Sellers Outraged By Amazon FBA Reimbursement Update That Changes Calculation For Lost & Damaged Items
Amazon has updated their FBA inventory reimbursement policy for 2025 - and sellers are not happy!
Once this new policy goes into effect in March 2025, if an item is lost or damaged while in FBA possession before a customer order, Amazon will reimburse sellers either an estimated manufacturing cost or the actual manufacturing cost (if the seller supplies it) instead of the price the item is usually sold for.
We’re updating our Fulfillment by Amazon (FBA) inventory reimbursement policy to help provide you greater transparency and more predictability in how reimbursements are calculated for items that are lost or damaged before a customer order. This will help drive a more consistent approach that works as we support sellers with supply chain services across their sales channels.
Effective March 10, 2025, we’ll reimburse you based on the product manufacturing cost of the affected inventory. To help provide you greater control and accuracy, you can choose how we determine the manufacturing cost for your products:
- We’ll provide a manufacturing cost estimate for you. This estimate is based on a comprehensive evaluation of comparable products sold by Amazon, by other sellers, and through wholesale channels.
- You can provide your manufacturing costs directly. If you don’t provide your own costs, we’ll automatically apply our estimate which you can change when you’re ready.
To help you prepare, you can view and manage manufacturing costs in the Inventory Defect and Reimbursement portal starting in late January using a new Manage Your Manufacturing Cost page.
We’re constantly refining our operations and processes to prevent products from being lost or damaged and having to be reimbursed. For cases where reimbursement is necessary, we’re focused on ensuring timely compensation. We now offer automatic reimbursements for items lost in our fulfillment centers, saving you time, and eliminating the need for you to submit a claim to receive reimbursement.
For items that are lost or damaged after a customer order in Amazon’s store, we’ll continue to reimburse you for the sales price on the original order minus applicable fees.
But sellers aren't buying the line about this change providing more transparency and predictability, with the post in the Amazon Seller Community over 60 down votes and more than 50 responses so far - overwhelmingly expressing negative responses to the update.
Amazon is basically saying at any time we can declare your inventory lost, we will give you next to nothing excluding all your branding, packaging, handling and shipping costs and they will take your inventory and sell it for their profit
I guess I should never be shocked but Amazon basically going "we can screw you however we want and nothing you can do about it" here. You guys are horrendous at scanning in products and you lose thousands of our products every single year and now the plan is to have small businesses LOSE a bunch of money because you guys can't get your act together.
Amazon has always passed on external costs to small businesses but now, they are just openly passing on internal costs because they are terrible at scanning items in. Sometimes you guys really just are absolutely unbelievable.
Ever since Amazon announced no fee increases for 2025, I've been waiting for them to announce they've found a different way to mess with sellers.
Here it is!
I'm not happy about this at all. My costs are much higher than just the cost of the item itself. What about the costs to label and prep items for FBA? What about my shipping costs (both from manufacturer to my business, and from my business to Amazon FBA)? What about the insane "Inventory Placement Fee" nonsense?
Others expressed concerns that this could be a roundabout way for Amazon to try to collect cost of goods data, which could then be used by Amazon to undercut and compete directly against them for items they sell.
YAY! A great tool to harvest the Costs of Goods Sold from every seller!
In a nutshell: "We won't increase fees for you in 2025, but we have to make more money from you somehow"
they want your manufacturing costs to see where margin is and squeeze it with fees or their own brands as competition. there is no other reason they should want that information.
What do you think of Amazon's FBA Inventory Reimbursement update? Let us know in the comments below!
