Guest Post: FBA Reimbursements, the Proven Way to Increase Profits

Did you know if you're an Amazon FBA seller, then there's a good chance Amazon owes you money? Discover a proven way to transform a loss into a profit, and ensure you get the maximum amount of money you're owed. Here are five things you must know about FBA reimbursements, especially if your business has been negatively affected by the Coronavirus crisis.

1. Rules and Limitations: Do You Have Unclaimed Reimbursements?

Amazon provides an 18-month window for sellers to inspect and audit all FBA transactions in their accounts. During this period, you are allowed to open an Amazon Seller Support case and get reimbursed according to Amazon’s FBA reimbursement policy. There are many financial and logistical discrepancy types that make sellers eligible for an FBA reimbursement.

2. Statistical Scope: How Small Discrepancies Can Have a Massive Impact on Your Bottom Line

A typical Amazon seller's FBA discrepancy rate can range between 1%-3%, according to statics from data company GETIDA. This means that for every 100 products shipped to FBA, between 1 to 3 products will experience a problem. On the other hand, this suggests something truly phenomenal. It shows that Amazon does a great job handling the inventory of third-party sellers between 97%-99% of the time!

Amazon’s precision is incredible considering the gigantic scale of tens of billions of dollars worth of inventory being handled. Ask any wholesaler if such an accuracy level would be acceptable, and most will reply with an overwhelming "YES!"

However, if you are a third-party FBA Amazon seller generating $1 million annually on FBA, a 1%-3% discrepancy rate on your Amazon account translates to the considerable amount of $10K-$30K. This is a lot of money by any account, but don't expect Amazon to simply mail you a check.  It's your responsibility as a seller to do everything possible to claim your eligible FBA reimbursements.   

3. Common Problems: When Does Amazon Owe You Money?

Amazon sellers’ FBA inventory can experience several major types of logistical discrepancies.

A common discrepancy type includes inventory lost during the initial FBA shipment to Amazon’s fulfillment centers. Once in the fulfillment center, more inventory can get lost, damaged, destroyed, or disappear inside Amazon’s warehouses—or even when being transferred in-between warehouses.

Another major financial discrepancy type that can greatly help with cost reduction once fixed, is when Amazon financially overcharges a pick and pack fee during when shipping FBA orders to customers. This is usually the result of incorrect measurements of an ASIN’s weight and dimensions in Amazon's data.

IMPORTANT: After 90-days, your eligibility for getting reimbursed for incorrect measurement discrepancies expires. So, Amazon sellers must audit their FBA weight and dimension levels for accuracy at least every 90-days.

4. Shift Into Profit: Transform Losses and Strengthen Your Bottom Line

Amazon sellers must maximize the FBA reimbursements they are eligible for under Amazon’s terms and conditions. If they don’t, they will experience a double loss.

The first loss is the cost of inventory. Meaning the cost a seller paid to invest in the inventory. The second loss is the loss of profit. The reason is when an FBA reimbursement is granted, Amazon essentially "buys" the affected inventory from the seller as if the product sold on Amazon. For most sellers, the selling price of products on Amazon includes a profit.

Thus, if you get the maximum eligible FBA reimbursements, you will convert the double loss momentum into a double profit momentum. When you get reimbursed, you will enjoy the added cash received from the FBA reimbursement which will cover your cost of inventory and include a profit.

5. Take Action: Find Out What You're Owed for Free

Whether you have never audited your account, you already have an Amazon FBA auditing process put into place, or you just rely on Amazon to auto-reimburse your account, you're likely missing out on FBA reimbursements you're owed.

As a professional auditing service, GETIDA only charges a recovery fee from successful FBA reimbursements. That means if no reimbursement is generated, there is no cost for the service. Every dollar of recovery is pure added value for your business.

In fact, signing up with GETIDA is free and takes a short moment. Doing so gives instant access to a free dashboard that  provides you with an estimate of your potential FBA reimbursements. To unlock these FBA reimbursements, you can enable and upgrade your account to GETIDA’s FBA recovery service, and enjoy all the benefits of maximizing your FBA reimbursements.

Contact

We hope that this article was helpful to you in understanding more about the hidden opportunities of 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 both during times of challenge and bounty.