Are You Overpaying Amazon? Review This Simple Checklist
Fulfillment by Amazon (FBA) has made sellers from all over the world very wealthy. Many have even quit their previous jobs to do nothing but sell on Amazon.
However, that doesn’t mean it’s going to be easy to succeed with FBA. You could be overpaying for their services in a number of ways if you’re not reconciling Amazon refunds, tracking your reimbursements, and avoiding the other pitfalls we’ve listed for you below.
1. You Need to be Reconciling Amazon Refunds
Part of being an FBA seller is accepting that you’re going to have to give refunds from time to time.
While you want to keep the number of refunds you give to a minimum, it’s equally important that you don’t simply assume you’ll get your item back just because a customer was returned their money.
The way it works with FBA is that the moment a buyer says they want a refund, Amazon gives them one – taking the money from your account.
The customer then has 45 days to return the item. If they don’t, Amazon should refund you, but that doesn’t always happen.
When it doesn’t, reconciling Amazon refunds needs to be a priority. This means confirming that your item wasn’t returned within 45 days and then alerting Amazon to this.
Generally speaking, reconciling Amazon refunds is pretty easy once you have done the research and made the request.
Still, many sellers don’t even know that they may not receive their refunded inventory.
Therefore, even if you haven’t issued any returns lately, you should still look into reconciling Amazon Refunds. You may find that you’re actually owed a large sum of money for these oversights.
2. Your Products Can be Damaged and/or Go Missing at the Warehouse
Here’s another example of where trusting Amazon too much is going to cost you. The company is supposed to reimburse you when your product is either damaged or goes missing at their warehouse.
As with reconciling Amazon refunds, however, this isn’t always what occurs. That’s why you should go through your inventory about once a month to make sure that anything not accounted for that hasn’t sold is either found or replaced. Otherwise, Amazon must give you a reimbursement.
It might not seem like this would amount to much in terms of savings. After all, isn’t Amazon the king of tracking and analytics?
However, the truth is that it happens far more often than people think. The warehouses they use are huge and their fulfillment process can be complicated, so it’s actually pretty easy for items – even large ones – to go missing or end up damaged.
3. Amazon Charges You to Store Your Products at Their Warehouses
For products they’re only storing for fewer than six months, you don’t have to worry about getting charged.
However, after that, Amazon basically collects rent from you. Their long-term storage fees are $11.25 per cubic foot for items that are kept in the warehouse for between six months and a year.
After that, you’ll be charged $22.50 per cubic foot.
Therefore, you have a powerful incentive to sell off your inventory ASAP.
Furthermore, you’ll want to think about how much inventory you keep with Amazon at any one time.
You may have an item that sells well, but it only sells about 20 units every six months. If you have 100 on hand, you’ll want to send 20 at a time to avoid the aforementioned storage fees. Otherwise, even though you’re selling a lot of product, your profits will also be suffering from avoidable overhead.
If it’s clear you need to readjust your inventory, you can pay Amazon $0.50 to return a standard-sized item or $0.60 for an oversized one. You can also pay them to just dispose of it. That service is $0.15 for standard-sized items and $0.30 for any that are larger.
Keep your eye out for promotions from Amazon, too. Every now and then, they’ll encourage FBA sellers to review their inventories by dropping the prices for removal and disposal.
Don’t let these and other Amazon FBA fees take an unnecessary toll on your profits. Just because Amazon offers an amazing service doesn’t mean you have to overpay for it.
4. Negative Feedback that Breaks Amazon’s ToS is Often Allowed
Amazon made a name for itself decades ago by offering customers the opportunity to rate the products they bought.
This same type of feedback exists for FBA sellers, too. The better your rating, the more sales you’re going to make.
Collecting positive reviews from buyers can eve help you win the Buy Box, which would skyrocket your sales.
Considering some 55% of shoppers have said online reviews influence their purchasing decisions, you can’t afford to take the negative ones lightly.
As it turns out, though, Amazon could be costing you money by not enforcing their own Terms of Service when it comes to leaving reviews.
In short, you can report any negative reviews that are based on the shipping or fulfillment of the customer’s order. Those things are completely out of your hands as the seller, so it’s not fair for you to suffer negative consequences because of them.
If you don’t report them, though, and they stick, you better believe that your profits are going to take a noticeable turn for the worse. Reviving your reputation can be nearly impossible, too.
Amazon understands this and will almost always remove these types of reviews. Just go to your product details page for the item in question and click on the review you want removed.
Click on “report abuse” and a comment box will pop up. Simply explain to Amazon that the review violates their terms of service as shipping/fulfillment is not something you provide.
That last part is important. Don’t leave it to Amazon to figure out why you want the review removed. It might seem obvious, but consider how many of these requests they probably get a day – many of which are most likely completely invalid.
It Doesn’t Have to be Difficult to Keep Your Overhead Down
If the above has made you feel a bit less enthusiastic about being an FBA seller, don’t worry. With Refund Rescuer, we’ve created a tool that will handle reconciling Amazon refunds, requesting reimbursements, and much more. It will automatically carry out the laborious processes required to keep your profits safe so you can focus solely on improving sales.