This is not exactly what is happening. Amazon is just keeping brands that are generating revenue (1-2 million is not enough, i'm talking of brands which are making 10M-100M at the very least). Vendor Manager will now focus only in these brands while AVS will be externalised in country like India. If you receive this letter it's because you are not interesting enough for Amazon to stay on Vendor Central, the revenue/margin is not worth the struggle of a VM.
I have gotten a similar feeling. We have a hybrid account and now Amazon is trying to force us to go exclusively VC. We're just above the 10M threshold on the VC side but are way above it on SC. It feels like AMZ cleaned house on VC and are now exclusively focusing on bigger brands.
Vendor central give you personal amazon support. This support can overwrite brand names for you and steal ASIN as my competitor has done to me. It also sell stuff bellow shipping cost. Amazon can sell something for 9.99 while my fba fee only would be 10.99. But amazon will happily give my competitor 4.99 for their product making them easy 2-3$ as they don't have to pay "FBA" fees to themselves. maybe thats why they getting rid of it. less money for them
Not it's not working like that. A Vendor has a net ppm target fixed by the VM. Even if Amazon sell under a price point or at a very low price because Amazon is matching someone else or a 3P seller, in the end you are responsible for the net ppm target and therefore Amazon will either ask you to pay for a CSA (at the end of each month) to pay for the gap between the current net ppm and the net ppm target OR will delist the product. If a vendor is not profitable, Amazon remove selection, CRAP the product and in the end can terminate the account.
