Fulfillment by Amazon Lost Shipment
A few weeks ago I wrote about how IÂ leveraged Best Buy’s Black Friday in July to price match to Staples and earn huge miles on a product I could resell to breakeven or even make a slight profit. During that sale I was able to pickup 2 iPads from Staples and 1 from Best Buy. After receiving them I sent all three off to Amazon to be sold through FBA (Fullfillment by Amazon).
One thing that should be said about shipping to Amazon is that it takes time. In my case, it took about a week for this shipment to reach Amazon and show as delivered. Unfortunately once they received the package, the iPads never went into inventory on my seller console, so a few days later I emailed Amazon to inquire. They eventually responded with what I didn’t want to hear. They had lost the iPads and the package had simply vanished.
The Reimbursement
Since the tracking shows the package being delivered to them, Amazon will reimburse me for the iPads. Unfortunately, that reimbursement amount is based on their policy and not what I actually could have made from selling the iPads. As part of their response to me, I was told Amazon would be giving me $492.50 per iPad lost. Here is how they calculate that amount per their policy:
We consider several factors when determining an item’s value, including your sales history and the average FBA selling price on Amazon.
I Could Get More
Right now the cheapest price for Prime eligible iPad of the same model is going for $545.88. When calculating how much to pay me, they subtract out any fees I would have paid. On that sales price my net after fees would be about $513. So basically I am losing about $25 per iPad with the $492.50 reimbursement amount.
I did email Amazon to follow up, but they quickly reminded me that I agreed to this policy as a seller. There does seem to be an escalation process to get a higher rate, however it does say they may request invoices and more information if I go that route. I’m not sure if it will be worth the hassle.
A Slight Loss but Really a Gain
My cost on the iPads was $506.55, however I received rewards and miles that much more than offset the $14 loss per unit. Still, it would have been nice if they didn’t lose them so I could realize a small profit plus the miles. Either way, nothing to sweat about. I’m getting most of my money and I guess the bright side is I don’t have to worry about one of them being defective or getting returned.
Conclusion
I had never heard of Amazon losing someone’s shipment, however with as much as they have going on in the warehouse, it doesn’t surprise me. As a seller I now know that I will probably lose slightly with their valuation for reimbursement, however that won’t necessarily stop me from selling through them again since they really are the best game in town and the reimbursement process was really painless. Resellers out there, has this ever happened to you?
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[…] I try to vary my manufactured spending a little bit. Â My first foray into gift card reselling ended up in a disaster, so I could commiserate with Shawn from Miles to Memories bemoaning how Amazon lost his FBA shipment! […]
I just had a laptop go missing. Pay $1249.99 for it on eBay, was going to turn it around for $1389.98. They want to pay me $1032 for it. I’ve reopened the case, but I’m wondering what will happen with us.
It was Baltimore, as well.
Amazon just lost my fba shipment of ipads to Baltimore. Thank you for the article and subsequent information on requesting a higher reimbursement.
Amazon isn’t losing tablets, AZ employees are stealing them. A few years ago I sent 20 Nexus tablets to FBA and they “lost” 12 of them. It took weeks going back and forth with AZ, but they searched and miraculously found 8 of the 12, then promptly refunded me for the missing four. I’m assuming they found them in an employee’s locker or at their home since FBA theft rings are pretty popular. AZ kept insisting that I miscounted and never sent them in the shipment in the first place. Luckily I had recorded all the serials. And for my last tablet shipment I had to take pics of everything as I packed them in boxes. What a PITA, and never again. Anything you have high value electronics the chance for fraud with FBA is huge.
I also sent in some prepaid $10 phones to FBA and a few buyers returned their broken phones and kept my new phones. Serials did not match. Even the boxes were not what I sent so my SKU label wasn’t on them, but AZ refused to credit me or do anything about it.
I wish they would lose some of the crap I have sitting, not moving. At least then I could get something out of those items. Lesson learned, not everything from a Sears deal is a gold nugget. I’ve never had Amazon lose anything, yet. Knock on wood (for items of value).
I sell on Amazon full-time and like others mentioned, they lose or damage something on nearly every shipment I send in. Usually, I’m happy with the reimbursement even if the gain is a little less. It’s like a flash sell lol. Although
they do find things eventually.
Now I may be doing the math incorrectly, but I think you’re not losing as much as you think. The referral fee for consumer electronics is 8%. So $545.88 *. 92 = $502.21. A loss of $9.71 each. Granted, that still sucks. Since it’s over $300 it’s a zero-fee fulfilment.
If you haven’t already, I’d definitely try to negotiate with them. It’s like a recon lol you’ve already taken the hit, so it can’t get worse to ask them.
I have been travel hacking for two years and started reselling via FBA when I read about the many opportunities to leverage portals for cheap inventory. I have had a surprising amount of “stranded ” inventory and lost inventory but in all cases Amazon has been able to fix to my satisfaction. I had the same situation as you did about and when I argued my case they raised the reimbursement. Personally, I saw it as a win and worth my time since it was an instant sell and I got my money back to reinvest. I echo the other comment that the responsibility is on you to track everything in great detail, but the benefits of selling on Amazon far outweigh the issues like this, IMHO.
Thanks for the great content by the way – keep up the posts especially on the reselling!
Thanks Mayne. I think I am going to challenge the value and see if I can get them to raise it. I will agree that Amazon generally responds fairly quickly which makes them very easy to deal with.
That has happened to me recently on 3 items. The first time, when i noticed it, they responded that it seems to have gone missing at some point and that if it doesn’t get found after 30 days, they will reimburse me for it. How did you achieve reimbursement so quickly? What channel did you use to bring it to their attention?
I contacted them via the normal channels and they said they would open up an investigation. Two days later I was told of the reimbursement and the money has already been distributed. I’m not sure why it would be any different than your experience but I didn’t do anything special as far as I know.
You might want to sit down for this, Shawn, but those tablets weren’t really lost, in the sense nobody knows where they went. Some nice Amazon warehouse worker drove them out to the country and they are living happily on a farm, just like that dog you had when you were the first grade.
As long as they have a nice long life. (And I get my money.) 🙂
This actually happens to me about 30% of the time. It’s an instant sale to Amazon at a lower rate. Sometimes they lose 1 and credit for 2. Totally psycho math. Not complaining but it’s hard to do business with them.
I am surprised it happens so often. You would think someone would realize how much money they are losing.
How much, in $, do you value 1 minute of your time when doing this?
Good point. Other ways to ms that are less agonizing time consuming.
My general rule is $100 in profit (including rewards + points) per hour, although I generally achieve higher than that. For this, it took me about 30 minutes total between ordering and shipping to them and another maybe 10 minutes of follow up. I’ll still come out ahead because of the 5X on Ink plus 5% in Staples Rewards.
Amazon just “lost” one of the ipads I sent them in the last two weeks as well. It was the Baltimore fulfillment center. I think someone there has sticky fingers.
That is the one I sent mine to as well!
Baltimore is a new center and it would not be unusual to have a higher rate of losses. Last Fall, Amazon had constant lost shipments with a new center that had just opened out West.
I have been selling FBA for five years and the amount of lost inventory has been very low (<1%). The reimbursement rate is sometimes higher than expected, sometimes lower. I would be content with the deal you got, electronics have high return rate and avoiding those possible complications has some value. By all means, ask for more, but any quick sale is good. Reduces the uncertainty!
Folks should take note that it's not all magic, you need to follow your shipments and check into inventory that appears lost.
So, for me this seems clear as day, but ,for those that are offering that there’s something nefarious, or sticky fingers happening: I’d offer that it is likely that Amazon is not really be losing all of these products, in the idea that they just go “poof”, rather, for many of those that commingle their inventory, don’t need to put stickers on them. So, once an iPad for example, gets out of the box it was shipped in, there’s no way to tell whether that iPad was sent from Shawn, Bill, Bob, or Apple. I suspect that for those products that Amazon sells anyway, that when this happens, they just accept it into Amazon’s inventory, and pay the FBA seller.
I would be curious if there are folks that use non-commingled inventory and what their experience is, as I understand all products to require a label.
I have not used commingled in the five years with FBA. The stock that has been lost was labelled as mine.
Anyone who has seen an Amazon warehouse can imagine the logistics involved. Shrinkage is minimal, you are likely correct about the items just being misplaced. Amazon isn’t dying to buy our merchandise at near retail prices!
Good point and I highly doubt Amazon is doing this as a business strategy. They can acquire iPads from Apple for cheaper than their cost to pay me, so why would they purposely steal my product. What you said makes perfect sense since I am sure Amazon doesn’t make it easy for employees to take anything out of the warehouse.
I’ve been selling toys and games full time for almost 10 years, and in that time they have lost maybe 10 toys. I send in my first shipment with tablets and they “lose” over half of them. These are employees stealing, plain and simple. Google “Amazon theft ring” and open your eyes.
Amazon loses shipments all the time. I’m a small-time reseller and in the last month they have lost one entire shipment and two items from a different shipment. The month before they lost another entire shipment, but later found it and took back my reimbursement. Based on my limited experience, I’d guess they lose about 5% of the stuff you send them.
Their reimbursement rate was a little less than I think I would have received on some of the items and better than I expected on a couple of items. Overall, it was pretty close to what I expected to get. Since I don’t have to wait around for the items to sell I don’t mind Amazon losing my products.
It is crazy that they lose so much. It has to be costing them a ton of money. Someone at the warehouses is getting rich!
They clearly have a major shrinkage issue on their hands. This will ultimately drive customers away from their business and has to be biting chunks off their bottom line. I doubt it’s anything sinister at the top. Based on the chaos in other areas, sounds like they are having a hard time scaling with the demand from the huge trend in retail arbitrage.
I traded in an old iPad to Amazon. I rated it as excellent condition because it was. It lived it’s entire career in an Otterbox Defender and was unblemished. They received it and claimed it was scratched and that’s the amount they paid me. Will not use them again.
Shawn,
did u send them in one single shipment to 1 warehouse or separate ones. (Individual pack or Case pack). Did they ever went into Reserved?
Would have made more on ebay.
I used FBA for a while. I found a ton of AppleCare that was heavily discounted (think 75% off sticker, plus another 75% off of the discount price, long story). They lost at least 5 of my AppleCare boxes over the course of a few months. In the end I got my profit from them. If I use FBA now I keep my own spreadsheets and triple check everything.
It’s good (bad really) to hear you had trouble with them too. I’ve sent them two different shipments for FBA (Nook/ipod/ipod) and they lost all three. The most recent one was last week, sent an ipod shuffle and it disappeared. They closed the case, I reopened it and asked how they could expect me to continue to do business with them if they lost every shipment I’ve sent. Then, magically, they found my ipod “or one like it”. Sold it a couple of days ago.
I’m starting to suspect (conjecture) that they just borrow your stuff, give you a decent amount for it and sell it for full price, making up the difference.
Kinda like reselling resellers inventory?
Nonetheless, something shifty is going on..
I’m actually pretty surprised that this is your first experience with that. The 72 hour wait before you can submit a ticket to research is more agonizing.
So, my intent of the surprise comment was – that this happens a bunch, I think stvr made the comment that it happens to them roughly 30% of the time… Interesting that Oren had a similar experience with a Surface 3, although he did negotiate for a higher reimbursement price – see link: http://www.orensmoneysaver.com/2015/08/turnover-tuesdays-what-happened-to-my.html
I just saw that. I think I’ll submit for a higher price and report back. It really can’t hurt.
Funny how we both are reporting about different lost items! Also my first time having anything lost.
I would highly recommend the appeal process. They gave me the exact price it says on my invoice (before tax or any discounts. Quick and painless. Good luck!
I guess I have just been lucky. Don’t get me wrong I am not a power seller, but I have sold a decent amount now and this is the first time I have run into this. It shocks me how often it seems to happen.
Amazon sucks as a seller. They have a history of delaying your payments for 180 days if they suspect you’re doing something illegal. They accused me of selling counterfeit phone cases. I got them from Best Buy on special deal.
Their reason was because I was selling them too fast and at a better price. I had a 100 % satisfaction rate. I didn’t have the BB receipts so I couldn’t appeal. Do a search and you’ll find this happens to sellers of many different types of products.
I went to Ebay and did very well.
I’ve only been reselling a few months & just received reimbursement for my third lost package from them (I don’t do huge volume either). They did subsequently find one box of lost inventory & took back the money they had reimbursed, so that’s a consideration point as well. I just got reimbursed yesterday for two lost MacBook Airs. I’m hoping they show up bc I wanted the higher sales price! Oh well.
When reselling, are you able to list your products at new or do you have to list in Used – Like New condition? I’m looking to get back into reselling (I did this in college for beer money), but when I went to list a camera (which is new in box), the only option I have to sell is Used – Like New. – Thanks
It depends on the product. Most products can be sold as new, but sometimes Amazon has a contract with the vendor and they won’t allow it. Most Samsung products cannot be sold as new for example.