Do any CoOp/MDF funds Cover Sponsored Ads?

No. Co-Op is better thought of as transactional fee. Amazon does purchase minimal display ads around the internet which might include your ASINs, but there are no gaurantees around spending, no reports around spending, you will never see any literal return on that spend.

What are CO-OP Allowances?

Accrual Based Allowances:

• Freight Allowance %
• Damage Allowance %
• Co-Op Activities %

These are all unique to the vendor, negotiate annually, and highly depend on the product/category which you’re selling.

For example:

• heavier products have larger Freight allowance (because its more expensive to ship)
• Lots of variables can increase a product return rate, like technical features or decorative/design features. These all increase returns / buyer’s remorse. Every return impacts your Damage allowance because Amazon has to free-replace/return and handle customer service.
• Vendors commonly have a 9-12% CO-OP agreement, which is deducted from every payment to essentially cover transactional fees and light advertising.