Update to the FBA inventory reimbursement policy

Amazon is screwing you some more with FBA this January. This is a blatant push to support their vendor program or to get critical supply chain or COGS information from you.

Plan your exit strategy if your margins on Amazon do not outweigh your privacy concerns for your COGS or supply chain.

" Hello,

We’re updating our Fulfillment 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. 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.
…"

We will be using a sister company or DBA to invoice ourselves to protect our supply chain information.

You can read the details logged in HERE.

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Agreed. This unwelcome change has also been posted as a News Headline today, which I linked earlier in this SAS Post:

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We got the notice via email … never done FBA … but we got the notice anyhow.

:yawning_face:

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Yes we ran into this coming home early since sales evaporated today. Typical “Cliff Day” nothing will arrive by Christmas.

Here is the main issue, hidden in the stupid nesting on the NSFE from @ Jim_Amazon

Manufacturing cost is the cost to acquire, purchase, or produce the item. It excludes costs such as shipping, handling, customs duties, or other costs.

Here is the problem with that, it ignores “burdened costs” to understand you need to understand CoGS (Cost of Goods Sold) plus all other expenses. Like "shipping, handling, customs (where applicable) and other costs.

PLUS rent, taxes, local, state, federal, county etc… And lights, power, heat, cooling, condo or unit fees, storage fees, transportation fees, shipping both inbound and outbound. Plus salaries, personnel taxes, unemployment, Social Security and Medicare tax all spit and paid by both the employee and employer.

Then you have holiday pay, vacation pay, PTO (Payed Time Off), disability insurance, family leave pay, medical, dental, eye, drug, etc., etc…

I was going to post this on the NSFE however, I knew it would be a waste of time.

If you do not run a company you have no clue about all this, and the stuff I could not remember when venting about this stupid Amazon idea. thanks @VTR for bringing it up where sellers understand (Ask) sellers.

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I’m wondering what took them so long to go in this direction.

You’ll get just your cost back. Forget about what you might have made if they didn’t lose it or damage it. Forget about what it cost you to get it to FBA or the placement fees you may have paid. Forget about the labor it took to prep what they lost or damaged.

You don’t need to provide your actual cost if you go with their estimate. The volume on our reimbursements isn’t something that concerns me but if they lost a pallet, that would be a different story.

I knew when I saw the email that this would stir up some anger, and rightfully so.

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I would not be surprised if this expands to reimbursements for Buy Shipping reimbursements in the future.

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I wonder how hard it is to start a company in the Caymans to skip invoices through with an inflated COGS, that won’t affect customs clearance?

200

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$0 is predictable. Not helpful, but very predictable.

This totally baffles me. It also screams “LIES!” at me when I read it.

First, “comprehensive” my butt.
Second, this is just more Amazon automation. More poorly coded, untested, badly trained AI driven automation. Because it worked so well before.

Ah, but you will reject our invoices, deny our claims, and then reimburse us nothing. So yeah, that’s a thing that we can see coming a mile away. Because, again, we have been here before.

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When you quote it from my post like that it makes me look like an A hole. :rofl:

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“Ooops”
:wink:

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This will be very damaging for low margin items as it will assume a percentage of your category cost which will always be a lower cost.


For those of you reading, now is the time to get your manufacturer/supply chain to raise your invoice price and then do volume/ advertising/ best friend on Earth/ mom’s bridge partner discounts on the back end. Treat Amazon like a car dealer and show them your “invoice” price ignoring the 30% discounts behind the line as they say.

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Something tells me that Amazon has thought of this and has a threshold of tolerance over their BS estimate.

It’s also sort of fraud but an eye for an eye, ((Ay Mr. Walker (Fear - Movie))

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Am I the only one seeing Amazon treating sellers like United Heath Care treats patients… Deny, Delay, Depose…

One day they will deny reimbursement to someone like Marvin Heemeyer, and Andy Jassy will wake up early to a text of a D9 dozer driving through of the fulfillment centers. Or to someone like Andrew Joseph Stack III and the next day a crane is pulling a Piper Archer out of an Amazon office complex.

$3400 reimbursement vs. half of a fulfillment center destroyed, may make shareholders or the board of directors think about things.

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Amazon is the very definition of fraud in every way. I tell you all only half the BS we deal with.

I’m very surprised that there hasn’t been an event like you described yet. Amazon has ruined, I would venture to say, hundreds of thousands of lives. I’m sure hundreds if not thousands of people have ended their own lives because of Amazon.

It’s a terrible place to do business but the alure of the potential just keeps it going and sellers coming to bat, even with all the info that’s avail out there about what a terrible place to do business that it is.

The fact is, Amazon has made a lot of people very rich. Sadly, almost all of them are dealing in fraud themselves, even some of the biggest and seemingly legit sellers.

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Yup, it used to be about how you made your money back in the day. Now its almost all pure greed.

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Shush!

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Let us not forget consultants… Cough Cough Ed.

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This assumes Amazon’s method of estimating an item’s manufacturing cost is to just assign a percentage of the sale cost, and that it will be consistent for all price brackets.
However, Amazon promised “a comprehensive evaluation of comparable products sold by Amazon, by other sellers, and through wholesale channels” and this approach is not “comprehensive.” :roll_eyes:

Amazon is making it sound like the estimates will be generated by something more akin to the high/low price bot, a completely opaque, borderline arbitrary bot that cannot be overridden and is accountable to no human. I find this more likely and scarier.

People think when the robots take control it will be like Skynet where they all rise up at once and overthrow us. I think it will be more like this, where they take control over our lives one little bit at a time until we look around and wonder when was the last time we decided a single thing. And it all started with telling me I can’t raise my price.

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Like from Temu (low ball) and Alibaba (high ball)? … or from Amazon Haul … or maybe not at all? … (it rhymed so we went with it)

Amazon: “You owe us money for your product we lost as we calculate that it didn’t cost as much as the storage fees we charged you while we had temporary knowledge of where your product was.”

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And I thought it was bad when they decided to reimburse you minus the amazon commission.

seriously lets look at this

Sale price $100
Amazon commission $15
FBA fees $10
Cost to ship $10
COGS: $25
Cost of shipping per item $2

Profit $38

If lost
reimbursement $25
-$2
-$10

$13 net reimbursement.

How amazon saves money on their incompetience.

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