Top Reasons You Should Perform an Amazon FBA Audit

When was the last time you performed an Amazon FBA audit on your account? It’s a critical component of your FBA or wholesale account that contributes to the overall health and success of your FBA Business.

Amazon holds inventory for third-party sellers, picks, packages, and ships orders to customers and ensures that your products are Prime-eligible. It is a fantastic way to manage your inventory.

It’s estimated that between 97-99% of inventory gets to where it needs to go or is handled by Amazon through reimbursement. This is an amazing success rate, which is part of the reason for Amazon’s widespread success. Any logistics company in the world would be happy to have that level of success and oversight.

However, this does mean that there still is about a 1-3% discrepancy rate. Why does this happen and what does it mean for you as a seller? Let’s take a look at the potential discrepancies that happen when using FBA, and the top reasons why you should perform a routine Amazon FBA audit.

Reason 1: Inventory Goes Missing

In an operation the size of Amazon, sometimes a few items may go missing. One of the main times this happens is when your inventory arrives at the fulfillment center. Miscounts and other forms of human error can happen and your inventory can be misrepresented in Amazon’s systems from the get-go. It’s important to ensure that your inventory is represented correctly in Seller Central and that all of your documentation is presented accurately so that you can obtain the reimbursements you’re owed.

Once your FBA inventory is inside the fulfillment centers, it can also get lost inside the warehouses during the pick and packaging phase for customer orders. For these types of lost FBA inventory, you are entitled to get an FBA reimbursement.

Performing a routine Amazon FBA audit will help account for your FBA inventory and keep things balancing and running smoothly.

Reason 2: Inventory Gets Damaged

Though most of us will never set foot in an FBA warehouse, many of us have seen pictures of the immense spaces filled with inventory, automated picking & sorting machines, and humans. In such a huge space with so many moving parts, it’s no surprise that sometimes inventory gets damaged or destroyed. When this happens to your products it’s important to know, so that you can make sure you’re reimbursed.

Reason 3: Packaging and Shipping Sizing Discrepancies

Amazon uses a pick and package fee structure that’s based on size and weight.  Something as simple as miscalculated dimensions can cause additional charges to you as a seller. It’s important to perform an Amazon FBA audit for this discrepancy every 90 days, as this is the length of time you have to claim reimbursement for this issue.

Reason 4: Your Products Are Worth More than Just the Price You Paid for Them

An Amazon FBA Audit is one of the most important things you can do for yourself as a seller because if you don’t you can be doubly affected.

When Amazon reimburses you for a damaged, lost, or defective product it is effectively ‘purchasing’ the missing item from you. If you aren’t compensated you miss out on the ability to sell that item at a profit.

Typically sellers include profit margins built into their pricing. If they don’t get reimbursement from Amazon, not only are they out the cost of the inventory, but then they cannot make a profit from the sale of that product. Sellers may not realize that Amazon pays FBA reimbursements based on the retail value of a seller’s product.

An Amazon FBA audit helps Amazon sellers optimize their profit margins.

Reason 5: 1-3% of Your Total Sales Can Be A Lot of Money

If you are selling a million dollars worth of inventory a year, 1-3% is equal to 10k-30K. If you’re a smaller seller, you can still be out thousands of dollars. Think about what a difference that 1-3% can make in your overall business and profit margins. You could reinvest it in new products, keyword research, moving into new international Amazon markets, or any number of other things that can help you grow your eCommerce business.

So How Do You Perform an Amazon FBA Audit?

Now that you know the reasons you need to audit your Amazon account, how do you do it? You have to make sure that you take all of the potential discrepancies listed above into account. This means looking through multiple reports. As a seller, you know how many reports Amazon sends out. It can be overwhelming, but it’s important to look at each bit of data and cross-reference it with your records.

Once you’ve figured out the discrepancies, you’ll have to send in a claim to Amazon.  As mentioned above the timeline for claims varies. The majority of FBA reimbursement claims are allowed for the previous 18 months, so it’s best to look back into your data for that entire period.

Several different Amazon departments deal with FBA reimbursements, depending on which part of the logistic process the inventory was affected by. Claims may have to go to Shipment to Amazon, Fulfilment center operations, FBA customer returns, or Removals. It’s important to submit the claim, with documentation of the discrepancies, to the correct department or it will be rejected. Note also, that Amazon will likely push back on your Amazon claim and may ask for additional documentation. This is a normal part of the process, though unfortunately can be time-consuming.

Is All of the Work in an Amazon FBA Audit worth it?

So you might be thinking, this sounds like a lot of work, is it worth it?! The answer is yes! Leaving money on the table when you are growing your own business is always a bad idea. Cash flow becomes difficult to navigate for any size seller and it’s a big reason businesses fail so quickly.

To get the FBA reimbursements they’re owed, many sellers will sign up with a professional FBA reimbursement service like GETIDA.

When you sign up for free with GETIDA, they will perform an Amazon FBA audit going over the last 18 months of transactions in search of every possible type of discrepancy. They will only take a finders fee from any Amazon FBA reimbursement they successfully retrieve for you. GETIDA is a fully functioning solution and will take care of your Amazon FBA audit and Amazon claims from beginning to end.

Sign up today and get $400 in Free FBA Reimbursements with GETIDA.