Why Tariffs, AVN, and CSAs Are Forcing Brands to Rethink Their Amazon Strategy

The Amazon landscape is changing faster than most brands expected, and the pressure is coming from every direction. Tariffs are driving up landed costs. Amazon’s AVN (Annual Vendor Negotiations) has shifted from a collaborative conversation to a one-sided margin recovery exercise. And Cost Support Agreements (CSAs) are quietly becoming long-term deductions that erode profitability year after year.

Individually, each factor is challenging.

Together, they’re creating a structural shift in the Vendor Central ecosystem that brands can no longer ignore.

Tariffs Don’t Negotiate — They Take Margin

One of the most overlooked realities of the marketplace is that tariff increases hit vendors immediately, while Amazon’s retail pricing remains frozen. Your factory quote rises the moment your new costs take effect, but Amazon’s wholesale expectations don’t move with it.

When tariffs add 15–40% to your landed costs, yet retail prices stay fixed, the vendor ends up absorbing 100% of that impact. And because Amazon rarely approves price increases, those margins never recover.

This dynamic is turning Vendor Central into a quiet recession: top-line growth looks fine, but bottom-line contribution is shrinking every quarter.

AVN Is No Longer a Negotiation — It’s a Margin Recapture Tool

AVN used to feel like a partnership discussion. Today, it feels more like a one-way spreadsheet. Amazon’s asks are increasingly rigid: lower wholesale, more co-op, guaranteed margin performance, and frozen retail.

The challenge is that brands are being asked to give more margin at the exact moment their cost structure is under the most pressure. Tariffs raised COGS. Freight increased. Raw materials spiked. Meanwhile, Amazon’s profitability is tightening — and vendors are being asked to make up the difference.

It’s no longer a negotiation. It’s a formula.

CSA: The Polite Margin Trap

Cost Support Agreements often appear as a short-term solution, but they are one of the most dangerous contractual traps a brand can accept. CSAs auto-renew, scale with volume, and become the new “baseline” for future AVN cycles. In practice, they represent a recurring deduction on every unit shipped — a permanent penalty for your rising costs.

CSA doesn’t protect you.

It protects Amazon’s retail margin.

And once in place, they’re incredibly difficult to unwind.

Why More Brands Are Evaluating 3P

Brands aren’t exploring 3P because it’s trendy. They’re exploring it because the economics of Vendor Central have fundamentally changed. When tariffs rise, when AVN tightens, and when CSA appears, brands start asking the same question:

“What would this look like if we controlled the retail price?”

For most, the answer is simple:

3P provides healthier economics, greater flexibility, and more control.

In a 3P model, brands can adjust pricing to reflect real costs, manage inventory on their terms, stabilize forecasting, and operate with predictable margins — without waiting for Amazon’s permission.

How AMZ Atlas Helps Brands Make the Transition

For many brands, the biggest barrier to moving into 3P isn’t desire — it’s capital and operational lift. That’s why AMZ Atlas Capital Services exists.

We buy inventory.

We own the risk.

We run the 3P operation.

You regain control of retail, pricing, and margins.

At a time when tariffs, AVN, and CSA are reshaping the Vendor Central landscape, control is the most valuable asset a brand can have. And a properly executed, capital-supported 3P model is how brands take that control back.