Over 2 million sellers are using the Amazon FBA program to store, package, and ship their products. With Amazon's cutting edge fulfillment networks, enrolling in the FBA program can take your e-commerce sales to a whole new level.
First-time FBA users often find the program's pricing and regulations to be on the confusing side. In the process of adjusting to outsourcing your order fulfillment needs, you may miss Amazon's reimbursement policies.
Why is Amazon issuing reimbursements to their FBA clients? When does this occur, and how can you make sure that you're getting the reimbursements you deserve?
We'll answer all of your questions about Amazon FBA reimbursements here. Keep reading for our easy-to-follow FBA reimbursement guide.
First, let's talk about incidences that lead to Amazon FBA reimbursements. Because FBA participants are paying Amazon for their order fulfillment services, Amazon is expected to take good care of their inventory. While Amazon is particularly adept at handling mass quantities of inventory from hundreds of thousands of sellers at a time, they are bound to make mistakes from time to time.
When you send stock to Amazon, they place that stock under their own protection insurance. That means that even if something goes wrong with your inbound shipments while they're still under the care of FedEx or USPS, Amazon is accountable.
Issues with inbound shipments include missing units, units that are either damaged or lost by the carrier, or deducted stock. The latter often causes the most confusion, as it occurs when Amazon processes the correct number of items upon receiving the shipment but later changes the numbers to show less stock.
Once your items are received and processed by Amazon, they are stored in a warehouse until a buyer makes a purchase. There are times when products that are still in the warehouse become lost, damaged, or destroyed. It may get misplaced during sorted or damaged by warehouse equipment.
In the event that your stock gets damaged, you may find out via Seller Central. However, this requires a warehouse employee to notice the damage. There are unfortunate cases in which you don't discover the error until a customer receives a damaged product--in which case both you and the customer should be reimbursed for the unit.
Customer returns tend to cause the most problems from Amazon FBA participants. These issues include:
Returns are inevitable and, for major sellers, seem to crop up several times a week. Because there is so much room for error, it is of the utmost importance that you track the status of all returns and ensure that you are getting the reimbursement you are owed.
Becoming an FBA participant tends to come with hefty fees. These fees include things like commission fees, which Amazon charges for every online purchase completed with the help of their fulfillment center, and storage fees. There is also a separate rate for longterm storage fees and, of course, a fee for shipping.
These fees vary based on the category you sell in, the weight and size of each unit, and the length of time they've been in an Amazon warehouse. If Amazon accidentally misrepresents any of your stock--for example, recording a product as being twice as heavy as it is--they will overcharge you for your FBA fees. Depending on how many of your products this misrepresentation effects or how long it goes on, they could end up owing you a sizable reimbursement.
Every once in a blue moon, Amazon makes a mistake like shipping a customer four items instead of the three that they paid for. You can't expect customers to send back extra items but you can make sure that Amazon reimburses you for what is effectively lost stock.
A lot of times, order quantity errors won't be recorded by Amazon, which means that you need to keep a scrutinizing eye on your inventory.
How often do these issues really happen? Scrolling through the FBA message boards, you may be surprised to discover that these issues happen quite a bit. In rare cases, Amazon ends up costing FBA participants thousands of dollars.
It's fair to say that Amazon does it's best to keep track of their own mistakes and reimburse FBA participants accordingly. However, you can imagine that a lot of these errors go under the radar on their end. That means that you're going to have to pay close attention to your inventory, your customer returns, and your FBA fees.
How can you stay on top of these details when you have a whole business to run? That's where we come in. Our services allow you to focus on the bigger picture while we keep track of your account and inventory and ensure that you get every reimbursement you deserve.
The Amazon FBA program has made e-commerce and expansion a tangible reality for millions of business owners. With Amazon's state of the art fulfillment centers located nationwide, you can reach customers you'd never imagined were reachable. However, Amazon isn't perfect, and without staying on top of the nitty-gritty, you can miss out on Amazon FBA reimbursements you deserve.
We're here to protect your business from unnecessary losses. Contact us to find out more about our services and pricing and set up your account today.