Due to FBA errors 80% of all Amazon FBA sellers lose money every day: How you get your money back!
For many sellers, Fulfillment by Amazon (FBA) is the best solution when it comes to storage and shipping of their own goods. With the online giant's program, they can focus on expanding their own business. However, many users of the service are unaware of the irregularities in the Amazon warehouses.
These deficiencies in the system of FBA can cause sellers to lose money every day. In the following article, we will explain which FBA errors can take place and how you as a seller can get your money back.
What is FBA?
The abbreviation FBA stands for "Fulfilment by Amazon" and usually means shipping through Amazon. However, Amazon's fulfillment extends far beyond shipping. In addition, products shipped via FBA are preferred by Amazon when awarding the Buy Box. One can roughly divide the services provided by FBA into three areas: Storage, shipping, and customer service. In all these areas, Amazon can make mistakes.
This includes the storage of the merchandise in Amazon's own warehouses until dispatch. But the service includes much more. If you wish, you can outsource the entire goods management to Amazon. This also includes the compilation of packaging units, labeling, warehousing, or even stocktaking.
Once an item is sold on the platform, the order is prepared for dispatch. This includes picking the goods, i.e. putting the articles together, packing, address labeling, and handing them over to the dispatch service provider. But Amazon's service does not end there. Since Amazon is the client of the shipping service provider, the online giant's responsibility towards the seller also extends to this area.
In the event of returns, Amazon also takes care of their processing. This includes the provision of return labels and the acceptance and posting of the returned goods.
Whether it is a question of customer queries or the registration of returns, FBA's complete customer service is also the responsibility of Amazon. This has great advantages because the seller can concentrate on selling.
FBA processes are highly complex
The rough description of Amazon's service already shows the complexity of the processes in the warehouse and thus their susceptibility to FBA errors. If we break down this process, this is how it works:
The scope of the processes would already be very complicated in our own warehouse. These challenges are compounded by the incredible amount of items that Amazon manages in its FBA warehouses on a daily basis.
Furthermore, the FBA program has no charitable character. This is about money. For the warehouse staff, this means everything has to be done quickly and efficiently. This is the only way Amazon can offer the service profitably.
Now, keeping in mind the complexity of the processes, the sheer number of articles and the enormous time pressure, it is no longer surprising that the staff in the warehouses make mistakes. Mistakes are human. We all make mistakes. Nobody blames Amazon for making mistakes. The only problem is when these FBA errors cause the seller to lose money. Even more problematic, when they don’t even notice these errors have occurred.
Despite all the criticism of Fulfillment by Amazon, for many sellers it is still the best and safest way to offer fast shipping and excellent customer service.
What FBA errors can happen to Amazon?
There are certainly many errors that can happen in Amazon's warehouses. But not every mistake is serious. At this point, we would like to concentrate on those relevant for the online retailer.
Roughly speaking, the most important errors in the Amazon FBA process have three different origins:
- 1The item becomes unsellable due to stock movements
- 2Errors with returns
- 3FBA fee calculation error
Origin No. 1 and No. 2 result in the loss of goods and therefore value under the supervision of Amazon. Origin No. 3 results in an incorrect amount appearing on the invoice. Let us take a closer look at these FBA errors.
#1: Item becomes unsellable due to stock movements
Whether it is due to movement internally in the warehouse or by the buyer – quite often items get damaged. If this is the case, the product can no longer be sold and Amazon disposes of the item. It is debited from the stock.
With all the complexity and hustle and bustle in the dispatch centre, it can happen that products are incorrectly disposed of. Here too, the item is debited from the inventory.
In addition, items can also simply get "lost". We do not wish to imply any bad intentions at this point. But of course, this is annoying for the seller. In any case, an inventory will show that there is a shortage. This will also be debited.
#2: FBA errors with returns
Amazon's goodwill towards its customers is well known. After all, Jeff Bezos has built his company strictly according to the motto "Start with the customer and work backward". In the meantime, even customers know that the fairness of the marketplace knows no bounds. Some even take advantage of it.
It remains to be seen whether Amazon customers do the following on purpose or whether human error is the reason. However, it does happen that buyers process a return and the money is refunded before the product has even been returned. Amazon waits 45 days for the return. And after that ... nothing happens.
With these two scenarios, Amazon would normally have to reimburse the replacement value automatically to the seller. However, this only happens in very rare cases. After an FBA error, the seller is left with the loss of the goods instead of being reimbursed for the replacement value.
#3: FBA fee calculation error
Both the storage fees and the shipping fees for the FBA service are calculated based on the dimensions and weight of the stored items. If Amazon now uses incorrect dimensions as a basis for calculation, excessive FBA fees will be charged.
If all these FBA errors are added together, sellers can lose several thousand euros a year, depending on the number of items.
What can I do as a seller to get my money back?
The legal situation is clear in all these cases. The merchandise was handed over to the responsibility of Amazon. Any loss of value that occurs afterward must be settled by Amazon. This is also the view of Amazon. However, reimbursements are not automatically made. Instead, it is the seller's responsibility to provide evidence of these losses in value and to claim the reimbursement from Amazon.
Proving this is actually not the problem either, as Amazon has stored the bookings in the various reports in Seller Central. However, the effort for the seller to compile them is very high.
Twelve and more different reports have to be linked and analysed for conspicuous transactions. If one then takes into account the different time zones of the reports, possible waiting times until the FBA error is allocated, and the respective marketplace, the undertaking becomes more than confusing. Not to mention the limitations that must be taken into consideration.
All this should then of course be done at regular intervals. But certainly, nobody will do that every day as it is very time consuming. Therefore, many sellers lose a lot of money because they let their reimbursement claims expire.
Simply use SellerLogic Lost & Found
The time taken to compile reports and open cases can quickly become non profitable for the seller. This is why we at SellerLogic have developed an automated solution that does the main work for you: the "Lost & Found" tool.
SellerLogic Lost & Found analyses the data from up to twelve reports and identifies the FBA errors mentioned above. Each conspicuous transaction is created as a separate process. This can be done up to 18 months retroactively. The individual cases are prepared in an easily understandable way and stored as a copyable template. All you have to do is open the case in Seller Central, insert the text prepared by SellerLogic, and send it off.
Thanks to our tool, none of your reimbursement claims will be lost - with minimal effort. And if there are ever any issues with one of your cases, our experienced staff will help you to communicate with Amazon!
Get your money back!
SellerLogic Lost & Found detects every FBA error.
Conclusion: Get your money back!
FBA errors can occur repeatedly in the different fulfillment processes. Given the complexity these processes have assumed, this is hardly surprising. But for many of these FBA errors, the seller is entitled to these reimbursements. However, it is almost impossible for the seller to analyse all FBA reports at a regular basis.
So instead of spending hours poring over sheets full of data, sellers can use SellerLogic Lost & Found. The tool finds every FBA error automatically and it also directly provides the corresponding text template that helps them report and justify the cases to Amazon. This workload is reduced to a task that only takes a few minutes. Moreover, if there are any problems with any of the cases, SellerLogic’s Customer Service supports the sellers during the communication with Amazon’s team without any extra charges.