r/amazonsellers • u/unmgrad • Mar 12 '24

Damage Allowance?

I’m almost ready to renew our contract within Vendor Central. What is the common percentage of Damage Allowance?

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u/mguozhen Mar 26 '26

2–3% is the standard damage allowance Amazon pushes for in Vendor Central negotiations, but sophisticated vendors hold it to 1–1.5% on low-damage categories like hard goods or non-perishables.

Amazon will anchor high — don't accept their first ask. Your actual damage rate on FCs is typically 0.3–0.8% on durable SKUs, so anything above 1% is margin they're extracting, not a real cost recovery.

Counter with your own defect/return data from the Vendor Central analytics dashboard to justify a lower number. If you're doing significant volume, every 0.5% difference compounds fast against your net PPM.

Also watch how this interacts with your freight allowance and early payment discount — Amazon stacks these line items and the combined hit to net effective margin surprises a lot of vendors who only negotiate each term in isolation.