Recently, Amazon US has made another big move! This time it is an update to the FBA inventory compensation policy, which directly broke the defense of many sellers.

Starting from March 10, 2025, Amazon has made it clear that for inventory lost or damaged before customers place an order, the compensation standard will change from compensation based on sales price to compensation based on manufacturing cost!

The difference between these two words makes a big difference for sellers! The "manufacturing cost" here refers to the cost of the seller to purchase the goods, including the cost of purchasing from manufacturers, wholesalers or distributors, or the cost of producing by themselves, but does not include other costs such as shipping, handling fees, tariffs, etc.

Sellers should pay attention to the core changes of the new policy!

1. Two cost calculation methods

Sellers have two options:

Provide the cost yourself: You need to upload relevant supporting documents such as purchase invoices and logistics bills;

Amazon estimated cost: The platform will give a cost estimate based on the historical selling prices of similar products, wholesale data, etc.

2. New tools are coming soon

In order to allow sellers to update their manufacturing costs, Amazon will launch a page called "Manage Your Manufacturing Costs" in the background. The button has appeared, but it is currently inaccessible. It is expected to be officially opened in mid-to-late January.

3. Compensation mechanism remains unchanged

Amazon will still automatically handle the compensation process for lost items in the warehouse, and sellers do not need to submit an application. However, the compensation amount is based on the "manufacturing cost" rather than the sales price.

4. Only affects the buyer’s losses before placing an order

After the buyer places an order, the compensation for lost or damaged goods is still calculated based on the sales price of the original order. However, for losses before the buyer places an order, new compensation rules will be implemented.

5. Conclusion

In the future, if the seller does not provide proof of manufacturing costs, Amazon will directly use the platform’s estimated value. If your product sells for $100, but the platform estimates the cost to be only $20, then the compensation amount will only be $20!

Many sellers complained bitterly about this policy: "The goods were lost in your warehouse, but the compensation is not enough to cover our costs?"

Where is the contradiction?

The cost is much more than the manufacturing price!

In addition to manufacturing costs, sellers also have to pay a series of hidden expenses such as transportation fees, storage fees, labeling fees, processing fees, etc. These costs are all taken into consideration when sellers set prices, and compensating for manufacturing costs alone cannot make up for the actual losses!

The chain reaction is even more deadly!

Loss of inventory may lead to a stock-out crisis, which directly leads to:

Product keyword rankings drop;

Loss of organic traffic and sales;

Restoring rankings requires additional advertising expenses;

Low inventory costs and increased risk of potential unsalable goods;

Increased management costs for the operations team.

The hidden cost of transparency

Some sellers also worry about:

After the costs are transparent, Amazon may ask sellers to lower their prices and compress their profit margins;

There is a potential conflict of interest as to whether Amazon could be "deliberately losing items" and then reselling the products with low-cost compensation.

How should sellers respond?

1. Keep complete purchase records

Including purchase invoices, logistics documents, order details, etc., to ensure that evidence can be provided quickly if a claim is required.

2. Use inventory management tools

ERP systems or inventory management software can help track inventory changes in real time, avoid consequences such as unsold goods and fines due to lost items, and improve claims efficiency.

3. Regularly monitor policy updates

Amazon policies change frequently, so pay attention to official announcements to avoid pitfalls!

4. Consider the overall operational strategy

For high-value products, choose a more cautious FBA model;

Put more effort into supply chain optimization to reduce losses caused by a single lost item.

On the surface, the new compensation policy is a "reasonable adjustment", but behind it is a further reduction in sellers' costs! Instead of passively taking a beating, it is better to take the initiative and protect your profits with more refined operations!

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