Amazon CRaP and Low Net PPM: Where the Line Really Is, and How to Get an ASIN Off the List

Your vendor manager says a few ASINs are "trending CRaP," or a buyer tells you margin on part of the catalog is too low, and you ask the obvious question: too low compared to what? The answer depends on who you ask. An agency might say 40%, a tool vendor 35%, and a blog post 55%, but none of them is quoting Amazon, because Amazon has never published the number.

This guide covers what CRaP is, why the quoted thresholds disagree with each other, how to tell a real margin problem from a noisy week, and what to change on an ASIN before Amazon changes how it buys it.

What CRaP Actually Is

CRaP stands for Can't Realize a Profit. According to SPS Commerce, the term was coined by Amazon's Finance Department as an internal label, and MerchantSpring describes it the same way.

The metric underneath it is Net PPM, Amazon's net pure product margin on your items, which Amazon calculates in a Retail Analytics report for your account in aggregate and for each ASIN. Our Net PPM glossary entry covers the formula and what the number leaves out, and our guide to finding and tracking Net PPM in Vendor Central walks through pulling it by ASIN. For this piece, the working definition is simple: Net PPM is how profitable your item is for Amazon, and a CRaP ASIN is one where Amazon has decided that margin is too thin to keep supporting.

There Is No Published Threshold

Search for a Net PPM cutoff and you'll find confident numbers. Here is what four of the pages that rank for it say, side by side:

Each source frames the numbers differently, and none of them cites Amazon or each other. They're rules of thumb that vendor managers and agencies have passed around, which makes them useful for a rough sense of where your category sits but gives you nothing to point to in a negotiation.

The 55% figure deserves its own warning, because it's the number most often repeated as if it were the bar, and it actually comes from a worked example of the formula. Reason Automation's help page sets a $50 vendor cost against a $100 retail price, which gives a 50% base margin, then adds $5 of vendor funding to reach 55%. That arithmetic shows how the formula behaves and says nothing about where Amazon draws a line. SellerApp's own worked example, built from a $49.99 average selling price, lands near 41%, so the same formula produces a different figure as soon as someone plugs in different inputs.

Persistence Matters More Than Any Single Week

Whatever line you pick for your category, a single week below it tells you very little, because weekly Net PPM moves for reasons that have nothing to do with whether an item can make Amazon money over time. A price promotion can drop shipped revenue for a week, a batch of returns can land in one period, and a co-op accrual can book against a single week and then disappear. Any one of those can push a healthy ASIN under 35% or 40% for seven days.

Volume matters too. An ASIN that ships a handful of units a week can swing several points on a single order, so a low number on a low-volume item is a reason to look closer and then wait for more weeks of data before you act on it.

We recommend a four-week rule: treat an ASIN as a CRaP candidate worth acting on when it has sat below your category line for four consecutive weeks while shipping real unit volume. Four weeks is long enough that a single promotion or returns spike can't explain the pattern, and short enough that you're still acting before the later stages described below begin. That window is our own judgment from watching how the weekly report behaves, and it isn't an Amazon rule.

What Happens Once Amazon Treats an ASIN as CRaP

The consequences arrive in stages, and the sources that describe them agree on the sequence more than they agree on any percentage. Drawing on MerchantSpring, SPS Commerce, and Intentwise, the usual progression is:

1. Advertising and promotions pause. Intentwise describes the ASIN being labeled "Ineligible ASIN" and its media campaigns pausing automatically.
2. Subscribe & Save drops the item. MerchantSpring and SPS Commerce both list removal from the program.
3. The Buy Box weakens. Amazon may suppress the Buy Box or concede it to third-party sellers, and Intentwise notes it may ask you for more trade funding.
4. Purchase orders shrink, then stop. Intentwise describes POs reducing by algorithm before they stop altogether.
5. The item is delisted.

Because the sequence is staged, a paused campaign or an item dropped from Subscribe & Save works as an early warning, and when you see one it's worth checking the ASIN's Net PPM history before PO quantities start falling.

The Levers

Each lever below moves a specific input to the margin Amazon earns on the item.

• Cost. Your cost price is what Amazon pays you, so a lower cost through sourcing or renegotiation raises Amazon's margin directly, unit for unit.
• Pack size and SIOC. A larger pack or bundle raises the price of each unit Amazon sells, and MerchantSpring recommends it for thin-margin items. Certifying the item as SIOC removes the prep and overbox handling Amazon would otherwise apply.
• Price. When Amazon's selling price has fallen and your cost hasn't, the margin compresses on its own, and that's the conversation to have with your vendor manager before you touch cost.
• Co-op terms. Vendor funding counts toward Net PPM, which is why the 55% worked example adds it. The rates in your co-op agreement come out of the Annual Vendor Negotiation (AVN), so that's where this lever gets worked, and Intentwise notes Amazon may ask for more funding on a weak item.
• Returns. Repeat vendor returns against one ASIN keep eating that item's margin, so a returns problem on a single item is worth fixing at its cause.

A Weekly Monitoring Routine

1. Pull Net PPM weekly at the ASIN level, because the account average hides which items are carrying it.
2. For each ASIN, record the week's Net PPM and units shipped, and keep a running count of consecutive weeks below your category line.
3. Flag any ASIN that reaches four weeks below the line with meaningful volume.
4. Before acting on a flagged ASIN, reconcile it against the deductions Net PPM leaves out: chargebacks, freight, and co-op as it actually came off your remittance. As the glossary entry puts it, a catalog can show a healthy Net PPM while the remittance says something else entirely. Reason Automation describes one account where the standard report read 42.5% and the reconciled figure, with actual co-op deductions included, came to 54.5%.
5. Pick the lever that matches the cause, then watch the next four weeks to see whether the number moves.

For the full catalog of reports this routine draws on, see our Vendor Central report definitions.

Where InsightLeap Fits

InsightLeap reports Net Pure Product Margin at the product level and flags products at risk of being delisted by Amazon, so the ASINs worth a closer look are already marked when you sit down to review the catalog. The features page covers what it includes.

The Takeaway

Amazon hasn't given you a number to argue over, so work with what you do have: the weekly Net PPM report and a rough rule of thumb for your category. Watch for ASINs that stay below your line for four weeks with real volume, reconcile them against your remittance, and change the cost, pack, price, co-op, or returns picture before PO quantities start to fall.