Amazon's 2010 trading terms
About a year ago we received an email from Amazon giving us our new trading terms and conditions. It was a blanket email to all suppliers (with the exception of the big guys I expect) and increased the % rebate Amazon was taking from us by several percent
We refused and opted not to deal with Amazon. Theres something about not even getting a personal request when decreasing your profit that sticks in the throat a bit. Some of our customers had already started to sell our knitted toys through Amazon and so as a wholesaler we had inadvertedly ended up competing with our own customers. We didn't like this very much so it was a reasonably straight forward decision
I don't think Amazon trembled at our departure and in fact we can't seem to get off their systems which is why this year I received their standard demand for another increase in margin. I have copied it below and when you read it remember this is on top of normal margin. Enjoy!
We will make the following changes to your commercial terms effective from 15th July 2010:
Marketing allowance remains at the 2009 level of 3.5% payable quarterly based on net receipts for the full trading year. This is in addition to promotional funding and bespoke rate card marketing activity.
Base volume rebate - a 3.5% retrospective rebate on the total value of net receipts for the full calendar year will apply for achieving an annual turnover at least equal to the turnover of the previous calendar year. This rebate increases to 4.5% for achieving a 2010 turnover greater than £15,000. Any such rebate will be payable quarterly in arrears on the basis of the percentage of rebate corresponding to the annual turnover forecasted by Amazon. If the annual turnover achieved at the end of the annual period differs from the forecasted annual turnover and that, as a result of this, a lower or higher percentage of rebate should have been applied, Amazon will charge or credit the vendor for the difference accordingly. Net receipts are gross receipts less the amounts for products returned to the vendor.
Returns agreement – 2.5% rebate payable quarterly in arrears based on net receipts for each quarter of the full trading year. Any recalled products or faulty batches will be excluded from the rebate and dealt with on an individual basis.
The marketing allowance, base volume rebate and returns rebate will be payable within 30 days from the end of each quarter and AEU may set off each amount against invoices.
Payment terms – We reserve the right to pay up to 90 days from the end of the month that the invoice is received but if we pay within 30 days from the end of the month that the invoice is received an early settlement discount of 2.5% will be deducted.
These commercial terms will apply until new terms are notified or agreed.
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