A Must Read... Beginning or Continuing to use FBA?


#1

FBA nightmares are all very REAL. We’ve experienced less than some over 7 years and 300,000 units, but called WHOA yesterday. Here is our checklist for those considering the FBA program showing why large sellers like ourselves would LEAVE the program:

  1. FBA cannot count, Check-in is totally broken. Items will NEVER be checked in accurately in the current system. Expect a continuous 5%-10% error rate across all shipments, regardless. (for Case Packs - shipping ONE product per box. If you send “Single Units” or Mixed Items in boxes expect a much higher Error Rate of 50%-60%. This will be YOUR fault, always.)

  2. If you accidentally send EXTRA units to Amazon, these are kept by Amazon as Free Units. Product sent but not entered in your Shipping Plan is an “unforgivable mistake” and you are punished by forfeiting said Inventory. For any Shortage in that Shipment which contained extras, Amazon now uses these “free extra units” to offset your lost units and you will receive no reimbursements for them. But, it gets MUCH WORSE!! If your “free extra unit” was worth $5 but your “actual lost unit” was worth $290, it doesn’t matter - all confirmed extra units have INFINITE VALUE to cancel any lost unit from said shipment. Extra Units Received can and will be used to offset VERY EXPENSIVE INVENTORY, regardless of financial loss to Seller! (We have experienced it for items in same shipment, someone needs to confirm if this crosses over to other shipments)

The fact that EXTRA UNITS HAVE INFINITE VALUE should give tremendous pause to use FBA. If you are selling products within a wide price range, you are setting yourself up for extreme losses when the inevitable mistake occurs. (Example: 3 Laptops + 12 USB Cables planned, employee puts 15 USB cables in box. 3 Extra USB Cables sent will DISQUALIFY REIMBURSEMENT for 3 lost laptops!)

AND, you will experience too many “EXTRA UNIT COUNTS” which you never sent and are truly not your fault. Factory Case sent has 24 pieces, but Amazon shows 27 received. These 3 “Bogus Extra” units become a BLANK CHECK for Amazon to cancel out any expensive unit THEY ACTUALLY “LOSE” from that shipment. Amazon will never believe your Reconciliations, no matter how obviously you can prove them. Got any proofs including Tracking Numbers, Signatures, Box Weights, Bin Checks, Pictures, Invoices, Video Evidence, Notarized Affidavits, Multiple Human Witnesses, Court Orders, Temper Tantrums, or FBI Investigations? This is now all irrelevant to Amazon.

  1. NO MORE RECOURSE! If Amazon doesn’t promptly “check in” your inventory, showing the Full Unit Count under the Reconcile Tab, then it is simply lost. Today, you cannot get $$ back for it, and Reps are just not friendly or understanding. Yesterday, Amazon refused to even investigate or acknowledge Tracking Number showing “Delivered” to their warehouse as proof of delivery, USING THEIR CARRIER. Wouldn’t even research it.

The only “proof of delivery” used by Amazon now is when someone opens your box and starts scanning products. (THIS IS INSANE, but 100% true). We’re not seeing Delivered Boxes appearing later if they miss initial Check-in. Delivered Boxes lost inside FBA warehouses are no longer checked in days/weeks later once Reconciliation appears. If missing Units don’t show up as missing in Reconcile Tab, they are simply kept by Amazon, and NO REIMBURSEMENT will be granted, even though you have PROOF OF DELIVERY. (Logically, a box Delivered but not Checked In should eventually get Checked, but Delivered goods have been vaporizing for too many, Tracking is IGNORED, and NOT being reimbursed.)

  1. NO INSURANCE CLAIMS HONORED! If you use Amazon Partnered Carriers and the product is lost before getting to Amazon, do not expect help from Amazon to recover your losses. The carrier will tell you it’s Amazon’s problem and Amazon will tell you it’s the Carrier’s problem.

  2. Amazon’s unwavering position is WE ARE INCAPABLE of making a mistake. They will trust their 2 week old trainee over their 7 figure veteran seller any day of the year. Expect to have your intelligence insulted constantly and continually, and you never have any credibility with Amazon. It is always 100% the Seller’s fault, regardless of your issue, so prepare for great difficulty and much time spent getting things resolved. Keep antacids handy :slight_smile:

  3. EXPECT HIGH Buyer return rates, product losses, warehouse damages, & extra overall costs. Buyers are abusing Prime benefits like never before. For each sold unit, you’ve lost Shipping costs + 3% of selling price. Full refund is always given to the buyer from YOUR current proceeds. ($15 unit nets $9 after fees. Buyer buys 6 of them then returns. We got $54 to our Settlement, but $90 refund is taken back). Our average loss on Returns is 40% of retail price. Some issue will affect at least 5% of all units sold. If we sell 100,000 units, FBA creates gobs of extra work for 5,000 of them.

Buyers WILL destroy, partially use, do experiments, or simply exchange your products for something else, but always get a FULL refund. Amazon never checks any return for accuracy or completeness and virtually never punishes buyer Fraud and Abuse toward a seller. (They take action on items THEY sell, but not on ones YOU sell)

Buyers are usually charged something for Returns EXCEPT for these 2 reasons: “Item Defective”, or “Not as Described on Website”. 95% of buyers lie about the Reason they are returning - to get that Free Return Label. Amazon never shares return $$ with sellers. But Amazon punishes you for these “bogus return reasons” and could close your listings.

  1. Larger FBA orders are usually bad, seldom good. You are charged 100% FBA Fees for each unit, so it’s sickening when Multi Unit orders are RETURNED. We finally set Max Order Quantity = 3 to stop this nonsense. Competitors love buying 50+ Units and then return them to drain your inventory or crush your business, costing you $100’s each time. Businesses love to make large orders before testing product, then return it all. Amazon has NO MECHANISM to protect against ABUSE, buyer stupidity, or rogue competitors.

  2. INVENTORY HOLDING ACCOUNT is a giant problem and will delay or prevent reimbursements. It also makes Auditing and Reconciliations a nightmare. Amazon does not keep “clean books” like other Fulfillment companies. After they pad their “Inbound Receive Counts” with false positives, or “find reimbursed units later”, they add units to a “Holding Account”. This means NOT a part of your Inventory, not available to be sold, and Amazon owns them. Amazon keeps so many Units off your books and uses them to offset future shorts, customer returns, and warehouse damaged units. You never know what is in this account or when it will appear. This whole thing seems very bizarre and extremely shady, but does NOT appear to benefit sellers or make us feel comfortable at all.

  3. INSTANT Buyer Refunds, forever Seller Reimbursements. Every time a buyer clicks the Return button, the money is instantly taken. Buyer usually doesn’t return the item but it will be 45-65 days before you receive Reimbursement. Amazon issues “auto reimbursements” about 50% of the time. The rest of the time you will have to follow up, open the babysitting Case, or hire 3rd party software to do each and every reimbursement. It gets old!

  4. 3rd Party Auditing. You will need a service and pay them $100’s to keep track of all your Lost Inventory and Buyer Refunds so you can collect all your $1000’s rightfully due once you reach a certain volume. Typical cost is 25% of the refund collected from Amazon.

  5. Stealing SUPPLIER Information. We have come to realize that so many Shortages are INTENTIONAL, otherwise they make no logical sense. Amazon did not get this big BEING stupid, but it is very clear they PLAY stupid all too well. It became CRYSTAL clear when Invoices became required for 100% of all Cases. (Amazon creates a fake Shortage on all your items, forcing you to provide Invoices to get money back. NOW Amazon has captured your Supplier Info on 100% of FBA items, and soon they will be selling them. It is PUBLIC knowledge they were doing this, but HOW they are doing it is ever more clear.)

  6. Your FBA Inventory is ALWAYS in motion, and some units will move multiple times, which wears the packaging out. If you are selling large amounts of an FNSKU, 40-70% of Units are constantly in Transfer, which means they cannot be sold until landed, requiring a much larger inventory to meet demand and more “backorders” for buyers. You are still charged Storage Fees on all items, while it takes WEEKS for them to crawl around the USA.

  7. Inbound Receiving and intra-FC transfers are NOT fast. From the time UPS Ground reaches your Receive Center it will take anywhere from 10-20 days to become mostly available to order. Pallets take 20-30 days to reach Dock plus another 20 days to reach Buy Box. When 1 out of 120 FC’s sells a unit, another one starts moving there. Today, 40% of your total FBA inventory NEVER stops moving until it is 100% sold out. It takes a LOT longer to sell out because of all these time consuming transfers.

  8. STORAGE Fee and Dimension “calculations”. The way their laser scanner works is to create a “virtual box around absolute outermost points”. Imagine a rolled up Newspaper or Socks inside a large plastic bag. While you could fit 50 of them inside a 12x12x12 area, the Laser Dimensional Scanner doesn’t look inside clear plastic bags, nor consider these bags are stackable in a bin. Thus, you may see 8-12 Newspapers or Sock type products taking a full Cubic Foot of Storage instead of 50+ units. Dimensions Control FBA Shipping costs too, so using plastic bags will kick your FBA Fee up to next tier because of extra plastic flopping around. Storage Fees get really high, really FAST, becoming insane during the Holidays. You must shrink down your packaging to an absolute minimum, pack tightly into small boxes, shrinkwrap rather than Poly Bag. Failure to do this will obliterate your profits, but it is NOT intuitive or well explained in Help.

  9. Extra PACKAGING Requirements to use FBA. Few people can figure this one out before experiencing substantial learning pains and FBA restrictions. All Units sent to FBA must be in adequate package suitable for shipping that unit as is. Amazon doesn’t baby any items, they throw stuff around like UPS terminals. So if you are going to go through this much trouble, just ship it yourself.

Too many sellers have FBA privileges suspended because they cannot figure out how to adequately prepare their items. These fly down conveyor belts at 60mph and must survive rough handling in and out of bins traveling cross country to many Fulfillment Centers. EVERYTHING must be boxed, bagged, taped, flaps secured, bubble wrapped, or shrinkwrapped to protect against dropping, kicking, throwing, scuffing, tearing, dirt, fingerprints, etc. The buyer must receive your FBA units in PRISTINE brand new condition just as when they walk into a retail store.

  1. Amazon will be selling YOUR TOP products soon. This just happened to us! Once something reaches 10-20 units per day, you can expect Amazon to be your next Competitor. Amazon is now selling our #1 Seller which forces us off the page or to drop price $5 and cut Margin by 50%. Of course Amazon and Suppliers deny such things, but the truth is very plain. This can cost you $10,000 on up each time it happens, but make no mistake, it HAPPENED only because you used FBA :frowning:

  2. Stranded Inventory. There are too many FC which do not process Inventory Removals. At least once per month we try to pull something and it will take WEEKS to be “transferred to a warehouse that can send back to us” which requires opening a ticket. It is bizarre that all Amazon Warehouses send Buyer orders, but all can’t process Seller MCF or Removal Orders??

  3. You must babysit everything, too little tooling for your benefit. Amazon does NOT provide enough automated process for the Seller. You must OPEN A CASE to request refund, open reimbursement claims, solve Inventory problems. Once you reach 1,000+ units per month, it becomes exhausting how much work actually needs done daily. After all Amazon automates EVERYTHING for itself, just nothing for the Seller which BENEFITS them. Any process which TAKES from a Seller is fully automated however :slight_smile:

We should never have to “apply for reimbursement” Amazon’s system should do it’s own automate audits, seeing all Received Units - Sold Units - Remaining Units = Reimbursed Units. This could all be so simple, yet Amazon makes it way too difficult. FBA keeps you in that constant state where Amazon rightfully owes you lots of $$$, for which you will have to Open Case, experience difficulty collecting, and much of it will be Reduced or Denied.

  1. Artificial Intelligence = Satan. I cannot put into words how utterly and absurdly incompetent this “technology” is. I call it Artificial INCOMPETENCE. It virtually never makes the right decision. It seldom fully understands your need, but can NEVER fully meet it without requiring Human Action. BUT, Amazon still thinks its smarter than any Seller who ever lived, and the Terminator has been fully released to wreak havoc in your business.

Also bear in mind, Amazon’s AI cannot make a mistake either, and all of it’s decisions are final. Amazon is using A.I. to do virtually everything in its operations, and to make massively impacting mission critical decisions affecting your account and livelihood. When it visits your account or gives you it’s Answer it’s pretty much never the desired outcome. Keep Valium Handy for all AI interactions :slight_smile:

  1. LACK OF REAL SUPPORT, NONE LEFT FROM USA. This should be #1 on the list, but you shouldn’t need Support every day. WHEN you need Support, good luck! Amazon has fired all USA workers, the only staff appearing to be from the USA are salesmen for FBA Europe or stuff like that. So you have 7 and 8 figure businesses making Amazon over $2,000,000 per year net fees. Their mission critical issues are being decided by someone in India or Phillipines making $150 per month who hasn’t USED AMAZON, nor SOLD ON AMAZON, nor RAN A BUSINESS, who clearly does not UNDERSTAND what the Seller is trying to say. They don’t understand our Language or our Terms, they don’t share our values or beliefs. Worse, they are GETTING A VERY BAD ATTITUDE and it’s just not worth it to have to deal with them. Arguing is pointless once a couple offshore decisions are made, you aren’t winning :frowning:

If you don’t do FBA, you will rarely have to deal with any Support. So few issues with Merchant orders and a fraction of the returns. It seems better to take the sales hit and avoid dozens of high stress hours per month dealing with myriad issues just to make a few $1000 extra. Too many Prime orders aren’t permanent anyway!

The idea that 85% of Amazon buyers are all Prime is simply NOT TRUE. When we turned off our Merchant Fulfilled offers, sales plummeted. Prime buyers account for 70% of sales when an item is PRIME. When the item is not Prime, sales reach 80% of Prime volume. There are some people who filter for Prime only, but those very people will buy 20 things and return 17 of them.

We no longer care what the fallout is, even if sales fall 80%, we are just done with FBA until it changes. We are losing $1000’s per month, but when Amazon is NOT accountable for DELIVERED FBA GOODS, this has ceased to be a manageable relationship. It is unacceptable and OUT of control what A.I. is doing and yet how vulnerable we feel with $100k inventory sitting in warehouses which could be snatched from us at any moment and WE HAVE NO RECOURSE??


#2

FBA seems to work for some people. It didn’t work for me. After about 8 months, I recalled everything and resumed FBM. I sleep better.


#3

Some of the weirdness you’re talkin about, is what " Funky "was so vendament about lost misplaced, not reimbursed items…

Then posting it publicly on the Forum…

That & her opinion on taxes, a couple other things are what got her banned till she’s probably dead at that point… and whatever year the permanent ban dropped off…

I pulled out of FBA, it’s about the time they change the rules about one book and be exempt from Storage cost… it just didn’t work for my long-term, long tail inventory…

Oh & they lost stuff, some of it never got checked in, some of it was MIA , when I pulled everything out…

The Lost / check in -stuff I never tried to get reimbursed for?

The missing books / stuff that they still had it was on-the the removal order , they made good on that… a partial series of Charles Schulz, peanuts and other trade size paperbacks, that were vintage…

Trying to reconcile what I had removed, & what came back was an absolute nightmare, and it came in poorly packed boxes were broken, almost no dunnage, sometimes a very small little slip kind of like a cash register receipt that might be in the Box…

I formed a good relationship with the UPS guy, he insisted on carrying everything around back for me because he thought it was too heavy… I was not home one time - raining, he covered up a bunch of it by the side gate with a plastic bag… I also regularly fed him dinner…

He always waves to me when he sees me tooling around on my Vespa…

Everything that came back was still sellable, I wrapped everything in heavy file folders, heavy butcher paper, or boxed stuff…

My sales weren’t all that great anyways, I don’t think I ever actually had the buy box?

Never again…


#4

@3rd_Venue,

I noticed this, as well. I did FBA almost a decade ago, got out of it, then dipped my toe back in about 2.5 years ago briefly before stopping again. I got out, because of the liability I felt for FBA creating nexus and sales tax liability.

Regardless, I found the fight to get credit for non-returns that should have automatically posted unethical. It is virtually identical to the endless work/unnecessary circles the medical insurance companies run insurees through to get them to give up.


#5

The “Defective By Design” approach to provisioning the Customer Experience’s support needs.

Ma Bell may have invented it, but the fruits of the MBA Revolution have perfected it.

On another note, my friend - Happy Thanksgiving to all!


#6

It’s the same design for recharges. I’ve NEVER received a refund credit for a buyer cc recharge without contacting jeff@amazon.com after exhausting the process.

Happy T-giving to you, as well


#7

Me thinks there are too few FBA sellers in this Forum? There are nearly 1,000 comments on another thread about losing Reimbursement Rights on trackable goods being delivered by Amazon Contract Carrier. I finally got this reply from them, still not acceptable and doesn’t even acknowledge the real issue, or even make reference to Policy:

Greetings from Amazon,

We have completed an additional check in response to your request for further investigation of the item(s) and we still have no record of receiving the specific units in question. Please note that receive discrepancies can result from many issues including shipment preparation defects. Please refer to the FBA Inventory Requirements help page in Seller Central for more details about our inventory and shipment requirements.

As a gesture of goodwill, we have issued a reimbursement for the missing units in Shipment ID:

All you successful sellers out there, how on earth do you tolerate 10-15% ERROR rates on every single shipment?

Is there ANYBODY here who does not experience at least 10% Error Rates with every inbound shipment, where the Unit Counts are not correct according to what you sent?

I really like FBA, when it works. But this is a real wake up call. What if it was a $20,000 pallet? I don’t think I can move forward with this response, I will wait for a reply from the Executive Team.


#8

I finally found the Help page that goes over this in pretty good detail:

https://sellercentral.amazon.com/gp/help/200213130

So, the way I read this, if I have UPS Tracking which says delivered, there should be NO circumstance where I don’t get reimbursed? All of Amazon’s replies keep saying the same thing, “We have no record of receiving these units” and “Please see the FBA prep guidelines” LOL


#9

Again, defective by design. Look at other threads where Amazon has been selling “destroyed” inventory from FBA sellers and the differing channels owned by Amazon.
Some of us have found FBA is not a good fit for what we sell because of the fees and time to sell.
Others have fast turning products and can spend the time over the inaccurate counts and defects of shipping to get reimbursed.
Was too much time and trouble for the amount of reimbursement.
YRMV


#10

I do not currently experience at least 10% with every shipment.
During the past 6-10 months, our experience has been they’ve been pretty accurate. For the last 6 months or so, they’ve been having all our shipments sent to 1 place and the counts have been mostly spot on. Our most recent shipments were split and these now have inaccurate counts. They’re not yet eligible for reconciliation, so don’t yet know what the outcome will be. The inaccurate items are all missing, no overages.
We don’t place any high ticket items in fba.
Our main problem with them in recent months has been so many items stuck in ‘processing’, so often. We had seemingly curtailed that problem for a long while after changing our labeling and packaging methods, but it is suddenly back.

I would never send in a $20k pallet. And would not continue using fba if I had a 10-15% error rate on every single shipment. If I examined all my processes and could find no fault on my end or some way to solve the problem, I would no longer use fba at all.

All that being said, keep in mind I’m no longer a ‘6 figure’ seller, since I’ve been winding down my business in preparation for retirement. So my shipments are much smaller than they used to be. I no longer have employees, so every single item is now packed and shipped by myself. Every item in every shipment is counted a minimum of 3 times by the time it goes out the door.

Currently, those are my only comments on the subject.

I hope you’re able to find viable solutions to your issues. Good luck!


#11

I don’t. Mind you, I’m a small seller who sends 1 box shipments of used books. I have had 1 book missing in one shipment in the last 6 months. I average 2-3 shipments a week. I am VERY careful to be accurate. I have my issues with FBA but missing product has not been one of them.


#12

Sounds like this should be in seller university :star_struck:


#13

How would Amazon “destroy” inventory? In reality, it would simply mean pull and send away…


#14

You have the option of paying to remove inventory at a minimum of $0.50 per item if standard size and more if oversize r weight, Removal Order, and shipped back to a location. Or you can have Amazon dispose of inventory at $0.15 per standard item. Many FBA sellers think dispose means destroy. Warehouse deals, other platforms, or selling at some minimum are all options besides destroying for disposed FBA inventory.
So typically Amazon will sell the inventory that FBA sellers disposed of, as well as reimbursed inventory, or damaged or returns if not Removed.


#15

2 of the last 6 shipments i sent in recently are miscounted and still in receiving…one is 5 under what I sent in, another is 84 units OVER what I sent in…One of these items I only sent 1 of in, but Amazone ‘received’ 2 of this item…I sold one yesterday but the listing is still showing an offer from me, presumably for the 1 unit that Amazon THINKS i sent in, but really did not. If the 'ghost item is sold, this will result in a disappointed buyer when Amazon has to cancel the order.

I love how Amazon FBA now just relabels your products if they miscount them between items:

On the other hand, i just got reimbursed for an expensive DVD set that a buyer bought and returned because of an error on the catalog page that I did not input (Disc count; why the customer complained I don’t know–they got the full program content on the 3 discs but she was irritated they didn’t come on 4 discs–whatever). Amazon deemed it ‘customer damaged’ because it looked like an elephant sat on it, but the real cause was that they sent it to the customer, then the customer sent it back, then it came back to me, all trips probably in a flexible mailer instead of being packaged properly in a box.

Then I did have a box of items go missing…it arrived at the warehouse but was received as ‘0’ units. They requested an invoice, I sent it, and they reimbursed for the lost shipment at the selling price.

So sometimes it works out.

It’s really only good for products that are virtually indestructible and not media that can be burned to a PC, like CDs…i have had a rash of ‘defective’ CDs over the past year…never in my life have I seen so many ‘defective’ CDs (ahem). Would be nice if Amazon charged restocking fees when a buyer returns media items in no-longer-sealed condition–I am phasing out CDs from my (FBA) inventory.


#16

Maybe you should be posting on the FBA forum

https://sellercentral.amazon.com/forums/c/fulfillment-by-amazon


#17

We are exclusively FBA. Our inbound orders have ranged in size from about 6 cartons on the low end to 7 pallets on the high end. We don’t have an error rate of 10%. Maybe our product is just easier to count and work with then most. But, Amazon fulfilment might mess up counts on 1 or 2 items for every 1,000 inbound units we ship. That’s only about 1/10 th of 1%.

For us the FBA error rate is minuscule. Especially when it’s compared with the errors that we made by doing this ourselves with our own in-house fulfillment team.

(I seriously hope none of those great guys are reading this: ) but they messed up way more than Amazon ever does)


#18

are you mainly sending in case-packed items? I seem to have very few errors when I send in mulitpes of one item…they don’t even count…they just scan one item and assume the count is right.


#19

About 60% of our goods are case packed, there hasn’t been a single error on case-packed items. Maybe your right they aren’t even counting them. Any error that might occur has been shipped in non-case pack.


#20

Un true. They are added to the inventory.

[quote=“3rd_Venue, post:1, topic:541619”]
If you accidentally send EXTRA units … For any Shortage in that Shipment which contained extras…,[/quote]
Why you assume extra units as your accident, but shortage as amazon mishandling ?
Maybe your labeling system has flaws…do you use FNSKU, good quality labels and printer/ink ?
If you have so bad experience, why you contibue to mix inexpensive and expensive items in the same box ? why not learning from experience ?

How can they be when you have high percentage of missing items on many shipments ?

Thats true, but FBM will not solve this problem…you still have to accept returns…charging buyers for shipping or restocking fees may result in A-Z claims, chargebacks and negative feedbacks…something to consider.
And of course labor on your end which maybe costly.

Same for FBA and FBM…FBM will not address this issue.

What is it ??

I monitor mine, almost perfect and easy to audit using amazons tools

Don’t know about them much, but I know that they don’t have access to information that sellers don’t have…we have to know how to read amazons reports.

Same for FBM.

How can you automate this ?

This is done by amazon…we apply for things that amazon system does not catch.
Check your reimbursement for a month…do you see automatic reimbursement for warehouse damage for example ?