Should You Use an Amazon FBA Reimbursement Software or a Service?
Amazon sellers are hard working folks. Whether you’re out there branding your own private label products or strolling the aisles of Target and Home Depot for items to re-sell, being successful on Amazon requires a ton of work.
Something you may not have thought much about is the fact that Amazon makes mistakes. Due to the high amount of volume of sales, errors in fees, commissions and customer returns happen. Let’s take a look at these issues and what you can do to protect your profits.
Why sellers need to monitor their FBA account for reimbursements
By now, you’re well aware that Amazon often refunds customers before they actually send the item they want to return back to Amazon. Every single day, Amazon customers are refunded the purchase item without having sent the item in.
Most of the time, the customer returns the item in sellable condition. But sometimes, they don’t return it. Amazon is supposed to reimburse the sale amount (you can check your Reimbursement report for the status of all claims automatically opened by them) however, things fall through the cracks.
Additionally, items may be returned by the customer but then accidentally not added back to your inventory. In fact, this is actually the most common Amazon mistake.
Other issues include:
Misplaced inventory (after inbound shipment)
Damaged inventory never reimbursed to the seller
Mischarged commissions (wrong product category)
There are three types of FBA fees, including fulfillment fees, storage fees, and commissions. Within each of these three categories there are numerous things that can, and do, go wrong.
Options for protecting your FBA account from fee errors
You have four different options for watching over your FBA account to make sure that no reimbursement goes unaccounted for.
Software: There are a few different software products on the market for handling FBA reimbursements. When you sign up, you provide login credentials for your seller account, and the software crawls all reports for any discrepancies. Then the software generates an automated claim to Amazon. These tools are typically offered at a low monthly fee, however because of the automated claims, they are not recommended. When claims are automated, they might be erroneous, low-quality or duplicates of issues known to Amazon.
Service: Trusting a third party service to handle reimbursements is a very different option than trusting software. There will be a real human on staff who is filing claims for you. Some services also do account monitoring the manual way as well, but a top tier service will use software during the audit phase to catch more errors than the human eye, and then have an employee validate and file the claim.
Do-it-yourself: Small sellers will often create their own processes for discovering and claiming refunds. You can find tips and strategies here and here. While searching through all your reports Manage Orders, Inventory Adjustments, Inventory Event Detail, Removal Order Detail, Received Inventory and Daily Inventory reports inside Seller Central might be realistic for low-volume sellers, this weekly task could very quickly overwhelm more successful sellers who need to spend their time elsewhere.
Hire and train an assistant: The fourth and final option is to train your assistant to check your inventory for issues so you don’t have to. Should you go this route, you’ll want to create email templates for the claims that they can use, and also set up a weekly auditing process for them to follow (see resources in the do-it-yourself section above). And don’t forget to wait the appropriate amount of time to allow Amazon to create the reimbursement before your assistant files the claim. A 30-day wait period is appropriate for most issues.
Sorry to burst your bubble, but only checking your Reimbursement report in your Seller Central account just isn’t enough. This report only shows you the claims that you have already submitted and the ones that Amazon is in the process of reimbursing you for. To really protect your profits, you need to ensure that your account is monitored regularly, by you or someone else.
Choosing a service with no upfront costs is the best fit for a majority of sellers
While all of the above options are valid for different sellers, the solution that wins out amongst the vast majority of sellers is to use a service that doesn’t charge you up front.
Unlike with a software product or even an assistant, you’ll be paying the same amount up front regardless of results. However, with a service that has no monthly fees, you’re only charged a commission for any reimbursement that they get on your behalf.
Other than the payment structure, the other win here is of course that you don’t have to spend hours every week crawling through the 6+ reports required for reconciliation.
What to look for in an FBA reimbursement solution
When choosing a reimbursement solution, make sure that the service has these key features:
They wait an appropriate amount of time before submitting a claim (to allow Amazon to reimburse you first)
The company won’t charge you a commission for claims that you submit yourself (or, of course, that Amazon automatically reimburses you for)
They use software to find more errors than the human eye
The don’t use software to submit claims, and instead has human auditing for validating and then submitting claims
Coverage is offered for both common and uncommon case types
FBA reimbursements are absolutely something that you as a business owner need to take care of. Fortunately, you don’t need this task to swallow your weekly to-do list. Sellers who add an extra layer of protection (above the level of reimbursement that Amazon automatically handles) are awarded anywhere from a few hundred to a several thousand dollars per quarter. And with profit margins being what they are, every dollar matters.
Refunds Manager helps successful sellers remain profitable on Amazon and is the only FBA refunds service that handles claims manually and personally to get you more money back from Amazon. Learn more and sign up at RefundsManager.com.
To learn more and sign up for our service with no monthly costs, visit RefundsManager.com.