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Amazon Handmade Team / New FBA Reimbursement Policy
Next month Amazon is changing its seller reimbursement policy for FBA inventory lost or damaged in an Amazon warehouse. The current per item reimbursement amount - sales price minus applicable fees - seems pretty reasonable to me. In contrast, the new policy is extremely unfair to Handmade sellers.
Beginning on March 10, when Amazon loses or damages an item they will reimburse sellers “based on the product manufacturing cost of the affected inventory.” Unless we provide supporting documentation, Amazon will “estimate” our manufacturing costs and reimburse us accordingly.
To some extent I understand the new policy when applied to sellers who simply source a finished product from a third party and resell that item on Amazon. As anyone reading this appreciates, the problem is that the process of manufacturing handmade products bears little resemblance to purchasing finished products from third parties. Submitting documentation to Amazon with respect to manufacturing costs is going to be a nightmare for Handmade sellers. More importantly, creating handmade products takes a significant amount of time. Does anyone honestly believe that Amazon will take this time into consideration when determining an item’s manufacturing cost?
So here’s my question - can the appropriate people from the Amazon Handmade Team please act on our behalf in order to have Handmade sellers exempted from the new FBA reimbursement policy? I’m probably just shouting into the void here, but you never know…
8 replies
Seller_M94fHI9Bg7LMX
@Joey_AmazonDoes the team have any guidance for us on this? I did see that we would be able to enter our manufacturing costs through a portal that hasn't been rolled out yet, but will this portal have any limitations on what % of the price they will accept as valid? Handmade margins aren't like the margins people have who are importing from overseas.
Seller_bopmyWhbgIIOx
I can't find any information on which documentation is needed to prove the manufacturing cost for handmade items. It seems Amazon completely forgot that not everyone is producing China.
Seller_gwzuNYC3ogYNo
This page was just added for me today
https://sellercentral.amazon.com/inventory-reimbursement/cost-management
My replacement amounts across the board are about 43% of the Amazon retail price. $24.99 retail gives a replacement cost of $10.75.
Income after 15% and FBA fees is about $17.50 depending on FBA pick and pack fees.
So, in this one case, Amazon is reducing by 40% the amount they will pay me for their mishandling of stock.
I used this page and clicked UPDATE on one item as a test. I entered a new number as the replacement cost and it asks for more documentation. The documentation is limited to:
Accepted proof-of-value documentation and attributes
We accept the following types of documents as proof-of-value:
Manufacturer invoices
Wholesaler invoices
Purchase invoices
Commercial invoices
Chinese Fapiao (tax invoices), if they meet the required attributes mentioned below
None of this applies to a handmade seller making their own product. @Joey_Amazon Can we get some direction here?
Seller_aM7P5U7WUu86y
Please HANDMADE help us!! I am extremely unhappy and worried about my handmade items being valued as mass market imports.
We have to purchase supplies, provide the labor to create the items, and have business and overhead expenses as well. Most of us do not have large profit margins to begin with. Then we spend more time in labor to package and send to FBA.
This is an unfair policy for HANDMADE SELLERS and we should be exempted from this policy.
(Also, I had my returns set to return to my location where I could decide if a product was sellable and control my inventory. I have my own setup for donations. Now they can do whatever they want with them. I have had customers return other products instead of my product several times. There is no visibilty to this now.)
Thanks for your assistance!
Seller_gwzuNYC3ogYNo
Ignore my original reply below, and look at Tahmi's reply below mine.
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If you ship to FBA, warehouse personnel evaluate your returned items and either put them back in stock or mark them for removal. You can control what they do with "removal" items, either send back to you or destroy or donate. This can be set up in your account settings.
Regarding the customer sending back an item not yours. You can HOPE that warehouse personnel mark those items for removal. If you receive a item back from the warehouse that is wrong, you can fill out a case for reimbursement.
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