Concern Regarding Amazon’s New Reimbursement Policy
Dear Amazon,
I typically don’t engage in criticizing policies or voicing complaints, but this is not just feedback—it’s a critical analysis of how the recent changes to your reimbursement policy are fundamentally unfair to sellers. We have been selling on amazon for 3 years and during this time, went through many fee increases, new fee types, and have successfully been able to reduce the impact of it on our operations. The low inventory fee, although inconvenient, did make sense as having too little units can be difficult for make readily available for customers, and we built a tool to insure we have sufficient inventory.
To provide some context, we operate as an agency on Amazon, generating nearly $2 million in annual sales. We run our business out of a dedicated office and an industrial warehouse, employing up to 10 team members, both part-time and full-time. We’ve made significant financial investments to enhance the customer experience, optimize inventory management, and ensure compliance with Amazon’s evolving requirements. Despite already high fees, we reinvest our profits into developing proprietary software to maintain stock levels and mitigate costs such as low-inventory fees.
However, with this new policy shift, Amazon is no longer looking out for the customer who they deem as the end buyer (which is fine) nor their selling 'partners'. This is simply a way to pass on cost of an problem to us - the sellers. We will now only be reimbursed the manufacturing or sourcing cost—an arbitrary figure that Amazon has no accurate way of determining. Additionally, expenses such as labor, logistics, shipping, materials, and import fees are completely excluded from reimbursement - this is inconvenient - however, even if we take this on the chin - it gets worse. While we acknowledge that Amazon has the authority to revise its policies, the real issue lies in the fact that the platform itself is assigning inaccurate cost estimates to our business. When we attempt to update our actual costs, they are frequently denied outright, and we are then restricted from making further adjustments for 30 days. This will be very troublesome to keep up with, and I suspect Amazon will make it very difficult to update a cost anything other than what they have determined. Overall, this policy will cost us hundreds of thousands over the years - money we can use to hire more people, onboard more accounts, send in more inventory, innovate, etc. Being reimbursed the average selling price was much more fair, because now, not only do we lose money on the reimbursements, we lose potential sales as well.
I do acknowledge that some sellers use amazon as a 3PL, store inventory there, and use it to fulfill orders to third party sites. For this, when amazon loses inventory, the old policy was unfair, as amazon would be paying for the inventory as if it sold, even though that inventory was never meant to be sold on Amazon. I think a fair approach would be to determine how many MCF orders a seller is getting, and determine their reimbursement policy accordingly rather than penalizing Amazon FBA sellers who serve a mutual customer as Amazon.
This policy is not only unfair but feels like a deliberate move that puts sellers in an impossible position. It’s difficult to interpret this as anything other than Amazon saying, “What are you going to do about it?” We strongly urge Amazon to reconsider this change. As a leader in innovation, Amazon should be focused on addressing the root causes of lost, damaged, and unfulfillable inventory rather than shifting the burden onto sellers—many of whom are small businesses or startups working hard to grow.
We hope you will take this feedback seriously and revisit this policy to ensure a fairer approach for all sellers.
