Introduction
Amazon is often one of the fastest-growing channels in PE portfolios — and one of the least understood.
Revenue growth on Amazon frequently conceals margin destruction.
The Illusion of Amazon Growth
Amazon dashboards emphasise:
- Sales
- ROAS
- Rankings
What they obscure:
- True contribution margin
- Cost stacking
- Operational inefficiencies
This leads to false confidence.
Common P&L Mistakes
Across portfolios, we repeatedly see:
- Advertising spend treated as variable, not structural
- Promotions eroding long-term pricing power
- Returns and chargebacks underestimated
- Review velocity mismanaged
- Content under-optimised for conversion
Individually these seem minor. Collectively they are material.
Attribution Myths
Amazon’s reporting incentivises spend, not profitability.
Without independent contribution analysis, businesses optimise the wrong levers.
What “Healthy” Amazon Looks Like
A commercially sound Amazon channel has:
- Clear contribution margin visibility
- Structured review generation
- Disciplined ad spend governance
- Content optimised for conversion, not aesthetics
- Operational alignment with finance and supply chain
EVOS Perspective
Amazon should be treated as a profit centre, not a growth vanity channel.
When governed correctly, it becomes a powerful value driver.
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