Sellers who spend long hours handcrafting items from moderately-priced materials may be among the biggest losers of Amazon’s new FBA reimbursement policy that will change how it reimburses sellers who use its fulfillment service. On March 5th, a moderator told sellers it’s still working on guidelines for the Handmade community.
The new FBA Reimbursement policy was announced late last year when Amazon told FBA sellers that for inventory in its warehouses lost or damaged prior to a customer order, “we’ll reimburse you based on the product manufacturing cost of the affected inventory.” Amazon went on to explain, “”Manufacturing cost” means your cost to source a product from a manufacturer, wholesaler, reseller, or produce the item if you are the manufacturer. It excludes costs such as shipping, handling, customs duties, or other costs.”
Amazon delayed implementation of the policy, originally set to take effect on March 10, telling sellers on March 3rd it was delaying the policy until March 31st.
In a March 5th “Ask Amazon” event with the Handmade Business Team, Amazon fielded questions from sellers. One asked the following question:
“Can you provide us any guidance on what we are supposed to do with the new FBA reimbursement policy as handmade sellers? The estimates they are providing are based on the assumption that we are importing our items, not making them ourselves, so they are very low. How best to dispute these assumed prices without getting shut down by bots saying that our base costs are too expensive?”
A moderator provided the following response from the Handmade partner team:
“The new reimbursement policy for FBA is indeed recent, and we’re still working on tailoring the guidelines for our valued Handmade community. Please know that we’re actively working on this. As soon as we have clear, detailed information about what documents Handmade Sellers can share or submit, our Handmade team will promptly communicate this through all our usual channels. We appreciate your patience and understanding during this transition period.”
The new policy has been received poorly by sellers of many types of goods because it requires them to either trust Amazon will set a fair manufacturing cost or else supply the company with proprietary and confidential information they fear it will use to compete with them.