- Co-op is the money a Vendor gives Amazon, usually as a percentage of purchases or for individual promotions.
- It's deducted automatically from payments, so it needs reconciling against the agreements you signed.
- Errors in percentages, validity dates or promotional amounts are more common than you'd think.
- In negotiations, it pays to tie every fund to a measurable result.
For many Vendors, co-op and marketing funds are the heaviest of all Amazon’s deductions, more than shortages and chargebacks combined. Yet they’re also the least checked, because once the agreement is signed they’re taken for granted. Here are the most common types of agreement, how to check the deductions are correct and how to negotiate them by tying them to concrete results.
What co-op is on Amazon Vendor
Co-op refers to the contributions a Vendor makes to Amazon for marketing, promotion or sales support. You don’t pay them by bank transfer: Amazon calculates them and withholds them from invoice payments, or raises separate invoices that are then offset. That’s why, if nobody checks them, they become invisible.
The base terms are usually set during the annual negotiation. Others are added during the year, tied to specific promotions or events.
The most common types of agreement
Names and structures can change between marketplaces and over time, but these are the main families:
| Type of agreement | How it works | What to check |
|---|---|---|
| Percentage of purchases | A fixed share of the value of what Amazon buys (often called base co-op or marketing fund) | Percentage applied, calculation basis, validity dates |
| Promotional agreements | The Vendor funds a discount for a period or event, usually per unit sold | Period, ASINs included, amount per unit, units counted |
| Price protection | The Vendor compensates Amazon when it lowers the cost price on stock already held | Units in stock at the date of the change, amount credited |
| Visibility and advertising funds | Contributions tied to placements, campaigns or specific programmes | What was delivered and with what results |
| Allowances | Fixed contributions for damage, freight or other operating costs | Percentage compared with actual costs |
Technically allowances aren’t co-op, but they appear together in your payments and should be checked the same way.
How to check the deductions are correct
The principle is simple: every euro deducted must match a signed agreement, at the right percentage, on the right basis and in the right period. In practice the check works like this:
- Gather the agreements: annual terms, promotional agreements, changes made during the year. Each with start and end dates.
- Download the deductions: from Vendor Central, the co-op invoices and the payment details showing what was offset.
- Recalculate: apply the agreed percentages to actual purchases in the period and compare with what was deducted.
- Check the promotions: for each event, make sure only the agreed ASINs are counted, on the agreed dates and at the agreed amount per unit.
- Isolate the differences and dispute them within the deadlines shown in Vendor Central.
The errors we find most often
- Old percentages applied after a new agreement has come into force, or the other way round.
- Promotional agreements still being charged after the event has ended.
- Units counted twice, for example on both parent and child ASINs.
- Price protection calculated on stock quantities higher than the real ones.
- Funds for programmes the Vendor never joined, or only partly joined.
You’ll only find these errors by recalculating, not by looking at the total. It’s the same work we do on shortages and chargebacks in our Vendor recovery service: every deduction is reconciled against documents and agreements, line by line.
It’s a good habit to run this check every month, not at year end. Promotions overlap, agreements change, and after twelve months working out what applied in which period becomes slow and uncertain. A monthly check takes little time and leaves room to dispute within the windows.
Reading co-op in terms of margin
A 5% co-op looks small until you compare it with your margin. Hypothetical example: a product sold to Amazon at 30 euros with a 25% gross margin, so 7.50 euros. 5% base co-op is worth 1.50 euros per unit. If the same month includes a promotional agreement of 2 euros per unit sold, on those units margin falls to 4 euros, just over half. Seen this way, it’s easier to judge whether a promotion makes sense and how much it needs to lift sales to pay for itself.
The same logic applies to price protection. If Amazon lowers the cost price and asks you to compensate for stock it already holds, the amount depends on how many units are in its warehouses at that moment. A Vendor who pushes a lot of sell-in just before a price change pays more. It’s worth knowing in advance when a change is coming and adjusting shipments accordingly.
Our advice is to look at co-op as a cost per ASIN, not as an average percentage across the account. Some products carry it comfortably, others are loss-making at current co-op levels.
How to negotiate it by tying it to results
In negotiations Amazon often presents co-op as a cost that’s simply due. Vendors have more leverage if they shift the discussion to results. Some levers:
- Tie funds to objectives: for example, a promotional contribution in exchange for a place in an event with defined visibility.
- Ask for measurement: sales during and after the promotion, a comparison with the same period without promotion, new-to-brand customers where available.
- Prefer measurable tools: move part of the budget from generic funds to advertising you control directly, where you can see costs and results.
- Differentiate by product: different percentages for ASINs with different margins, instead of a single rate across the whole catalogue.
- Set a cap: an overall annual ceiling on promotional contributions stops mid-year requests from piling up unchecked.
- Review every year: a fund that hasn’t produced measurable results should be reduced or restructured.
These discussions naturally belong in the annual negotiation. If you want to prepare it with profitability data by ASIN, you’ll find how we work in our AVN programme for the annual negotiation. For the accounting side of how to record these deductions, speak to your accountant.
What to do now
Gather every co-op and promotional agreement active over the last year in a single file, with dates and percentages. Recalculate at least one quarter of deductions and compare it with what Amazon withheld. Then work out the weight of co-op on your top ten ASINs. You’ll end up with two things: differences to dispute straight away and numbers to bring to your next negotiation.
Frequently asked questions
What is co-op on Amazon Vendor?
It's the money a Vendor contributes to Amazon for marketing, promotions and sales support. It can be a fixed percentage of purchases or amounts tied to individual promotions, and it's withheld directly from invoice payments.
How do you check whether Amazon has applied the right co-op?
Recalculate the deductions starting from the signed agreements: percentages, calculation basis, validity dates, ASINs and units involved. Comparing your recalculation with what was deducted in Vendor Central shows the differences to dispute.
Can co-op be renegotiated?
Yes, usually during the annual negotiation. It's worth arriving with the cost of co-op per ASIN and the results of past promotions, so you can ask for different percentages by product or funds tied to measurable objectives.