About The Report
Amazon’s Net PPM within the Net PPM Report is read as a percentage and is calculated as: (Average Selling Price - Cost Price + Trade Terms) / Average Selling Price
Trade Terms are the additional “Above-the-Line” funding dollars you provide to your vendor manager including terms for shipping allowances. 1P Sellers usually negotiate these trade terms annually then meet quarterly with their vendor manager to review Net PPM.
While the threshold for what is considered healthy Net PPM is unique to each ASIN, general category guidelines for Net PPM are above 35% for softlines/CPG and above 40% for hardlines. The heavier your ASIN is to ship, the higher your healthy Net PPM threshold will be for that ASIN. It’s important to work with your vendor manager to understand the Net PPM thresholds they have been tasked by their leadership to achieve for your business, both in totality for your portfolio but also at the ASIN level.