Amazon FBA Reimbursements: Top-5 Things to Know

Yoni Mazor on Sep 30, 2020

Here are 5 things to know about FBA reimbursements that can be useful in turning a loss into a profit. Especially for Amazon sellers that are in need to access more cash. Maximizing FBA reimbursements is a powerful way that assists many FBA sellers in growing their revenue.

 

The scope can be significant

Amazon automatically reimburses FBA sellers for FBA discrepancies they find in their system. However, Amazon is expecting the sellers to conduct their own FBA Audit for things that Amazon might have overlooked.

There are two main discrepancy types that can occur.

The first type is logistical, i.e. something relating to an actual inventory unit. All FBA reimbursements connected to lost, damaged, and destroyed inventory fall under this category.

The second type is transactional, i.e. related to FBA fee discrepancies. These FBA financial discrepancies are usually a result of financial overcharges.

The data of GETIDA, an e-commerce technology company, suggests that the rate of potential FBA discrepancy can range from 1% to 3% of your FBA revenue. For you the seller, this means that for every 100 units shipped to an FBA Fulfilment Center, between 1 to 3 units will be affected.

That’s not much, or is it?

If you are a 7- or 8-figure seller generating $1 million a year in FBA sales, a 1% to 3% discrepancy rate can range anywhere between $10,000 to $30,000, which is a significant amount.

It is your responsibility as a seller to maximize the recovery of all your eligible FBA related discrepancies. An FBA reimbursement recovery is a great opportunity to improve your cash flow.

 

The window of opportunity

Amazon provides an 18-month window period for the sellers to conduct an FBA audit of all their FBA-related transactions. Once an issue is found, a seller can open cases for any eligible discrepancies, under Amazon’s FBA reimbursement policy.

However, this time window is not applicable to every type of issue, some of which require you to act much faster. All of these hidden recovery opportunities are available and are recommended to be recovered in the available time frames.

 

Some common discrepancies and reasons

Amazon is a logistical giant when it comes to e-commerce logistics. Imagine all the logistical and fulfillment errors that can take place in huge warehouses that can house some small nations.

The sheer volume of transactions that take place at an FBA Fulfilment center, might lead to a few things that can go wrong along the way.

A common logistical discrepancy includes inventory that gets lost during the initial FBA inbound receiving process. For example, a seller ships 1,000 units to an Amazon fulfillment center, and only 990 units have been received in the FBA center. The seller is required to open a case for such a discrepancy and report it to Amazon.

Once in the FBA centers, your FBA inventory can also get lost, damaged and destroyed or simply disappear.

Another seemingly non-consequential error is FBA pick and pack overcharged fees, which carries a lot of FBA reimbursement potential for you, if you were indeed overcharged with FBA pick and pack fees.

The simplest reason for this is that there may be some errors in Amazon’s data. After all, when it comes to billions of units, some errors such as wrong weight and dimensions are bound to happen.

Amazon provides a time frame of only 90-days for reimbursing for pick and pack overcharge claims. Therefore, Amazon sellers are strongly recommended to audit Amazon FBA transactions at least every 90 days.

 

Turn the weakness into strength

If you do not maximize the FBA reimbursements that you are eligible for, you experience a double loss. Here’s how.

The first loss is the cost of inventory. Meaning the cost, you as a seller pay to source an item for selling it on Amazon. The second loss is the loss of profit.

When you as a seller, get reimbursed, Amazon is “purchasing” the affected inventory from you as if the product was sold on Amazon’s platform. For most Amazon sellers, selling products on Amazon includes a healthy profit. Thus, by failing to maximize your eligible FBA reimbursement, you are losing out on the profit. This profit can be a life-saver and can help accelerate your Amazon business.

Amazon’s FBA Reimbursements will recover the cost of your inventory and your profit. Thus, effectively turning a weakness into a strength.

 

Let the whales swim for you

There are many challenges selling on Amazon. Surviving in the hyper-competitive Amazon marketplace is an achievement in itself. If you are an active Amazon seller making a profit, congratulate yourself!

But in order to grow your success, you need every help you can get. If you are an Amazon seller and are not making enough profit, you definitely need to take action.

Maximizing FBA reimbursements is an effective way that will assist you in growing your revenue and minimizing costs, and you will be rewarded with more cash.

To make sure you are maximizing your available FBA Reimbursements, you can reach out to an Amazon FBA auditing service such as GETIDA.

GETIDA does not charge anything upfront. They charge a recovery fee, only for successful FBA Reimbursement that sellers receive. If no reimbursement is secured, there will be no charge. Every recovered dollar can be of great help to your business.

Signing up takes about 4 minutes, and you get instant access to a free dashboard that will provide you with intelligent data analytics that can benefit your business.

We hope that this article was helpful to you and that you are now able to understand the importance of maximizing FBA reimbursements. If you have any questions about this topic, feel free to contact us at support@getida.com.

We are here to help, especially in times of challenge and hardships.

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