Flexible return policies are a good and necessary service to our customers to ensure a positive experience and to give customers the confidence to shop on Amazon.

That said, the return abuse and return expense issues need to be escalated within Amazon and we need help in finding a solution that protects sellers, reduces the instances and costs associated with FBA returns.

Returns on Amazon are a silent killer; if your accounting isn't tight they can ruin your business before you know what hit you.

Below I breakdown the cost of returns with rough estimates. These vary by category, the estimates below are for Apparel. Would love to see the same breakdown in other categories.

The following list of expenses are a total loss in an FBA Return; I've included an estimated % of Sale Price to interpret the impact to total profitability.

1- Original Fulfillment Fee (30%)

2- Sponsored Products Total Average Cost of Sale (10%)

3- Returns Processing Fee (20%)

4- When Applicable- Additional Year of Storage or Removal for Seasonal Items (35%)

5- When Applicable - Lost/Damaged Inventory Expense (35%)

To further break this down, assume the product is priced for a 10% Profit Margin

BEST CASE RETURN: A salable/non seasonal item is returned for a loss of 60% of the sales price. This means one return wipes out the profits of the next 6 sales of that same item

WORST CASE RETURN: A Non-salable return OR a Seasonal Item is returned for a loss of 95% of the sales price wipes out the profitability of the next 10 sales!

Now do the math on what a 10% - 15% return rate in apparel does to the bottom line.... it's horrifying and frankly its unsustainable. We cling to survival by a mere rounding error.

This is a cry for help- we ask that Amazon step up to share more of the burden of return expenses to align Amazon Seller and Amazon Corporate incentives around returns; and to relieve Sellers of some of the financial risks associated to these returns which can be unpredictable and significant.

We believe that improving the financial health of Amazon Sellers will lead to greater innovation, opportunities for product expansion and an overall better and healthier Amazon Marketplace and Customer Experience.

Thank you kindly for your consideration.

If you've made it this far thank you for reading and for supporting this post by liking and engaging.

I'll share one last bonus scenario, the WORST NIGHTMARE RETURN. This has happened to us more than once and I have to assume it's happened many times that we never found out about as well.

WORST NIGHTMARE (DOUBLE) RETURN: A NON-SALABLE SEASONAL ITEM IS RETURNED AND ERRONEOUSLY PUT BACK INTO INVENTORY BY FBA

95% Loss in Year 1 sale (includes 1 year storage) + 95% Loss in Year 2 sale (Includes Damaged Inventory Expense) when the item re-sells in year 2 and is returned because it's unsalable (think a soiled outfit sent to a customer).

This double return of the same unit has now wiped out the profit for the next 19 sales of the same item!

This has happened to us more than once and the only reason we ever noticed was because our Account Health was jeopardized by a "USED SOLD AS NEW" complaint; This also required us to respond to the compliance team which is like pouring salt on the wound but that's a different story.

Thanks again for supporting this post and if Amazon gets this message thank you for supporting us Sellers.