Net PPU

Net Pure Profit Per Unit (Net PPU) is a unit-level profitability metric used by Amazon in the Vendor Central (1P) model to assess how much net profit is made on each individual unit sold. Unlike percentage-based metrics like Net PPM, Net PPU expresses profitability in absolute dollar terms.

Formula:

Net PPU=Average Selling Price−Average Cost per Unit+Contra-COGS

Where:

• Average Selling Price (ASP) is what the customer pays Amazon
• Average Cost per Unit (ACU) is what Amazon pays the vendor
• Contra-COGS includes vendor-funded offsets like co-op, MDF, freight allowances, and other trade terms that reduce Amazon’s cost

Why Net PPU matters:

• Offers a clear view of unit profitability in dollars, not just percentages
• Important during profitability reviews, JBP planning, and product delisting decisions
• Helps vendors understand how discounts or funding programs impact real earnings
• Used by Amazon to prioritize ASINs for promotions or deal placements

💡 Example: If a product sells for $100, Amazon pays $80 to the vendor, and the vendor provides $5 in Contra-COGS, then:

Net PPU=100−80+5=$25 net profit per unit

In short:
Net PPU (Net Pure Profit Per Unit) is the dollar amount Amazon earns per item sold - a vital profitability metric that combines price, cost, and vendor support to reflect true margin.