Understanding Amazon’s Fulfilled By Amazon (FBA) Network

Amazon’s Fulfilled By Amazon (FBA) network is a service that allows sellers to store their products in Amazon’s fulfillment centers. Amazon then picks, packs, ships, and provides customer service for these products. This service offers numerous benefits, including increased visibility, access to Prime shipping, and the ability to outsource the logistical aspects of ecommerce.

However, while FBA can be incredibly advantageous for scaling an ecommerce business, it also comes with its challenges—particularly regarding inventory management and refunds for lost or damaged goods. Many FBA sellers choose to leverage this service for these reasons, but they are also familiar with its challenges—especially the task of shipping and storing products in Amazon’s fulfillment centers.

Not only is Amazon’s fee structure highly specific, its labeling and shipment requirements are too. Many sellers have discovered that even when they’re been specific about what is entering the warehouse and when, it’s still possible for items to get lost, damaged, or incorrectly returned. There are even examples where the packaging dimensions that Amazon bases its FBA fees on were incorrect, warranting a large refund. All of these cases can mean Amazon owes you money – but there’s a small window for making these claims, and Amazon is not going to seek sellers out to remedy the situation!

Increased Reports of Missing FBA Shipments in 2024

Although losing some inventory is expected when doing business with a marketplace as large as Amazon, sellers have reported a major increase in FBA shipments going missing in 2024. Items shipped to Amazon’s warehouse as part of FBA would show a lower item count than the seller shipped. Since most Amazon sellers keep a record of the shipment and its contents for their own profit and margin calculations, reports of Amazon warehouses losing FBA items started to fill up seller forums. 

Fortunately, Amazon didn’t miss the spike in instances of lost items, and has made updates to how it will reimburse sellers for goods. However, this proactive reimbursement system requires sellers to be much quicker at making claims than they were before – and they won’t be given much leeway when completing the task.

Amazon’s New Reimbursement Policies: What’s Changing?

Starting in November of 2024, Amazon will be proactively reimbursing sellers for items lost in shipments meant for FBA. Now, items that are lost in transit while being shipped to the fulfillment center (for example, when shipping your items to one of Amazon’s consolidated shipment points) will be reimbursed at cost. So will items Amazon drops, loses, or otherwise damages. 

This is a positive move for Amazon sellers, who will soon see automatic compensation for these claims. However, FBA  claims that aren’t automatically paid will need to be submitted manually – which, starting on October 23, 2024, will mean a two month (60 day) window of eligibility. FBA sellers will need to act quickly to recover lost goods if they want to be reimbursed, and any lost or damaged inventory will need a manual claim. Manual claims must be submitted within 15-75 days of being lost, since the fulfillment center needs time to try and deliver the goods, and the FBA system can search claims going back over 18 months.  

The Importance of Adapting to the New FBA Refund Window

In short, yes. Right now, sellers who request reimbursement for items lost in the fulfillment center can have the system search the previous 18 months for claims – sellers can get away with checking the system less often and still request a payout of any owing claims. With the window for claiming FBA items now significantly shortened (18 months to 60 days), and the items in question sometimes requiring a manual claim, sellers will need to stay on the ball if they don’t want to miss out. 

If there is any reimbursement owed, Amazon sellers must request the funds before Amazon will reimburse. This is key for larger sellers, since it can often take a significant amount of time for Amazon to recognise the missed shipment and be prepared to pay. This is an even bigger issue for Amazon sellers’ cash flow, since portions of shipments that go missing can also mean missing cash – you are out the value of that inventory until it works its way through Amazon’s business process. 

Staying on Top of Your FBA Claims

Unfortunately, managing FBA claims isn’t as simple as keeping a good spreadsheet. The sheer volume of transactions and potential discrepancies means that sellers must regularly monitor their fulfillment pages. Differences between the inventory Amazon counts and what was sent can take time to reconcile, and even if Amazon identifies a discrepancy, it’s up to the seller to act.

To avoid missing out on reimbursements, make it a habit to review your FBA shipments regularly and submit claims promptly. With the new policies in place, being proactive is more important than ever.

Conclusion

The new FBA refund policies introduced in 2024 bring both benefits and challenges for Amazon sellers. While automatic reimbursements are a positive step, the shorter claim window means that sellers need to be more vigilant in tracking their inventory and filing claims. By staying informed and proactive, you can ensure that your business continues to thrive within Amazon’s ever-evolving ecosystem.

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