How to Dispute Amazon Co-Op Deductions

Despite Co-Op deductions being expected and budgeted expenses, they should be regularly reviewed for accuracy. Reasons for regularly auditing Co-Op agreements are pretty straightforward:

• Auditing creates accountability for retail partners, ensuring that they are holding true to their contractual obligations.

• Invalid Co-Op deductions directly impact the financial bottom line and can erode margin and overall channel profitability.

Common discrepancies for Co-Ops can be categorized as follows:

• Negotiated exceptions: these are the easiest types to detect and dispute. Usually based on communications between the Vendor and Amazon regarding the implementation of a waiver period. The Vendor is usually aware of the agreements that are waived for any time period, but Amazon may still charge against them since they have a more automated process.

• Agreement-based discrepancies: these are usually based on agreement details that have been implemented inaccurately. For instance, charging Co-Ops outside of an agreement effective period, charging the wrong rebate rate or amount, charging an amount or rate from a previous agreement of the same type. Or even charging against items received from the wrong vendor code.

• Backup report discrepancies: these are usually the hardest to detect since backup reports can contain thousands of rows of data. Usually, the discrepancies would come in the form of applying the wrong rebate amount/rate, basing the rebates off of the wrong quantities received or sold, or even the wrong unit costs.

Kickstarting the process of auditing or fighting Co-Ops is tricky, but we've outlined here a few important steps that can be helpful in staying on top of things. 

Resolve Co-Op Issues

To check invoice backup details and contract terms, go to Co-Op and search using the invoice ID, agreement number or date range. Select the invoice and choose Backup report from the Available downloads drop-down.

To identify who signed or accepted a Co-Op agreement, go to Manage Permissions to review who has admin access to accept agreements. The users listed as Admin have the right to accept or reject an agreement.

Suppliers' admin representatives also have access to original invoice copies without the watermark in order to initiate payments. Amazon sends original invoice copies once a month to the billing address on the agreement.

To find the terms and conditions of an Auto Price Protection agreement, go to Agreements and look under Accepted/Rejected. A price protection agreement is auto-created when there is a drop in the ASIN price.

Sometimes Amazon's internal audit team will send suppliers notification of an RSS audit. The audit claim will investigate balances that were incorrectly excluded from an accrual for any business group or vendor code.

About Amazon Vendor Central Dispute Management

If suppliers believe that they were invoiced incorrectly for a Co-Op agreement, they can dispute it via Dispute Management in Vendor Central.

They can submit disputes for Amazon to investigate via Payments > Dispute Management.

This feature enables vendors/suppliers to create new disputes, search existing disputes, view all active and closed disputes, view dispute details and correspond with Amazon analysts working on their dispute case.

Co-Op Invoices

Vendors/suppliers can view their Co-Op invoices in Vendor Central to review both the invoice total and the details and download the corresponding backup up reports.

The Co-Op page will also allow them to export invoices over a 90-day date range to a spreadsheet, as well as dispute Co-Op deductions.

Sometimes invoices and shipments do not match because Amazon bases their totals on what their records show is actually received over a calendar month. For any specific month, totals can differ due to the difference in dates between vendor/supplier shipments and dates Amazon receives.

Download Co-Op Backup Reports

Backup reports are available for most agreement types. Vendors/suppliers can download a backup report from the invoice search results, for all reports other than price protection and straight payment agreements.

1. Go to Payments > Co-Op and select the invoices.

2. Download the invoice report from the Available downloads drop-down. The backup report is generated when you click Download report.

A backup report contains the most detailed account of what suppliers have been billed for, including: ASIN, manufacturer, promotion, date, PO, product detail, and other details. When reviewing payment information, use the ASIN information provided in the reports to verify the payments, not the product IDs (UPC/EAN).

Backup reports will be available to download by the seventh day of the month.

Backup reports are not available for the following agreements:

• Lump sum agreements, such as straight payment and volume incentive agreements, where the Co-Op deduction is a fixed amount agreed between you and Amazon, rather than an automated calculation based on receipts or shipments.

• Agreements billed through the estimated reconciliation process where suppliers and Amazon reconcile the billing amount together.

• Price protection agreements where the contract text of the agreement outlines the ASINs and cost changes covered.

How to Dispute a Co-Op Agreement Invoice

If suppliers see an incorrect Co-Op deduction on their account, they should file a dispute.

A dispute can be created from the Co-Op or the Dispute management pages in Vendor Central.

To create a dispute from the Co-Op page, go to Payments > Co-Op, select the invoice, and click Dispute deductions in the Available actions drop-down menu.

To create a dispute from the Dispute management page, go to Payments > Dispute management, click Create new dispute, and select Co-Op. Enter the Co-Op invoice number that you would like to dispute, and click Next.

1. On the Create dispute: Step 1 page, select a dispute reason, enter the dispute amount, then click Continue.

2. On the Create dispute: Step 2 page, enter a dispute title (up to 200 characters long), and add a summary describing your justification for the dispute.

3. Click Browse to upload any relevant documentation to support your dispute, then click Continue.

4. On the Create dispute: Step 3 page, review your dispute and click Submit. You can also save it as a draft to complete later.

Once the dispute is submitted, the vendor/supplier is assigned a Dispute ID, which can be used for tracking.

How to Avoid Large Co-Ops & Provisions

While there are no preventative measures to guarantee avoiding Co-Op deductions, there are proven best practices that help reduce invalid Co-Op deductions and avoid entering a debit balance causing holds for provisions for receivables:

Best Practices

• Review/audit to uncover erroneous and invalid Co-Op charges

  • Follow the steps above to kickstart an audit process.

  • Use external softwares (see the SupplyPike app description below) to make the audit process timely and less painful.

• Make sure to negotiate agreements for all Co-Ops in order to avoid being at the mercy of the Amazon provisional rates algorithm.

• Negotiate during AVN (Annual Vendor Negotiations) to try and reduce Co-Op rates.

  • Increases in efficiency, reductions in costs, and increases in profitability are all levers that can help with negotiating during AVN to lower co-op accrual margins.

• Reducing unexpected (non-trade) deductions can help to prevent exposure to debit balance and provisions for receivables:

  • Shortages

  • Compliance chargebacks

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