Why You Are Losing Money With Your Amazon FBA Business

Top tips on how to avoid losing money on FBA business and even how to get some reimbursements

So, Why Your Amazon Business Is Not Making Money and How to Cope With Such a Problem

1. You lose the Amazon Buy Box

Oh no, you never should lose the Buy Box, because the Buy Box accounts for more than 90 percent of all Amazon sales, losing it means losing sales! You most probably know that the “Buy Box” is the more well-known term for the Amazon “Add to Cart” field, right? No worries, if you don’t know much about BuyBox, we explain in every detail what that is and how to win it here. To put it simply, the more professional you are with your business and customers, the more likely you are to win the Buy Box. At the absolute least, maintaining a high level of professionalism will ensure that you are well positioned.

However, the rules for winning the Buy Box change all the time. So, what’s the solution? What should you do?  First and foremost, keep an eye on your competition so you may set a competitive price. It's quite difficult to update prices manually, so we recommend getting an automated repricing tool that will do all the dirty work for you and save you time.

Secondly, increase your seller metrics, because your reputation as a seller defines your level of trustworthiness. The higher your ranking, the greater your chances of winning the Buy Box are.

2. You Don’t Have Enough Good Reviews on Amazon

Amazon has always placed a great value on customer satisfaction, and it protects the integrity and trustworthiness of its reviews using an innovative algorithm. Amazon uses reviews as one of the variables in determining a product's rating. Customers, on the other hand, read reviews before making a purchase. This indicates that positive reviews help pave the way for increased sales.

What can you do to get more positive reviews? You know, in many cases, customers are actually ready to provide a review if they are motivated in some way. Check out this article to see the ways of getting more reviews!

We have to warn you not to buy reviews! Never do this please, because buying reviews goes against Amazon’s guidelines. Not only will your bought Amazon reviews be erased, but the online retailer will also have grounds to suspend your account. Do you really need to put your business at risk?

The final point about reviews that should be made is that recently there was a wave of fake reviews on Amazon. This is usually done by competitors. Actually, it doesn’t even matter who does this if it harms your business. Having said that, customers will not buy your products if it or you as a seller has a low rating. Don’t start panicking, we have got you covered! Here is what you can do to spot and report fake reviews on Amazon.

3. You Have Low Inventory

If you're out of stock or your inventory is low, you not only lose potential sales, but you also provide your competitors an edge in terms of getting new sales and retaining customers for future purchases and reviews. That means you are losing money on your FBA business! Solution?

When you have total control over your inventory, you can see which goods are selling and which are not. You can also keep track of where your assets are and their financial value. You also prevent having an excess of goods, which might result in earnings losses. Keep in mind that Amazon charges for each item that remains in their warehouse for an extended amount of time!

4. Your Product Was Damaged

Well, you might know that from time to time items get damaged either in the warehouse or with the buyer. It doesn’t matter where, but what really matters is that Amazon disposes of the item and it is considered to be written off. Obviously, your business is losing money if that’s the case!

5. There Were Some FBA Errors With Returns

Amazon is known for its dedication to its customers. They are aware of this nowadays, and some even take advantage of it.

We can’t tell for sure whether Amazon consumers do the following on purpose, or whether it's due to human mistakes. Customers initiate a return request, and the funds are repaid before the product is ever returned. The return is held for 45 days by Amazon, and then, unfortunately, nothing happens.

Nine times out of ten sellers should get an Amazon FBA refund. But it’s never an easy process.

6. FBA Fee Calculation Error Occurred

The size and weight of the stored products are used to calculate both the storage and delivery fees for the FBA service. Excessive FBA costs will be imposed if Amazon now uses incorrect dimensions as a basis for calculation. Sellers can lose a lot of money if such FBA mistakes are taken together.

Now let’s see what you can get reimbursed for and get your money back.

What Can You Do As a Seller to Get Money Back?

Well, the legal situation is clear: any subsequent loss of value caused by Amazon must be paid by Amazon (apart from the situations when sellers lose Buy Box). The reimbursements, on the other hand, are not made automatically. In other words, it is the seller's responsibility to show proof of these losses in value and to file a claim with Amazon for reimbursement. Amazon stores the bookings in numerous reports at Seller Central, thus proving this isn't a problem.

However, that can be time-consuming. When you factor in different time zones, the length of time it will take to identify the FBA issue, and the specifics of each marketplace, the whole procedure becomes a nightmare. Moreover, all of this should, of course, be done on a regular basis. No one wants to do that every day because it is extremely time-consuming. As a result, many sellers lose money by allowing their reimbursement claims to lapse. Sounds sad, doesn’t it?

SellerLogic Lost & Found Will Come in Handy in Such Situations!

An automated solution that does the tiresome work for you: the “Lost & Found” tool analyses the data up to twelve reports and identifies the FBA errors mentioned above. Each conspicuous transaction is created as a separate process. This can be done up to 18 months retroactively. The individual cases are prepared in a way that is easy to understand and stored as a copyable template. All you have to do is open the case in Seller Central, insert the text prepared by SellerLogic, and press “send”.

Thanks to this tool, not a single one of your reimbursement claims will be lost – and all you have to invest is a minimal amount of effort. Should there however be any issues with one of your cases, SellerLogic's experienced staff will help you communicate with Amazon!

Final Thoughts

While we think that money is an indispensable resource of every entrepreneur, we also agree with Jim Rohn who said “Time is more valuable than money. You can get more money, but you cannot get more time”. So, we would advise you to automate everything you can to get more profits and time! When it comes to FBA business, losing time and money is not an option, so SellerLogic Lost&Found can get your money back, while SellerLogic Repricer will update your prices dynamically leaving your competitors behind!

Robin Bals from SellerLogic

SellerLogic’s Portfolio encompasses two dynamic tools that can be connected to your Amazon account with just a few clicks – the SellerLogic Repricer and Lost & Found. While the latter monitors your FBA processes and informs you about reimbursement claims you have against Amazon, the SellerLogic Repricer is specialized in optimizing your pricing strategy, making it infinitely scalable while remaining flexible. Both solutions enable an efficient and tidy profit maximization in the field of E-commerce – while saving the merchant time and money.
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August 19, 2022
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