Increase Your Amazon Profitability with FBA Reimbursements
Learning how to use FBA reimbursements can increase your profitability as an Amazon seller.
Here we will look at the answers to five questions you might have before beginning your journey with FBA reimbursements. By getting to grips with these fundamentals, you can save your business unnecessary losses and snag additional profits.
FBA reimbursement basics
1. Really, how much can you get?
According to our research, the range of discrepancies of FBA inventory comes in at 1% to 3% each year on FBA sellers. A simple way to picture this is that somewhere around 1 to 3 units out of every hundred shipped via FBA will be lost, damaged, thrown out, or even overcharged.
Keep in mind that the flip side of this situation is that 97% to 99% of units are expertly handled by Amazon without issue. Given the colossal size of Amazon’s sales, products, and third party sellers, this success rate is no small accomplishment.
As an FBA seller though, you need to think like a savvy entrepreneur and keep your eye on your own bottom line. If your business generates one million dollars in sales each year this means that lost, damaged or otherwise unaccounted for units will make up a loss of $10,000 to $30,000, assuming the discrepancy rate of 1% to 3%. A loss of this size is well-worth avoiding by using FBA reimbursements whenever possible.
If you are hearing about the potential for FBA reimbursements for the first time, you are in luck. After reading this article you will be ready to put what you’ve learned into action. Depending on the size of your business, there may be an ample pile of cash to add to your business.
This money can then be put to work for you as an Amazon seller, increasing your potential success as an entrepreneur.
2. But what is the limit?
The window to claim your FBA reimbursements is not infinite with most FBA related transactions having an 18-month time limit.
Amazon’s FBA reimbursement policy allows sellers to open a case during this time, but if the deadline passes, sellers can no longer claim this opportunity. Punctuality is key here — and well worthwhile to recoup as much money as possible for your business.
Stay diligent about opening cases before the window closes so you can benefit from these extra funds.
3. What kinds of discrepancies should I look for?
Sellers face several kinds of FBA discrepancies that might benefit from FBA reimbursements. One of the most typical kinds is inventory lost when received by Amazon at the beginning of the FBA process.
If you wish to file for this kind of discrepancy, keep in mind that you have only nine months in the US market and six months in the UK market.
Other types of discrepancies occur further down the line when items might be damaged, thrown away, or lost.
Savvy sellers should also remain vigilant for incorrect charges from Amazon which may occur when a product’s weight or measurements are misidentified. With a 90-day window to claim these FBA reimbursements, sellers need to stay on top of their transaction audits.
Ensure that you conduct an audit of your FBA transactions regularly so that you don’t miss out on shorter window.
4. How can you seize this opportunity?
FBA reimbursements are an opportunity worth seizing because without them, a seller’s loss is doubled.
When an item goes missing, the seller’s first loss is the inventory, or the price the seller paid for the product. Not to be overlooked is the second loss, coming in the form of lost profit. That is to say, the money the seller would have made if the item had sold to a buyer.
When you seek an FBA reimbursement, Amazon in effect buys that product, and the money you make is just as real as if the item had sold on Amazon. This means that rather than losing a sale, you’ve gained one, practically speaking. This is a good thing for you and your business.
Taking a step back, you can see that FBA reimbursement means that discrepancies that could have been a misfortune, are now a stroke of luck.
Once you’ve recovered your funds through FBA reimbursement, consider what this cash could do to further build your business. You might wish to branch out into a greater diversity of products, create marketing material to advertise, or even repay any outstanding loans. FBA reimbursement can mean staying one step ahead as an entrepreneur.
5. How can you go forward?
If you have not yet audited your sales for discrepancies, or if you use Amazon’s auto-reimbursement process, you can still seek out the FBA reimbursements that you deserve.
FBA auditing solutions exist such as those offered by us at GETIDA. This service only includes applicable fees for secured FBA reimbursements. If no successful FBA reimbursements are made, then this assistance is free. This can remove a task from your to-do list as an Amazon seller while still getting the money you are entitled to back in your pocket.
Estimates of your potential FBA reimbursement is provided free of charge. If this might be a useful tool for you and your business, you can upgrade your account and start claiming FBA reimbursements. Get $400 in Free Amazon Seller Refunds with GETIDA.