Amazon has recently implemented a new provisional CoOp rate for businesses that sell through Vendor Central. Many people may just let this pass. Others may panic because they already have CoOp agreements. Navazon is here to help guide businesses through these technicalities of working with Amazon to maximum profitability.
- Amazon’s CoOp rates help cover a variety of costs for selling on the website
- All vendors should regularly audit their agreements to ensure they are set up correctly
- Vendors need to look out for erroneous charges in their accounts
What are Provisional CoOp Rates?
Amazon’s Provisional CoOp rates help cover marketing development funds (MDF), damage allowance, and freight allowance costs for many products sold on the marketplace. Doing this helps Amazon reduce monetary losses caused by such incidences, keeping businesses more responsible for their products. These new rates can be seen as a simple catch-all to collect money that their system should have been collecting but was falling through the cracks. Doing this could also be an incentive for businesses to create CoOp agreements for themselves.
How to avoid these CoOp Rates?
Amazon has stated that the way to avoid these possibly costly rates is to create CoOp agreements before shipping items to Amazon. As per their guidance, “To create new CoOp agreements, connect with your vendor manager as soon as possible. Once a negotiated CoOp agreement is reached between you and Amazon, and you accept it via Vendor Central, we will stop charging you any provisional CoOp rates and retroactively apply your negotiated rates during the time that the provisional CoOp rates were charged.”
What does Amazon’s New Provisional CoOp Rate mean to vendors?
If a vendor business has not set up CoOp agreements already, now is the time to get that started. Amazon may make it look easy, but it will take research and a keen negotiator to get the best agreement possible to keep costs down.
Once these agreements are set, it is still possible that businesses will be charged provisional CoOp rates by mistake. If this happens there is a process in Vendor Central to dispute such a charge and get your money back. Find it in Vendor Central -> Contact Us -> Payments & Chargebacks -> Co-Op / Vendor Returns VRET (VRET) / Freight Cost Issues.
Navazon has worked with many businesses to catch erroneous charges for incidents that these kinds of CoOp rates are meant to cover. Our experts have also helped companies at the negotiating table to get the best kind of agreement possible to ensure maximum revenue from their Amazon sales. Contact us today to discuss how we can improve your Amazon business.