazon charges them a percentage for the privilege. It also includes damage allowance, where Amazon handles damaged products instead of the vendor for a percentage fee.

Note: Net PPM does not include Amazon's operational costs (i.e. shipping, fulfillment costs, etc.).

Net PPM is the main negotiating point when it comes time to meet with Amazon quarterly to discuss terms. You both look at your performance during these meetings and negotiate on goals. Amazon may decide that, say, they want to see the profitability of this product category go up by 3% in the next quarter and so therefore they want net PPM to go up.  Being able to track Net PPM trends, can provide meaningful data in how you may want to push back during negotiations.

Data Dictionary