Selling on Amazon offers many opportunities and is an excellent way to grow your brand. One of the most helpful tools that Amazon offers sellers is Fulfillment by Amazon (FBA), which boasts a sprawling network of Amazon-owned warehouses across the country. Sellers ship inventory to these Amazon fulfillment centers for storage and eventual fulfillment to the end consumer. Amazon’s fulfillment services are a foundational component of Amazon’s success.
However, these fulfillment centers aren’t perfect. They regularly make mistakes that cost sellers money, and sellers must petition Amazon for reimbursement if they don’t want to eat the costs. With many sellers unaware that they need to take action, we often see significant amounts of money left on the table.
Amazon’s fulfillment centers regularly lose or damage inventory, overcharge fulfillment and storage fees, or under-reimburse sellers. To get fully reimbursed, FBA sellers have to cross reference up to 17 reports to identify and submit cases.
There are quite a few mistakes for which Amazon may owe an FBA seller reimbursement, but two case types in particular account for the vast majority of inventory reconciliation cases:
Inbound shipments with items that have a discrepancy between shipped and received after 15 days.
Inventory lost minus inventory found and reimbursed.
At Kaspien, we see these two case types account for 95% of all FBA seller reimbursement cases. Below are other types of cases that account for the minority of reimbursement cases.
Customer returns that were damaged by Amazon-partnered carrier minus reimbursed.
Orders with SKUs where the charged referral fee (commission) exceeds Amazon’s estimated referral fee for the order date.
Inventory damaged in the warehouse.
ASINs with either dimensions or weight that have significantly increased compared to previous values, affecting fulfillment fee and/or monthly storage fee.
A refund was issued to a customer for a return, but the items returned were fewer than the number that was refunded.
Customer returns that were damaged in an Amazon fulfillment center.
Orders with SKUs where the charged fulfillment fee exceeds Amazon’s estimated fulfillment fee for the order date.
Customer return flagged as ‘reimbursed’ but the seller doesn’t see the reimbursement come through.
Customer return was flagged as ‘Unit returned to inventory’ but the unit was not actually returned to inventory.
Refund issued to customer exceeded the actual order total.
Customer returns with units returned to inventory under a different SKU than that which was purchased.
A refund was issued to a customer for a return, then the customer failed to return the item, and the reimbursement was issued but the reimbursement amount is less than the refunded amount.
A refund was issued to a customer for a return, the customer returned the item, and the reimbursement was issued but the reimbursement amount is less than the refunded amount.
Damaged inventory that has been damaged for more than 20 days and is therefore unfulfillable.
Due to the ambiguity of Amazon case management, managing inventory reconciliation manually is laborious and inefficient. Here’s the general process for manual case management:
As you can see, the FBA reimbursement process is arduous. In the long-term, few brands can afford to spend the time managing the manual process, but neither can they allow cash to bleed from FBA errors.
Luckily, there are plenty of software solutions for this problem, including our own proprietary seller reimbursement software, Channel Auditor.
Channel Auditor is a software that helps FBA sellers mitigate fees and recover lost funds. It does so by automatically identifying cases that are eligible for reimbursement and expediting case creation. It’s your Amazon auditor that never sleeps.
Amazon’s policies expressly forbid automating case creation in Seller Central. Those violating this policy can be fined, suspended, or banned.
Channel Auditor does not automate case creation, but it does the next best thing. It automatically identifies cases that are eligible for reimbursement, then provides the exact text and evidence needed to petition for reimbursements. All you have to do is copy and paste, click submit, and Channel Auditor does the rest.
First, sellers connect Channel Auditor to their Seller Central account, allowing it to pull inventory reports for their channel. Channel Auditor immediately and automatically starts cross-referencing multiple reports to identify Amazon reimbursement cases. Using this information, Channel Auditor can forecast how much money a seller can be reimbursed.
After inventory reconciliation cases are identified, sellers select the cases they want to create from within Channel Auditor. Channel Auditor provides the exact text needed, including links to evidence that supports the claim.
From there, Channel Auditor automatically tracks case progress and notifies the seller of their results.
A brand in the Health & Personal Care category started using Channel Auditor in June 2020. In a single month, they were reimbursed over $7,000! In less than five months, they recovered over $13,000 in Amazon seller reimbursements!
If you’re curious how much Amazon owes you but aren’t ready to start a subscription, that’s alright. Request a quote from Channel Auditor – for free – and we can tell you exactly how much money Channel Auditor could recover for you if you used it.
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