Operator glossary
Co-op allowances (vendor)
The negotiated percentages Amazon deducts from vendor invoices — marketing accruals, damage allowance, freight allowance — agreed once in vendor terms and then subtracted forever.
Vendor agreements carry accrual lines: a marketing/co-op percentage funding Amazon's promotion of your products, a damage allowance covering unsaleable returns in bulk, a freight allowance when Amazon arranges pickup. Each is a percentage of invoiced sales, deducted automatically.
They are negotiated at onboarding and at annual vendor negotiations (AVNs) — and everything is negotiable when your line matters to the category. The classic vendor mistake is quoting wholesale prices without modeling the full accrual stack; the honest 1P P&L subtracts co-op, damage, freight, and expected chargebacks before calling anything margin.
The numbers
- Typical lines: co-op/marketing accrual, damage allowance, freight allowance — each a % of invoiced sales.
- Set in vendor terms and revisited at annual vendor negotiations (AVNs).
Related terms