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Aug 31, 2024 12:00AM

Cost Support Agreements with Amazon are not recommended. They often set high margin targets, may charge for uncontrollable markdowns, and can discount products at will. Vendors should decline CSAs due to Amazon's inability to guarantee against markdowns and pricing errors.

Martin Heubel | Link to post

Should you agree to Cost Support Agreements (CSA) with #Amazon?

❌ No, you shouldn't.

Here are 3 reasons why:

1- Amazon often sets a margin target above your category average.

2- You may end up paying for overstock markdowns and pricing errors that are out of your control.

3- Nothing stops Amazon from discounting your products to drive demand (to reach a higher tier in your Volume Incentive Agreement, for example).


If your Vendor Manager pushes for a CSA, simply point to the fact that Amazon cannot guarantee the absence of markdowns and pricing errors.

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How are you handling CSA requests from your Vendor Manager?

Let me know in the comments!

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