Customers have a tendency to trust Amazon more than other e-commerce platforms. In fact, 89% of shoppers say that they're more likely to buy a product from Amazon than elsewhere because Amazon is reliable. However, Amazon FBA sellers learn quickly that while Amazon is largely reliable, they don't always keep inventory safe. Of course, most people don't have as much trouble as the Amazon newbies who lose thousands, but mistakes do happen on Amazon's end. Performing an FBA audit is an important way to stay on top of your inventory and recoup any losses Amazon didn't catch.
Why is this important and how does it work? Read on to learn everything you need to know about auditing and the Amazon FBA reimbursement program.
When you commit to Amazon's fulfillment services, you allow Amazon to assume some of the risks of product fulfillment on your behalf. We'll talk about these risks in greater detail later in this article but at the end of the day, all of those risks can lead to loss. When Amazon is responsible for the loss of inventory or the failure to complete a sale, they are also supposed to assume responsibility.
As long as inventory loss is caught in time, Amazon will cover the costs associated with that loss. In other words, they'll make sure that both you and any affected customers are reimbursed. This is the Amazon FBA reimbursement program.
However, Amazon doesn't always catch these losses on its own. Given that they warehouse and ship billions of products, it's not surprising that they aren't always reliable when it comes to tracking individual discrepancies with your inventory.
That's where the FBA audit comes in. Periodically, FBA sellers should conduct an audit of their inventory to catch any losses and request proper reimbursement.
Don't have time to keep track of all of these minuscule details on your own? That's where our services come in. We're here to perform FBA audits for you so that you can focus on running your business.
Now that you know what an FBA audit is, it's time to talk about the importance of conducting them regularly. A few losses here and there may not seem like a big blow to your business. However, when those losses go unchecked for years, they can represent massive profit losses that can damage your business.
One reason why you don't want to conduct FBA audits once but instead, on a regular basis is that Amazon puts an expiration date on their reimbursements. After 18 months pass and a loss or discrepancy go unnoticed, reimbursements are generally no longer available. That said, depending on the area of issue, many times Amazon declines reimbursements beyond 9 months. And sometimes in as little as 90 days.
That's why we recommend doing FBA audits at least once a quarter. That way, you are guaranteed to recover any damages you are owed.
Realistically, it can be more beneficial to run FBA audits on a monthly basis or even with greater frequency. The faster you catch a discrepancy, the more quickly you'll get that money back for your business.
The kinds of discrepancies Amazon will reimburse you for relate simply to inventory loss. In other words, Amazon will reimburse FBA sellers if and when some of that seller's inventory is no longer available for sale.
In this situation, you're already looking at an irrevocable loss: the loss of inventory. However, if you don't get that reimbursement, you've also now lost the profit you should have received from selling that inventory. If you're a company bringing in $1 million in revenue, even a 1-3% inventory loss can create a $10k-$30k loss of profits.
Another reason that FBA audits are vital is that there are tons of discrepancy types that can lead to the loss of inventory. Because the risks are so numerous and varied, Amazon is all the more unlikely to notice every single one. When you work with us, we can track your inventory with all of these losses in mind and furthermore, find out exactly what happened to lost inventory.
Common causes of lost or unsaleable inventory include:
In some cases, FBA reimbursements are given not because Amazon has lost or damaged inventory, but because they have charged an FBA seller too much. As you know, FBA sellers are charged a pick and pack fee for all of their shipments. If Amazon overcharges for that service once, they are likely to do it again unless you alert them to this issue.
How do these overcharges occur? Typically, Amazon overcharges sellers if they miscalculate the weight or dimensions of your products. When it comes to reimbursements for this particular discrepancy, here is one of the areas you only have 90 days to catch the issue--so as you can see, regular auditing is most important.
If you are an Amazon FBA seller, you may have become familiar with the Amazon FBA reimbursement program. However, you may still be relying on Amazon to catch every discrepancy--which can result in thousands of dollars of losses. We offer the best Amazon FBA auditing program for Amazon FBA sellers, making it easier for you to focus on the day-to-day.
To take advantage of our services, log in to your account or create a new account. Remember, we only charge when we find discrepancies and help you recover your profit losses. In the end, our objective is to protect your business's finances.