I’m not an antitrust lawyer, so I can’t comment on the merit of the FTC’s lawsuit against Amazon. What I can comment on is the shocking way the FBA Reimbursement Team continues to mistreat sellers in the exact manner alleged by the FTC.
The FTC claims that third party sellers are hurt by Amazon’s monopoly power. With respect to FBA, the argument goes like this:
1) Sellers must participate in FBA to reach Amazon’s entire shopper base;
2) Amazon’s monopoly has resulted in an absence of large ecommerce marketplace competitors;
3) Sellers are forced to stick with FBA given the lack of such competitors; and
4) Amazon exploits this situation by increasing FBA seller fees and providing sellers with unconscionable FBA support services.
Given the serious assertions made by the FTC, why does Amazon continue to make life so difficult for FBA sellers? More specifically, why is it so difficult for the FBA Reimbursement Team to promptly compensate sellers in situations where products have been lost or damaged at fulfillment centers?
The significance of this issue can be easily understood by reviewing the numerous Seller Forum posts on this topic. Our frustration stems from the fact that nearly eight months ago 84 units of our handmade products were lost after a transfer from the TEB9 fulfillment center to the CLE2 fulfillment center. The facts are not in dispute and the FBA inventory reimbursement policy is clear:
“If an item you send to us as part of the Fulfillment by Amazon (FBA) service is lost or damaged at a facility or by a carrier operated by Amazon or on behalf of Amazon, we will replace that item with a new item of the same FNSKU or we will reimburse you for it.”
Despite the straightforward nature of this incident, our attempts to obtain the appropriate compensation from Amazon have been unsuccessful (Cases 13895239731 and 15105015281). After initially responding to our emails with unhelpful and often irrelevant boilerplate replies, the FBA Reimbursement Team has now adopted a strategy of simply ignoring our pleas for help.
We are a very small company that struggles to make a reasonable profit each year. Despite our size, when we make a mistake we immediately take the necessary steps to make our customer whole. In contrast, Amazon’s net income in 2023 was $30.4 billion, yet the FBA Reimbursement Team ignores good faith compensation requests from sellers who had products lost or destroyed at fulfillment centers.
The solution to this problem is obvious - Amazon can (1) use a portion of its profits to increase the size of the FBA Reimbursement Team and (2) amend its reimbursement policy to ensure sellers receive compensation within a specific period of time (e.g., 30 days from receiving notice). It’s the right thing to do…and it might help appease the FTC as well.
