Amazon’s FBA Reimbursement Shake-Up: Sellers Face Profit Losses in 2025

Amazon’s Fulfillment by Amazon (FBA) program has long been a cornerstone for many e-commerce sellers. However, a significant policy change effective March 31, 2025, has altered the reimbursement landscape, potentially impacting sellers’ profitability.

🔄 From Sales Price to Manufacturing Cost

Previously, Amazon reimbursed sellers for lost or damaged inventory based on the item’s sales price, minus applicable fees. This approach often allowed sellers to recover a substantial portion of their potential revenue.

Under the new policy, reimbursements are calculated based on the product’s manufacturing cost. Amazon defines this as the cost to source the product from a manufacturer, wholesaler, or reseller, or the cost to produce it if you’re the manufacturer. Notably, this excludes expenses like shipping, handling, customs duties, and other related costs.

This shift means that if an item is lost or damaged before a customer order—such as during inbound shipment or while in Amazon’s fulfillment centers—sellers will receive a reimbursement that reflects only the manufacturing cost, which is often significantly lower than the sales price.

🧾 Providing Your Manufacturing Costs

Amazon offers sellers two options for determining manufacturing costs:

1. Amazon’s Estimate: Based on comparable products sold by Amazon and other sellers.
2. Seller-Provided Costs: Sellers can input their actual manufacturing costs through the “Manage Your Manufacturing Cost” page in the Inventory Defect and Reimbursement portal.

Providing accurate manufacturing costs is crucial, as Amazon’s estimates may undervalue your products, leading to lower reimbursements.

⏳ Reduced Claim Filing Window

The policy change also brings a significant reduction in the claim filing window. Sellers now have:

• 60 days to file claims for fulfillment center operations issues.
• 45-105 days for FBA customer returns claims.
• 15-75 days for removal claims related to items lost in transit.

This shortened timeframe necessitates increased vigilance in tracking inventory discrepancies and filing claims promptly.

📉 Impact on Sellers

The transition to manufacturing cost-based reimbursements can significantly reduce the compensation sellers receive for lost or damaged inventory. For example, an item with a sales price of £30 but a manufacturing cost of £5 would now yield a £5 reimbursement instead of a figure closer to the sales price.

This change disproportionately affects sellers of high-margin or collectible items, where the manufacturing cost is a small fraction of the sales price.

🛡️ Strategies to Mitigate Impact

To navigate this policy change, sellers should consider the following strategies:

• Accurate Cost Documentation: Maintain detailed records of manufacturing costs, including invoices and proof of purchase, to provide to Amazon when necessary.
• Inventory Management: Implement robust inventory tracking systems to quickly identify and address discrepancies.
• Insurance: Explore third-party insurance options to cover potential losses not fully reimbursed by Amazon.
• Diversification: Consider diversifying sales channels beyond Amazon to mitigate dependency on FBA policies.

🔚 Conclusion

Amazon’s 2025 FBA reimbursement policy marks a significant shift in how sellers are compensated for lost or damaged inventory. By understanding the changes and proactively adjusting business practices, sellers can better protect their profitability in this new landscape.

Note: For more detailed information on Amazon’s policy changes, visit the Amazon Seller Forums.