FBA Errors Are the Reason Why 80% of All Sellers Lose Money Every Day – This Is How You Get Your Money Back!
For many sellers, Fulfilment by Amazon (FBA) is the best solution when it comes to the storage and shipping of goods. By using the online giant’s logistic program, you as a seller do not have to worry about storage and shipping and are able to focus on finding ways of expanding your business. So far, so good. However, many people that use this service are unaware of FBA errors that happen in Amazon warehouses.
These deficiencies in the FBA system can cause sellers to lose money every day. In this 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 fulfilment extends far beyond shipping. As an example for this, products shipped via FBA are preferred by Amazon when awarding the Buy Box. Further services provided by FBA can be divided into three areas: Storage, shipping, and customer service. In all these areas, Amazon can make mistakes. And they do.
This includes the storage of the merchandise in Amazon’s own warehouses until dispatch. The service itself, however, includes much more. There is, as an example, the option of outsourcing 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 company’s responsibility towards the seller also extends to this area.
In the event of a return, Amazon also takes care of the process. This includes providing 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 is a big advantage for you as a seller, because this means that you can concentrate on what you do best, which is selling.
FBA Processes Are Highly Complex
The general description of Amazon’s services already gives us an idea of how complex processes in a warehouse can become. Now if you take this process and break it down into the relevant mechanisms, this is how it would look:
- Delivery of the goods by the seller.
- Repacking and labelling of articles.
- Distribution of products to various FBA warehouses.
- Storage in the storage areas and possible transfer.
- Picking, packing and labelling.
- Return processing.
- Scanning and booking for all goods movements.
The scope of the processes above would already be complicated enough in a regular sized warehouses. The challenges are multiplied by the incredible amount of items that Amazon manages in its FBA warehouses on a daily basis.
What people also need to keep in mind is that Amazon FBA is no charity program, but is rather there to make Amazon money. The warehouse staff therefore has to work under constant pressure, which means that 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, the enormous time pressure, and of course the fact that the warehouse staff is only human after all, it is no longer surprising that, even with Amazon FBA, mistakes will be made at some point. Nobody can blame Amazon, much less the staff, for making these mistakes. It’s just a shame when these FBA errors cause the seller to lose money.
Despite all the criticism Fulfilment by Amazon draws to itself, it is still the best and safest way to offer fast shipping and excellent customer service for many sellers.
What FBA Errors Can Occur with 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:
- The item gets damaged and becomes unsellable.
- There are errors with returns.
- There is an FBA fee calculation error.
No. 1 and 2 result in the loss of goods under Amazon’s supervision. No. 3 results in an incorrect amount appearing on the invoice. Let us take a closer look at all of them.
#1: The Item Gets Damaged and Becomes Unsellable
Whether it happens in the warehouse or with the buyer – fact is, items get damaged. If this is the case, the product can no longer be sold and Amazon disposes of the item. It is written off.
With all the hustle and bustle in the dispatch centre, it can happen that products are incorrectly disposed of. Here too, the item is written off and is no longer recorded in the the Amazon FBA inventory. Naturally, reimbursement is harder to attain if the item you want to be reimbursed for is no longer in the records.
In addition, items have known to go “missing” from time to time. 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 item will also be written off.
#2: FBA Errors With Returns
Amazon is renowned for customer centricity. After all, Jeff Bezos famously built his company according to the principle: “Start with the customer and work backwards”. Amazon’s customers are aware of this nowadays and some even go so far as to exploit this.
It remains to be seen whether Amazon customers do the following on purpose or whether human error is the reason for it. What happens is 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.
In these two scenarios, the seller should normally get an Amazon FBA refund. However, reimbursement by replacing the value of the goods to the seller seldomly happens in this case. After an FBA error, the sellers are often left to carry the loss on their own.
#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 quite clear in these cases. Since the merchandise – and therefore the liability for them – was transferred to Amazon, any loss of value that occurs afterward must be reimbursed by Amazon. However, reimbursements are not made automatically. In fact, it is the seller’s responsibility to provide evidence of these losses in value and to claim the reimbursement from Amazon.
Proving this is not a problem either, since Amazon stores the bookings in various reports in Seller Central. However, getting these reports can be very difficult and time-consuming.
Up to twelve different reports have to be analysed and linked to the transactions in question. Taking into account the possibility of different time zones, the amount of time until the FBA error is located, and the specifications of the respective marketplace, the whole process tends to become more than confusing.
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 it takes 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 tiresome work for you: the “Lost & Found” tool.
SellerLogic Lost & Found analyses the data from the abovementioned 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 a way that is easy to understand 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 press “send”.
Thanks to our tool, not a single one of your reimbursement claims will be lost – and all you have to invest is minimal amount of effort. Should there however be any issues with one of your cases, our experienced staff will help you communicate with Amazon!
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 hawking over sheets of data, sellers can use SellerLogic Lost & Found. The tool finds every FBA error automatically and also directly provides the corresponding text template that helps them report and justify the cases to Amazon. This workload, which would normally take up hours of your time, is reduced to a task that only takes a few minutes. Moreover, if unforeseen problems with any of the cases should come up, SellerLogic’s Customer Service will support you during the communication with Amazon for no extra charge.
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