MMA

A Minimum Margin Agreement (MMA) is a financial safeguard Amazon uses in vendor negotiations (typically during AVN – Annual Vendor Negotiations) to ensure that it earns at least a specified minimum margin percentage on the products it purchases and resells.

Under MMA terms:

• Amazon calculates its actual realized margin after deducting costs, fees, and returns
• If the margin falls below the agreed minimum, Amazon may issue back-end charges or margin recovery invoices to the vendor
• MMA is often used for price-sensitive categories or low-margin items
• Works similarly to GMM (Guaranteed Minimum Margin), but MMA can apply at the portfolio level, not just product-by-product

Why MMA matters:

• It helps Amazon protect its retail profitability
• Vendors must proactively manage cost structures and retail prices
• Violations or adjustments tied to MMA may appear in chargeback reports
• Can influence decisions around product assortment, pricing, and promotional funding

💡 Example: A vendor agrees to an MMA of 22%. If Amazon realizes only an 18% margin on that vendor’s assortment during a quarter, it may invoice the vendor to recover the 4% difference.

In short:
MMA (Minimum Margin Agreement) is Amazon’s agreement with vendors to guarantee a minimum profit margin - with financial recovery mechanisms in place if that threshold isn’t met.