💰 AMAZON CHANGES REIMBURSEMENT POLICY - AGAIN

Amazon has announced an update to its FBA inventory reimbursement policy, effective March 10, 2025, introducing significant changes that impact how sellers are compensated for lost or damaged inventory.

Below is a concise summary of the policy and its implications:

Key Policy Changes:

1. Reimbursement Based on Manufacturing Cost:

● Reimbursements will no longer be based on the sales price but rather on the product manufacturing cost for items lost or damaged.

● Sellers have two options to determine manufacturing cost:

⤷ Amazon Estimate: Based on similar products sold by Amazon, other sellers, and wholesale data.

⤷ Seller-Provided Cost: Sellers can proof their own manufacturing costs. If no cost is provided, Amazon's estimate will apply, but it can be updated later.

2. New Tools:

● A Manage Your Manufacturing Cost page will be available in late January within the Inventory Defect and Reimbursement portal, allowing sellers to manage and update their cost information.

3. Automatic Reimbursements:

● For items lost within fulfillment centers, Amazon will now issue automatic reimbursements, eliminating the need for sellers to submit claims.

4. Post-Customer Order Reimbursements:

● For items lost or damaged after a customer order, reimbursement will continue to be based on the sales price, minus applicable fees.


Implications for Sellers:

1. Reduced Reimbursement Payouts:

● Moving to cost-based reimbursement means sellers will likely receive lower compensation, as manufacturing costs exclude other expenses like shipping, tariffs, duties, in-bound logistics, and prep costs.

2. Increased Administrative Burden:

● Sellers will need to track and document accurate manufacturing costs to ensure fair reimbursement, potentially increasing workload and operational costs.

3. Risk of Losses:

● Sellers may face situations where the reimbursement amount doesn’t cover the full investment in lost or damaged inventory, eroding margins.

4. Transparency Concerns:

● Some sellers worry about Amazon’s potential conflict of interest, as the company controls inventory handling and could theoretically "lose" items, reimburse at cost, and resell them.

This update marks a shift towards cost-focused compensation, emphasizing the importance of proactive inventory and financial management for FBA sellers.


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