MCP

Matching Compensation (MCP) is a vendor funding mechanism used by Amazon when the retail margin on a product is too low to meet profitability targets. Instead of delisting the product (as would happen with CRaP items - "Cannot Realize any Profit"), Amazon may request an investment or discount from the vendor to “match” the margin gap.

How MCP works:

• Amazon analyzes the cost vs. selling price
• If margins fall below acceptable levels, Amazon may ask for MCP funding
• This funding can be structured as a back-end rebate, cost discount, or marketing investment
• Helps retain product availability while keeping Amazon's retail margin positive

Why it matters:

• Prevents products from being delisted due to low profitability
• Supports selection retention for high-traffic or brand-critical items
• Often discussed during AVN (Annual Vendor Negotiations) or item-level profitability reviews
• May impact vendor scorecards and future PO volume

💡 Example: A vendor’s shampoo sells well but has a razor-thin margin. Amazon requests a 5% MCP rebate to keep the item in the catalog without losing money.

In short:
MCP (Matching Compensation) is a vendor funding solution Amazon uses to support low-margin products - helping maintain catalog availability while covering profit gaps.