#191 Are You Losing 3% of Your Inventory on Amazon? (Big Amazon Policy Change)

The world that we live in right now, your margins are being so, so, so squeezed. And it's important for sellers to audit for reimbursements. We find on average that sellers are seeing 1 to 3% of their inventory that's impacted by a discrepancy that would warrant a reimbursement.

Welcome to the High Voltage Business Builders Podcast, a show where we interview high voltage entrepreneurs growing and scaling through e-commerce, real estate, and other wealth without Wall Street ventures, showing you the path to making your first or next million. This is the High Voltage Business Builders Podcast. We are actually live. I just validated we're on LinkedIn. So hello for anybody who's watching us on LinkedIn. We're doing a live here for about the next, I don't know, 10 minutes or whatever it takes us to have this conversation. Lisa is joining me. Hey Lisa, how you doing?

Hi. So great to be here.

You're gonna be my co-host today. We're just doing this like a co-host thing. Love it. So this is part of the High Voltage Business Builders Podcast, although we're not doing a pre-scripted recording. This is actually a live. So those of you who are joining can chime in on the chat, I believe, and ask questions. Today we're gonna be speaking specifically About reimbursements.

Yes.

And what does it mean? Yeah. What does it mean in changes in reimbursement? So let's go back in time. What does reimbursement mean as a part of Amazon's business? Why don't we start there and give everybody a quick recap?

Yeah, yeah, yeah, for sure. So, hey everyone, my name is Lisa. I'm marketing and partnerships manager of GETIDA. And what essentially is a reimbursement? I think we first need to understand what a discrepancy is. So FBA reimbursements are generally triggered by filing claims for discrepancies that sellers find with their inventory. So the easiest example of this, Neil, is like you ship in 1,000 units to Amazon, they say they only received 900. Where is my extra 100 units, right?

Mm-hmm.

So that is the difference between your units expected and your units received. You're gonna file the claim with Amazon to say, hey, I think you lost some of my stuff. And Amazon is gonna do one of two things. They're either gonna say, whoops, I found your cute little travel first aid kit. In a box in the corner, so sorry. Let me reapply that to your account. Or they say, Neil, my man, I am so sorry. We have lost your product. Let me give you a reimbursement.

Does it never happen on Amazon? Does it?

Absolutely never. Never. Not once.

There's there's not tens of services that exist like a two thousand dollar thing with Amazon and losing it.

Whoops!

We lost your entire pallet.

What? Right. Yeah. Which unfortunately does happen, right? We find on average that sellers. are seeing 1 to 3% of their inventory that's impacted by a discrepancy that would warrant a reimbursement. And another question that I get a lot of times is like, what category is most affected? What warehouse has the highest discrepancy rate so I know not to ship there? Patterns like that don't exist, friends. It's just there's so much inventory flying in and out all day long that things are going to get lost.

Yeah.

I like to think of it as like, you know, Monsters, Inc. with all the doors. And they're on all the different tracks and they're flying through, you know, Monsters, Inc. warehouse. That's kind of what I see packages as at Amazon. So that's exactly what a discrepancy is, is just a difference between what the seller expected to see or what they know to be true about their product. Sometimes like weights and dimensions are, you know, incorrect in Amazon's system. So what they expect versus what Amazon shows. And then a reimbursement is just that. It's sometimes used interchangeably as refund, which can get a little messy and confusing. So we prefer reimbursement, and it's where Amazon is saying, hey, we made a mistake. We're going to make it right financially. So they will reimburse the seller the list price of their product minus the fees. So it's as though you sold the product, but you didn't have to pay the PPC to sell it. So it's like a double win, right? It's money you would have been out and you didn't have to promote it. So it's like free money back in your pocket. So that's kind of like baseline. Why does GETIDA exist?

Yeah. Absolutely. And why is the discrepancy a part of this in terms of, why does a seller need to be tracking this if they're new or even intermediate? What's the importance of this?

Your bottom line and profit margins. So like in the world that we live in right now, your margins are being so, so, so squeezed. And it's important for sellers to audit for reimbursements. From my perspective, to your point, Neil, like if they're a brand new seller, I think they need to start right away. If you're an intermediate seller, this is a perfect time. And I guess we could define like what, you know, beginning, I mean, beginner is obviously like you're launching your first product. Intermediate, I mean, new sellers are popping up all the time. I would say like a year, 2 years or younger would be like an intermediate seller. And for you to be a vet, you know, and then a vet is like you've been around for a while. Right. So like if you are just starting your business or even if you've been running it for a while, you need to look for these discrepancies and file for reimbursement so that you can get money. Back towards your bottom line because one, it's money in your pocket, and two, your reimbursements and your discrepancies can sometimes unlock for you and identify some other issues with the operations of your business, specifically when it comes to weights and dimensions. So if you are using like a poly bag for, I don't know, these passport covers, right? And the Cuba scanner is reading your product as being 2 inches bigger than it actually is, that can put you in a different size tier and get you considerably higher fees. It's gonna make your margin smaller. So it's, it tells you a lot more about your business than just like what Amazon lost, right? So I always say audit as soon as you start selling.

Agreed. Agreed. It's a great thing to get into the practice and habit of so that you don't, you know, get so far down the road. If you aren't doing it, you're gonna discover free money. Because you probably haven't been paying enough attention to these details. I know some of the case studies have been relatively large for those who are not paying attention to reimbursements and should. But what has most dramatically changed recently that's causing a bit of a shockwave in the industry with Amazon reimbursements?

Okay. So the timelines with which sellers have to file claims is changing dramatically. So at the time of this live, right, it is August 20th at 3:10 PM Eastern time, if that matters to anybody. If you were to audit your account for reimbursements for certain claim types, you can go back up to 18 months to recoup any of those potentially lost funds. Now, there are some claim types that have a shorter window, like weights and dimensions, which is only 3 months, but 3 of the big players, which are lost and damaged, removals, and returns, are shortening. So I'm going to read a little bit directly from Amazon's, uh, announcement here. So on July 24th of this year, Amazon announced that starting October 23rd, they will be updating the eligibility window policy, and the manual claims must now be submitted within the following timelines. So a fulfillment center operations claim for an item that is lost or damaged in the fulfillment center must be submitted no later than 60 days after the item was reported lost or damaged. So remember, we're now talking 60 days as opposed to 18 months. The second impact is that an Amazon, excuse me, an FBA customer returns claim must be submitted between 60 and 120 days after the customer refund or replacement date. Claims must be submitted, no, excuse me, submitted before 60 days to ensure the customer has time to return.

Interesting.

Not be submitted before 60 days to ensure that they have time to return the product, right? So between that 60 and 120, and then for removal claims, for items lost in transit, must be submitted between 15 to 75 days. So we're talking, you generally had 18 months to file for these claims, and now sellers have 2 to 4 months for 3 major claim types. And what does this mean for sellers? If you've been actively auditing your account for these discrepancies, if you've been actively filing for reimbursements or using a service like GETIDA or even using GETIDA, you're not gonna feel a whole lot of difference. Mm-hmm.

Mm-hmm.

But for sellers who haven't been, this is a lot of money that you can be missing out on.

It's a lot to miss. It's like gift cards, right? Like the gift card industry in terms of how you turn gift cards back and they turn that into free money. It's what's just made Starbank— Starbucks a star bank. Literally, it has. And it's made them all this money because people get all these gift cards and they don't use them. So Amazon basically said, oh, we figured out that not anybody is using them within a 7 to 8 month window. So let's set the new dates at like 6 months because basically that's free money for us if no one else is going to claim it. It's literally what it gets down to.

Right, exactly. And so that's, that's what we are really here today is to just, for anybody who didn't see the announcement when it came out on the 24th or saw it and thought, well, I already get emails from Amazon every once in a while, because it's interesting. They also point out that on November 1st, they will begin proactively reimbursing you for FBA items that are lost in our fulfillment centers. They've already always done that. And I wonder if maybe they're going to be, you They're using the term proactively specifically instead of doing it reactively. So I'm not exactly sure how that's gonna change the process on the backend. Yeah. But I think a lot of sellers maybe saw the announcement and they were like, well, like it's such a small percentage of my business and, you know, they already email me whenever they find an issue, so I don't need to file for claims when really this can have enormous financial impact. So—

Oh, we're talking about tens of thousands to hundreds of thousands of dollars depending upon the size and scope of your reimbursement and the number of units you're moving. Can you give us an estimate based on someone's sale? volume, if they're doing, you know, half a million, a million, $2 million or more, what could they possibly see as reimbursement money that's kind of found free money if they just go get it?

Yeah, I mean, it's 1 to 3% of your business, right? So depending on what your revenue is, depending on what the sale price of your product or how many units you're moving, that can be pretty significant. We had a seller connect to their, you know, connect their account to GETIDA, and their first reimbursement back was $40,000. And I mean, that is just huge, right? So it, it's all gonna, the, the number of like, you'll get 20 grand back, like it depends on the size of your business, right? But between 1 to 3%, and we have over a 96% success rate for those first-time claims that we're filing through. I mean, that's, that's a considerable chunk of change.

Well, if you're doing $1 million or more in sales, you can already kind of quickly do the numbers in your head and get a good idea of where you could be sitting on some cash. For order reinventory ordering.

Yes.

In August is the time we're live so that you could put it towards the holidays. Like get in there and say, oh gosh, I could get another $10,000, $20,000, $50,000 of inventory for my holidays. It's literally sitting right in front of me. That's what I would do with it. That's what we're gonna do with ours. So get in there and grab those reimbursements. So is there anything that you guys are doing to make that happen faster? Because, you know, reimbursements and time is a very costly event if you gotta spend time. going in there? What are you guys doing to help make that happen faster now that these new guidelines are in place?

Yeah, so we are changing our processes on the back end to align with what Amazon is requiring right now. What we're doing is just trying to help sellers get as much of that 18 months as we can, and we're just gonna continue to file at the most, you know, next available date once they make the change and get sellers the most back that we can. A lot of internal process changes, but we are, we are excited to see So many taking advantage of the program now so that they can set themselves up for success for Q4, like you were just saying.

Yeah, absolutely. Well, these are great. Is there a question I didn't answer yet or something you wanted to bring up that we didn't cover?

No, I don't think so. The, the only thing that I wanna bring up is that, you know, we are an entirely performance-based business, so we only get paid once the sellers get paid. You're reimbursed directly into your Seller Central account by Amazon, and then GETIDA sends you an invoice after the fact for our percentage. So it's not like we're taking your reimbursement. Pulling out our little piece and then sending it through. Totally transparent, all managed through either Seller Central or your Katita dashboard. Yeah, I believe we have a special offer through your network. They can sign up through your link, or if not, I can always extend an additional offer for anybody who wants to shoot me an email. My email is lisa@katita.com, or if you find me on LinkedIn, you can send me a DM there and I'll get that.

All right guys, so you got that. If you're on LinkedIn right now, lisa@katita.com, or go to this bottom section and comment, or if you're on Where else are we going live right now? Twitter. Everyone, X, I guess it's called Twitter now. X. What do you call this thing? X. If you're on there as well, just link in, grab that information and get over there and get your free performance. You may have some found money in the next few days that you should go after. So thanks for jamming with me on this quick live.

Of course. Yeah. Thanks for having me.

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