Update to the FBA lost and damage inventory reimbursement policy

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News_Amazon

Update to the FBA lost and damage inventory reimbursement policy

We’re updating our Fulfilment by Amazon (FBA) inventory reimbursement policy to help provide you greater transparency and more predictability in how reimbursements are calculated for items that are lost or damaged before a customer order. This will help drive a more consistent approach that works as we support sellers with supply chain services across their sales channels.

Effective March 10, 2025, we’ll reimburse you based on the product manufacturing cost of the affected inventory. "Manufacturing cost" means your cost to source a product from a manufacturer, wholesaler, reseller, or produce the item if you are the manufacturer. It excludes costs such as shipping, handling, customs duties, or other costs.

To help provide you greater control and accuracy, you can choose how we determine the manufacturing cost for your products:

  • We’ll provide a manufacturing cost estimate for you. This estimate is based on a comprehensive evaluation of comparable products sold by Amazon, by other sellers and through wholesale channels.
  • You can provide your manufacturing costs directly. If you don’t provide your own costs, we’ll automatically apply our estimate which you can change when you’re ready.

To help you prepare, you can view and manage manufacturing costs in the Inventory Defect and Reimbursement portal starting in late January using a new Manage Your Manufacturing Cost page.

We’re constantly refining our operations and processes to prevent products from being lost or damaged and having to be reimbursed. For cases where reimbursement is necessary, we’re focused on ensuring timely compensation. We now offer automatic reimbursements for items lost in our fulfilment centres, saving you time and eliminating the need for you to submit a claim to receive reimbursement.

For items that are lost or damaged after a customer order in Amazon’s store, we’ll continue to reimburse you for the sales price on the original order minus applicable fees.

For more information on the policy change, please visit the Changes to programme policies.

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13 replies
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Seller_YxCImSFowZw4r

So this will mean less return to sellers & Amazon get to see all our cost prices ?

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Seller_EkGoiphKgUnUI

So basically, it doesent matted if it sells for 50 quid, if Amazon thinks they can get it manufactuired for 50p, thats what they will pay you, unless you scrutinise every single lost/damaged instance and set up hundreds of cases - of course providing evidence of exactly who your manufacturer is and exactly what you pay for your goods.

Im guessing they will then ask for direct contact numbers and email addresses to varify your purchases, just to make sure that you actually purchased the items. Absolutely not so that they can contact them and get your product made in 10X the quantity for half the price - and then when your competitors versions go missing, Amazon can say actually we get it manufactured for 50p now from the last guy we swindled supplier data from.

How the hell is this legal?

Everything Amazon does is to take your money, and your business from you - all while apparently welcoming you into their warm embrace...

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Seller_AddbznjmTOmgp

Another way to {inappropriate content removed} new/smaller sellers on the platform. Give them less than 50% of their COG because they can't buy direct from manufacture. Amazon have lost 900 of my units so far this year, all reimbursements were less than COG. I feel like they're pretty much actioning this policy already! Now it's going to be even more harsh than it is now.

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Seller_dj4jEL8ZyQJ2M

This is absolutely disgusting, why are we all still using this horrific place. It needs boycotting until there’s a big sting felt in it their pockets. But it won’t. Because when one of us goes another mug comes on until they realise.

So essentially, this new policy means I can send a shipment in. Have all the labelling time, shipping costs, admin time, delivery processing delay and so on for that shipment.

You tie up thousands of our pounds whilst we forecast and anticipate sales on them items often for a couple of months worth of stock that should be in and processed pretty fast to get live and ready for sale (the whole point of FBA, fast and Prime)

Yet you mishandle it, which has happened MANY times, (messing up scanning in, losing it, damaging it, always YOUR ERROR)- yet now we have to wait for a over a month for your ‘shipping closed’ badge and it to become eligible to investigate, only for you to conclude, yes it is actually our fault and has been damaged or lost by US again!

But now - you’re not reimbursing me for the sales I could have made, or the time you’ve wasted tying up our money, or all additional costs of that shipment, nooooo that’s far to fair, you just want to reimburse the original source cost. 45 or whatever days back. Whilst excluding any accountability or compensation for the fact we’ve trusted you for 45 days to handle our stock, process it and fulfil it. Oh which we also pay you substantial fees for!

Yet during this time, an equivalent seller has warehouse facilities and can list and dispatch the minute they get it in their warehouse, at a reduced cost via a third party courier. With NO RISK, of it being mishandled, damaged or lost, no requirement to sit for hours labelling, no shipping box or equipment cost, no shipping time and FBA warehouse processing delays. No lengthy investigation time- So what’s the incentive in FBA??

Oh WAIT, likelyhood is big bully Amazon, they won’t allow this warehouse, to get as many sales, why? because you STILL only prioritise buy box for FBA, despite a court hearing that you lost where you stated you’d be changing the buybox to not favour FBA and include FBM. Utter nonsense and lies.

So tell me what is the point of FBA, where’s the safety? Or incentive or protection anymore. The fees are high, the reliability isn’t truthfully horrific, but it’s far from perfect and losses and damage DO happen regularly.

I’ve also had MANY occasions where you’ve deemed a shipment ‘investigated and confirmed contents are complete and not located’- as a final decision- yet we know for a fact we sent the items, so it doesn’t allow you dispute it the natural way within the shipment- we then have to open a separate case and provide invoice information to PROVE that box was sent and delivered, and it’s your mess up as usual. Oh here we go- More confidential invoice information, more supplier info, more info for your snakey data bank.

This place is a disaster, FBA had the power to build business at one point whilst making great money for themselves, now I’ve not seen a single update that works favourably for sellers in the last 3 years. It makes you wanna move as far away as possible. They make millions on seller fees and what exactly do they reinvest back in our favour. This one goes too far and needs reporting and someone actually seeing it through

As usual… a complete bully abuse of power crippling sellers even further!

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Seller_Nprc5XWvdLYk9

"For items that are lost or damaged after a customer order in Amazon’s store, we’ll continue to reimburse you for the sales price on the original order minus applicable fees and VAT."

there is a failure in the current reimbursement formula,

from August 1st 2024 Amazon charged VAT on seller fees (fba and commission fees)

the amazon policy is to deduct all the fees from the selling price to calculate what the seller would have earned had the item not been lost/damaged/lost in transit with partner program. - so that a seller does not end up in a worse financial position than if the "incident" had not occurred.

but Amazon are deducting the fees with vat from the final reimbursement value

this is incorrect - it should be fess nett of vat to be deducted.

I have a case open with seller support now escalated to leadership team - who continue to insist the reimbursement is correct when it is quite clearly not.

can someone please take a look at this

@Julia_Amazon @Ezra_Amazon

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Seller_8OyGUqwKdXfCN

Bad news Amazon - this is another hassle for us.

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Seller_7pTs15IYXmTOB

Amazon policies do not protect sellers or their business interests anymore. So if there is a fire at the Amazon warehouse (has happened once) we will get the purchase price (minus all costs that we had to bear during purchase along with the costs to label and ship it to Amazon).

Even returns of units that have expiry dates are not being returned to sellers, even if the expiry date is a way long way off and not even expired, units are disposed off. Which means, we don't even know what the buyer is returning.

The reason is that they won't let us create removal orders, due to safety reasons. I however find it odd and illogical that they felt it was safe to have it returned to the warehouse. They felt it was safe for the buyer to return it but not safe for them to return to us!

FBA sellers, specially small sellers, will soon wave goodbye to FBA selling.

Amazon's current business advisers are regressive in their thinking and frankly, appears to be below average.

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Seller_pfioHoFldeAtG
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Seller_TVhMAPiT9iryJ
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