As an Amazon FBA seller, you know the revenue and profit possibilities available on the platform. Still, you also know how easy it is to see your revenue eroded away by the costs of storage, shipping, referrals, and other fees that add up to a giant bill for FBA services.
There are different ways you might be losing money that you aren’t even aware of. Lost or mishandled merchandise can put a massive dent in your profit margins. While mistakes happen and sharing some of the wealth with Amazon is part of the bargain, it can be frustrating when you aren’t sure if you might be paying more and getting less than you should be.
Where You Might Be Losing Money as Amazon FBA Seller
Most Amazon FBA Seller don’t have the time to look closely at where their fees are going and what they are paying for. In the day to day of running an FBA business, there are countless details to consider, and looking into the justification behind every fee doesn’t seem possible. The worst news is that Amazon does, on occasion, make mistakes. Since most sellers are not looking closely at the reports, those mistakes can cost you money.
The beauty of Amazon FBA is that you don’t have to worry about shipment and warehousing. Unfortunately, though, that means it is also out of your control if something goes wrong. You may know exactly how many units were shipped to Amazon but see a difference in your inventory. What happened? Could it have been an issue with the carrier? Was something damaged and not noted? Did some units get misplaced or get lost in the check-in process? Was a return correctly processed? Or, did somewhere along the way, some of your units just get placed into another seller’s bin? Losing a couple of units here or there may seem like part of the price of doing business. But this can seriously add up and take a big chunk of your profits.
Amazon FBA Fee & Storage Overcharges
If you know the precise size and weight of your product, you can easily calculate the cost of FBA Fees. Unfortunately, it isn’t that simple. Amazon doesn’t take the seller’s word on the size and weight of a product. It goes through Amazon’s own Cubiscan to get the precise dimensions. This seems fair except that even a minor dimensional difference, even something as simple as an irregularity in a box, can make a major difference in the FBA Fee Charge. This is due to Amazons tricky product tier structure.
What makes this hard to catch is that without any notice Amazon randomly remeasures products in their warehouses. Therefore, at any given moment you may be getting overcharged and this overcharge is happening on every single order.
Reimbursements: Getting Your Money Back
Fortunately, Amazon has a process for working out these discrepancies. It is just a matter of tracking everything, finding issues, opening cases in Seller Central, submitting proofs, and getting reimbursed. That sounds pretty simple. However, actually getting that done is a lot more complicated, especially when Amazon pushes back 4-5 times per claim and sellers can have hundreds of cases to open each month.
To understand the best approach to reimbursements, we should first look at the common strategies used by sellers. One or more of these may describe how you currently handle reimbursement. Or, if you have yet to take a systematic approach to the issues, you may see one that looks most appropriate. But keep reading. There is another alternative.
The Manual Approach
The manual approach is exactly what it sounds like. For individual sellers, this is the tedious process of searching through all the transactions and fees, looking for errors, and initiating the reimbursement process. If done well, this could be the most accurate since each claim would be verified and reviewed by hand before submitting. But that makes a lot of assumptions. It assumes that the person or people doing the work are properly trained. It also assumes they have the time and determination to follow through the inevitable pushback from Amazon. Imagine investing all of the time and effort to turn in an accurate claim but then not receiving anything due to a lack of time or the know-how to respond properly.
Hiring Virtual Assistants
To avoid spending valuable time during the week auditing Amazon’s discrepancies some sellers hire trained virtual assistants to manage the process for them. These sellers either learn to download a few of the necessary reports or use reporting tools like Helium 10 to provide you with the data.
This can definitely save time when it comes to preparation. However, that will only cover very few case types and leave the most valuable reimbursements in Amazon’s pocket.
Virtual assistants are key in this process and we believe in them completely. However, a VA is only as good as the system built around them.
You will need to provide:
- Extensive training to deal with the different Amazon responses.
- A tracking system to manage the status of each claim.
- Regularly updated SOP’s for each case type. (Which Amazon changes frequently)
- A centralized location where you store and update all product information and tracking info.
Without this setup, your VA will not recover a fraction of the $ out there.
You will find yourself spending much more time than you think and you will be paying by the hour.
Third-Party Services for Amazon FBA Seller
Sellers who simply want someone else to take care of tracking fees and initiating reimbursement claims may be attracted to enlisting an agency. This approach hands off the entire process to someone else. They can help you win more cases than you’ll ever win on your own.
This, in theory, saves the seller time but, at the cost of accuracy and transparency.
Many of these agencies promote their ability to get the work done with no input from the seller. However, this leaves out many case types like FBA Fees and Storage fees. Without monitoring these categories you can have major leakage in your profits.
Additionally, without your involvement, the agency has no way of backing reimbursement claims with proof since they don’t have any. Only the seller would have these necessary pieces of documentation.
Without Amazon all the required documentation. Without the needed documents 60% of reimbursements are left behind.
While these agencies promise to take care of follow up, big agencies with thousands of clients simply can’t keep up with Amazon’s pushback as they can go back and forth 3-5 times. Claims get dropped, they expire and sellers lose out on money.
Amazon FBA Seller – The Bottom Line
It seems like there are no good options.
I am either going to be spending too much time trying to do this manually myself or with a VA. This would be incredibly accurate but at the cost of my time.
I am leaving a lot of money on the table in missed categories and expired cases when hiring a third party. But I am saving the time to spend on growing my business.
How can we get the best of both worlds?
How can we get the results of manual efforts without spending the actual time doing the work.
The Seller Locker Difference
For a long time, there wasn’t a better option. Sellers had to choose between the two saving time or maximizing recoveries.
What we did at Seller Locker was break down the entire reimbursement process into many small parts.
We then put together the ideal solution for each reimbursement category.
Next, we went crazy building tools and automations for every part of the process.
Our goal was to build a tool that can do all the heavy lifting, give sellers the transparency they were looking for and give them back their time.
Today, the software has robust features that have taken all the challenges of the past and put them to rest.
For example, instead of needing to spend 15-20 minutes reading, understanding, and crafting a response to Amazon’s pushback. Our tool has the functionality to respond to Amazon’s claims with just one click. On the spot, using both machine learning and our experience in the field our responding tool will craft the perfect response to disprove amazon using its own policies and take your claim to the next level.
Leveraging technology allowed us to take the most time-consuming tasks and turn them into a few clicks.
We then hired 20+ virtual assistants and trained them to use our software.
Now the VAs have the tools to maximize the reimbursement process for sellers and give each and every claim the attention it deserves.
The tool does all the thinking, they just need to follow the steps.
This perfect combination of software + service is why we are trusted by over 4000+ sellers and currently recovering millions of dollars a month for our sellers.
The biggest sellers on Amazon trust Seller Locker to audit their accounts as we are the only solution with the tools needed to do the work properly and bring home the wins.
Do a Seller Locker Audit Today
You don’t know what you are missing until you give it a try. Whether you are trusting a 3rd party or doing the work on your own. It’s important to see just how much is sitting there in forgotten claims or overlooked categories.
An account audit is commitment-free. We will run numbers, present the data to you, and let you decide what the next steps are.