![MS_Master_Horizontal_Reversed (1).png]](https://help.merchantspring.io/hs-fs/hubfs/MerchantSpring%20Logos/MS_Master_Horizontal_Reversed%20(1).png?height=30&name=MS_Master_Horizontal_Reversed%20(1).png){kind=small}
What are raw margin and net PPM in Amazon Vendor reporting?
Raw margin starts with retail revenue and product cost; net PPM also reflects negotiated vendor funding.
Raw margin and net pure product margin are Amazon-side measures used to understand the economics of products purchased from Vendors and resold to customers.
What is raw margin?
Raw margin measures the difference between:
- Amazon’s retail revenue from selling the product, excluding applicable tax
- The headline product cost Amazon pays the Vendor before commercial deductions
The simplified calculation is:
Raw margin = Amazon retail revenue excluding tax − headline product cost
For example:
- Customer price including tax: $20
- Amazon retail revenue excluding tax: $18
- Headline product cost: $10
- Raw margin: $8
Raw margin represents the basic difference between Amazon’s revenue and the agreed product cost before Vendor funding is considered.
What is net PPM?
Net PPM stands for net pure product margin.
It builds on raw margin by including the benefit of applicable Vendor funding, such as negotiated terms, allowances, deductions and rebates.
The simplified calculation is:
Net PPM = raw margin + applicable Vendor funding
Continuing the example:
- Raw margin: $8
- Applicable Vendor funding: $2
- Net PPM: $10
The $2 improves Amazon’s product margin because it reduces the effective amount Amazon pays for the inventory.
What is the difference?
| Measure | What it includes | What it shows |
|---|---|---|
| Raw margin | Retail revenue excluding tax and headline product cost | The basic retail spread before Vendor funding |
| Net PPM | Raw margin plus applicable terms, deductions and rebates | A fuller view of Amazon’s product economics after Vendor funding |
Why does the distinction matter?
A product can have a modest raw margin but a stronger net PPM when Vendor funding is included.
Reviewing both measures helps explain:
- Why Amazon’s effective product margin differs from the initial retail spread
- How negotiated commercial terms affect product economics
- Why products with similar retail prices and costs can have different net PPM results
- How changes to Vendor terms may affect Amazon’s view of profitability
Important notes
Raw margin and net PPM are Amazon-side margin concepts. They should not be confused with the Vendor’s own gross margin or net profit.
The figures above are simplified examples. Actual calculations depend on the available Amazon data and the commercial terms applicable to the Vendor code, product, marketplace and reporting period.
Need help?
Contact support@merchantspring.io and include the relevant account, Vendor code, ASIN, reporting period and any helpful screenshots or exports.