Amazon’s FBA reimbursements pilot: Analyzing the initial data

Amazon recently started testing a new program to automatically pay back Marketplace sellers for lost inventory in their warehouses. This auto-reimbursements program aims to make it easier for sellers to get reimbursed without having to manually audit their books and file claims themselves.

After one month, we looked at how well the program is working.

Reimbursements pilot: Data analysis

We looked at 152 sellers in the program and checked their lost inventory data from July 26 to August 5. We wanted to see how many items were automatically reimbursed by August 26. Here’s what we discovered:

• 6,204 items were eligible for reimbursement, worth $110,372.46
• 4,233 items (68%) were automatically reimbursed, totaling $70,229.98
• 1,971 items (32%) were not automatically reimbursed, even though they should have been. These were worth $40,142.48 in ‘lost’ funds.

Details on our data methodology:

• Data collection: We gathered lost inventory and reimbursement data for 152 of our clients enrolled in the pilot program. We suspended any manual case-filing activities for these accounts after being notified of their inclusion (while still leaving ourselves time to file for any items that weren’t auto-reimbursed through the program).
• Observation period: We focused on lost inventory events between July 26th and August 5th, allowing sufficient time (three weeks) for the auto-reimbursement process to be completed by August 26th, 2024.
• Data analysis: We compared the number of successful auto-reimbursements (Category A) against instances where items were eligible for reimbursement but not automatically processed (Category B). The combined total of A and B represents the universe of eligible lost inventory events.

What does this mean for Amazon sellers?

While Amazon’s new program is a good start, it’s not perfect. About one-third of lost items weren’t automatically reimbursed. This means sellers can’t rely only on Amazon’s system to get all their money back.

Introducing a case ID for reimbursements

A welcome change with this pilot program is the inclusion of a case ID (15178081401) with auto-reimbursements. Sellers will have a clear reference point for each reimbursement, which is helpful when performing a manual inventory audit.

What do sellers need to do to protect their profits?

1. Manually track your inventory and reimbursements, and audit them regularly
2. Look for items that should have been reimbursed but weren’t
3. Consider using services like Margin Pro that help manage reimbursements
4. Stay up-to-date on Amazon’s policies

Conclusion

Amazon’s new reimbursement program is helpful, but it doesn’t catch everything. Sellers should still be proactive in managing their inventory and seeking reimbursements to make sure they don’t lose money on lost items.