Amazon FBA compensation policy update! Sellers: It’s too outrageous

There are too many cross-border logistics problems!

The peak sales season for cross-border e-commerce is still underway. As the Christmas promotion approaches, Amazon warehouse workers began to strike, affecting several FBA warehouses, which made the already pessimistic FBA logistics "worse".

According to feedback, FBA has been experiencing problems such as slow delivery, long transit time, and lost items. Faced with more and more claims from sellers for lost items, Amazon has updated its FBA inventory compensation policy...

Amazon FBA inventory compensation policy updated, compensation based on cost price

Some time ago, Amazon updated its FBA policy, providing automatic compensation for goods lost in the fulfillment center starting January 15, 2025, which means that sellers can get compensation without submitting a claim. Recently, Amazon has once again updated its FBA inventory compensation policy, the details of which are as follows:

Starting March 10, 2025, the platform will compensate sellers based on the manufacturing cost of the affected inventory. Sellers can determine the manufacturing cost of the goods in two ways:

The first is that the seller provides the manufacturing cost directly.

The second is that the platform provides sellers with a manufacturing cost estimate. This estimate is based on a comprehensive assessment of comparable products sold on Amazon, other sellers, and wholesale channels.

It is worth noting that "manufacturing cost" refers to the cost of purchasing goods from manufacturers/wholesalers/distributors. If the seller does not actively provide their own cost, the platform will automatically apply the estimated value to compensate the seller. Starting in late January 2025, sellers can use the new "Manage Your Manufacturing Costs" page to view and manage manufacturing costs in the Inventory Defect and Compensation Portal.

To briefly summarize the latest FBA policy, Amazon will automatically compensate for lost or damaged inventory, but the amount of compensation is the cost price of the goods.

After the news came out, there was no doubt that Amazon sellers were criticizing it.

Sellers generally believe that Amazon only compensates the cost price when the product is lost, which is outrageous! Because the product was lost in the Amazon FBA warehouse, it is 100% the platform's fault. Amazon should take the initiative to provide compensation to the seller, but Amazon only wants to compensate the manufacturing cost of the product, which is far lower than the actual cost and obviously cannot cover the seller's cost expenditure.

As we all know, sellers need to pay a series of fees from product production to delivery to Amazon warehouses, such as product manufacturing costs, item preparation costs (labeling, packaging, processing fees), delivery costs to Amazon, warehouse storage fees, etc. These costs are an important reason why sellers increase prices when selling goods.

In addition, the loss of sellers' products will lead to a series of vicious cycles: the loss of products will lead to out-of-stock, the natural ranking will drop, the seller's sales and profits will be damaged, and the seller will have to spend money and time again to regain the natural ranking of related keywords; the loss of products will lead to insufficient inventory, and the seller will have to pay Amazon additional fees such as low inventory fees ...

"Amazon only reimburses manufacturing costs, which means sellers are openly paying for their mistakes! This is extremely unreasonable and unfair to sellers." An old Amazon player bluntly stated that this is the most unfair policy he has encountered in his more than 10 years of working at Amazon.

Many veteran sellers said they had expected this update to the FBA inventory compensation policy. Not long ago, Amazon announced that it would not increase sales commissions and Amazon logistics fees in 2025, nor would it introduce new fee types; it would also reduce some fees and provide additional discounts to support the growth of new products. At the time, some sellers had predicted that although the platform would not increase fees for sellers in 2025, it would make more money from sellers in some way...

FBA warehouses continue to explode! Many warehouses are no longer available

In recent years, Amazon has been constantly updating its FBA policies. Compared with previous years, FBA fees have increased significantly, but it seems that the quality and level of FBA services have not increased accordingly, but have decreased instead.

For example, since the beginning of this year, there have been an unusually high number of lost items at Amazon’s FBA warehouses. Faced with waves of legitimate claims, the platform has directly revised its compensation policy, reducing the amount of compensation to cost price. In addition, the problem of FBA warehouse explosions has also intensified.

Recently, Amazon sellers received a warning when building warehouses: Due to abnormally high demand during the holiday season and limited appointments, some operations centers are currently unable to receive goods from December 15 to December 31.

This news caused widespread panic, and the industry later explained that during this period, shipments that have not yet been created will most likely not be accepted, but Amazon will still accept shipments that have already been created and are in transit (estimated delivery period is between 12.15 and 1.1). Some sellers were comforted, but this warning once again pushed the old-fashioned FBA warehouse explosion problem to the center of the topic.

This year, Amazon FBA is extremely weak. Whether it is the off-season or the peak season, there has been almost no end to the complaints about FBA warehouse explosions. At the end of the year, it is inevitable to face the crisis of warehouse explosions. A group of Amazon sellers have been "suffering from a shortage of stock for a long time"!

People familiar with the matter revealed that many Amazon warehouses have stopped releasing appointments due to severe overcrowding, such as IND9 , MDW2 , MQJ1 , RFD2 , LBE1 , LAN2 , LAS1 , LGB8 , LAX9 , SMF3 , GYR3 , JOT1 , QXY5 , VGT2 , GEU5 , GEU2 , MIT2 and other warehouses; the rejection rate of warehouses such as SNA4 and MCO2 is as high as 90%; appointments for warehouses such as SCK4 , MCE1 , BWI4 , SLC2 , MGE3 , JAX3 , CHA2 , DET2 , ORD2 , CMH3 , MCO2 have been postponed, and the earliest appointment time for some of them is as early as mid-January 2025.

Along with the explosion of Amazon warehouses, problems such as slow receiving, slow listing, slow transportation, and lost goods have erupted one after another ↓↓↓

Recently, I have to wait half a month to receive the shipment.

A shipment was originally scheduled to be delivered to LBA4 warehouse at the end of November , but it is still showing as in transit.

It took 84 days for the goods to be put on the shelves at the European XPO1 warehouse . The timeliness is amazing.

Due to the long waiting time , a product has been out of stock for half a month

The product was being sold but the available quantity suddenly dropped to 0 and was transferred away.

…

It can be observed that this year, there are many voices criticizing the slow shipping of Amazon FBA. Many sellers' goods were originally selling well, but suddenly they were shipped away, which greatly affected the conversion rate. It is understood that many products on the Amazon platform now display the words "May arrive after Christmas". Consumers who see such words are likely to give up buying directly.

"Troops come one after another, it's really annoying!" Just as the Christmas sale is approaching, the Amazon FBA strike has come again.

According to foreign media reports, thousands of Amazon workers will walk off the job a few days before Christmas just to get better working conditions and higher wages. This strike is also the first large-scale strike by American workers against Amazon.

The International Brotherhood of Teamsters said that union workers in factories in New York City, Skokie, Illinois, Atlanta, San Francisco and Southern California will participate in the strike, and several Amazon warehouses such as JFK8 and DBK4 may temporarily face the risk of delivery interruptions.

All these circumstances indicate that Amazon is a business with high costs and many unexpected events, which puts an extra test on sellers’ inventory preparation and operational capabilities.

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