Want to grow your Amazon business? You need to invest in smart sourcing strategies and take the time to build the supplier relationships that give you the most gross profit potential. Check out the slides from the Private Label Movement's Webinar hosted by Kevin Rizer and Payability's Brent Cohen.

1. SMART SOURCING
TO MAXIMIZE
GROSS PROFIT
PRIVATE LABEL MOVEMENT
Host – Kevin Rizer
Guest – Brent Cohen

2. SMART SOURCING TO MAXIMIZE GROSS PROFIT
WHO ARE WE?
KEVIN RIZER
FOUNDER AND HOST
PRIVATE LABEL MOVEMENT
PRIVATE LABEL BRAND OWNER

3. WHO ARE WE?
SMART SOURCING TO MAXIMIZE GROSS PROFIT
BRENT COHEN
SALES DIRECTOR AT
PAYABILITY

4. For Private Label Amazon Sellers, and all merchants, sales prices can
fluctuate wildly (and frequently) throughout a product’s lifecycle. With volatility
on the revenue side, what can you do to manage COGS (cost of goods sold) in
order to maximize gross profit? In this webinar you’ll learn smart sourcing and
negotiating strategies to maximize and realize the gross profit on the buy side.
SMART SOURCING TO MAXIMIZE GROSS PROFIT
WHAT WILL WE COVER TODAY?

5. • CHOOSING THE RIGHT SUPPLIERS
SMART SOURCING TO MAXIMIZE GROSS PROFIT
WHAT WILL WE COVER TODAY?
• BUILDING SUPPLIER RELATIONSHIPS
• FINDING NEGOTIATING LEVERAGE
• CALCULATING GROSS PROFIT POTENTIAL

6. SMART SOURCING TO MAXIMIZE GROSS PROFIT
INTRODUCTION
a) Profit = Revenue - Expenses
b) It is tempting to focus most on the revenue half of the equation
c) Regularly evaluating expenses can have major a impact on profit
d) COGS is often the largest component of expenses

7. SMART SOURCING TO MAXIMIZE GROSS PROFIT
CHOOSING THE RIGHT SUPPLIERS
a) Beware of monopoly suppliers
b) Beware of suppliers who may counterfeit
c) What to look for

8. SMART SOURCING TO MAXIMIZE GROSS PROFIT
BUILDING SUPPLIER RELATIONSHIPS
b) Meet in-person (if possible)
a) Good relationships pay off in good times and bad times

9. SMART SOURCING TO MAXIMIZE GROSS PROFIT
NEGOTIATING LEVERAGE
a) Cash money
b) Other suppliers
c) Consistency
d) Guarantees
f) Beating their terms = leverage (e.g. pay early for a discount)
e) Long-term relationship

10. SMART SOURCING TO MAXIMIZE GROSS PROFIT
CALCULATING GROSS PROFIT POTENTIAL
Example 1: Guaranteed Volume
Monthly Annual
Revenue $100 $1200
COGS $40 $480
Gross Profit $60 $720
% 60% 60%
No Negotiation
Monthly Annual
Revenue $100 $1200
COGS $40 $444
Gross Profit $60 $756
% 60% 63%
With Negotiation

11. SMART SOURCING TO MAXIMIZE GROSS PROFIT
CALCULATING GROSS PROFIT POTENTIAL
Example 2: Be a Consistent Buyer from Your Supplier
Monthly Annual
Revenue $100 $1200
COGS $40 $480
Gross Profit $60 $720
% 60% 60%
No Negotiation
Monthly Annual
Revenue $100 $1400
COGS $40 $560
Gross Profit $60 $840
% 60% 60%
With Negotiation

12. SMART SOURCING TO MAXIMIZE GROSS PROFIT
CALCULATING GROSS PROFIT POTENTIAL
Example 3: Beat Their Payment Terms
Monthly Annual
Revenue $100 $1200
COGS $40 $480
Gross Profit $60 $720
% 60% 60%
No Negotiation
Monthly Annual
Revenue $100 $1200
COGS $38 $456
Gross Profit $62 $744
% 62% 62%
With Negotiation

13. SMART SOURCING TO MAXIMIZE GROSS PROFIT
CONCLUSION = ALWAYS NEGOTIATE
a) What relationships can create a win-win?
b) What do you value and your suppliers do not? Vice versa?
c) Show your commitment to the business long-term