How the Upcoming Reimbursement Policy Changes will impact Sellers

“If you don’t understand the details of your business you are going to fail.”

— Jeff Bezos, Amazon Founder

If your Amazon business is loss-making it’s hardly ever due to incorrectly priced products. The biggest impact is usually due to lost, damaged or restricted inventory. Unlike the sales figures flashing in your face daily, it’s quite difficult to track just how much of an impact these losses are having on your bottom line. Which is why many business owners struggle with this.

Cue Amazon’s latest policy updates on reimbursements claims starting October.  They'll introduce new complexities that could erode your bottom line if not managed correctly. Put simply if you do not understand the details of your inventory losses and make claims for reimbursements on time, your business could fail.

Here’s what you need to know to get organised before the deadline:

•  Automated reimbursements offer efficiency but come with hidden costs.

→ Amazon’s Pitch: Automation will handle your lost inventory claims seamlessly, eliminating the need for manual processing.

→ The Downside: Relying exclusively on automation could result in missed reimbursements, esp in complex cases involving returns or damages.

• Stricter claim deadlines will impact the disorganised

→ New Rule: Claims for lost or damaged inventory must be filed within 60 days, and customer returns within 60-120 days.

→ The Risk: These tighter windows will impact those who dont have regular processes in place. Missing a deadline could lead to significant losses, directly affecting your profit margins.

• Lower reimbursement values will impact bottom lines.

→ What’s changed: Amazon now reimburses unsellable items based on their discounted sale value, not the original price like they used to do.

→ The impact: This change can drastically reduce the amount you receive for damaged goods. Sellers need to understand how to challenge these valuations effectively to avoid being underpaid.

Forewarned is forearmed. Now is a great time to put in place systems to keep track of your FBA inventory.  You can use software or a spreadsheet to track this information. Maintain numbers of the units sold and any customer returns. Deduct the units sold from your inventory count, and adjust and claim for any returned or damaged items as soon as you can. 

All the best!