No A-Z Protection under FBA

Under Amazon's A-Z Guarantee program, buyers who have a problem with their order (lost in mail, damaged, not as described) can file an A-Z guarantee.

We were told this program is funded by the VCF (variable closing fee) of $1.35 per order, which comes out of the shipping/handling reimbursement.

Usually, in the case of damage or loss, if the seller can prove the item was shipped on time they are not liable for the claim, and the customer gets a refund direct from the A-Z fund.

However, with FBA, there is not A-Z protection... for the buyer or the seller! If the buyer has a problem, it is completely up to FBA staff - usually they just issue a refund, no questions asked.

But this refund is taken out of YOUR account, not the A-Z fund! We learned this the hard way. A customer ordered a $75 book, which arrived damaged. It was new when we shipped it into FBA, and FBA verified it was new when they checked it in. So the damage must have happened in the FBA warehouse, or during transit from the FBA warehouse to the customer.

Even though the damage was not our fault, they refunded the customer, did not ask them to return the book, and took the $75 out of our account. What's more, I'm pretty sure FBA uses UPS, and each shipment is automatically insured for $100. So...if this was damage during transit, why did they not file an insurance claim? If they did, why did they charge us the $75? Is it their policy to pocket the money?

Their response to this question is, "if the FBA program isn't working for you, feel free to close down your account at any time." Keep in mind, once you convert to Seller Central, you can never change back. So they're basically inviting you to close down your business if you don't care for their one-way policies.

And to make matters worse... FBA sellers still pay the VCF of $1.35 per order! What the heck? Where is this money going??? We're paying into a supposed insurance plan, why are we not insured like other sellers?


FBA "Passive" fees are not explained up front - an additional $1.00 per item on average

Here are some passive fees that FBA charges, which are not explained up front:

FBA Advertised Fees (for book fulfillment):

  • 15% normal Amazon commission
  • 50¢ fee for books under $25
  • $1.00 fee for books over $25
  • 40¢ fee per pound for shipping
  • $1.35 fee per book (variable closing fee)
  • 45¢ fee per month storage (per cubic foot)

Additional FBA Passive Fees (you must read the small print):
  • 5% restocking fee on returned items
  • 3-12¢ per item, cost of FBA labels (some books require 3 or 4 labels)
  • 30-36 ¢ per item (cost of shipping items to FBA warehouse)*
  • 25-50¢ per item storage fee (assuming 45-90 day turnaround per item)
  • 45-75¢ per item storage fee (assuming 45-90 day turnaround during 4th quarter, holiday storage fee rates)**

* Cost of shipping. Keep in mind, you have no control over which FBA warehouse is assigned to you. There are only a few FBA warehouses. We must ship our items to Reno NV, which is a remote location and expensive to ship there. Average shipment is 50 books per box / 45 pounds. Media Mail (generally the cheapest rate) is $18 in postage, or 36¢ per item.

**Additionally, most sellers underestimate FBA storage fees. Keep in mind, the rate jumps to 65 cents per foot per month during the 3 Christmas shopping months. Also keep in mind, they take the larger of the weight-based or volume-based calculation, and round up. (Not sure what this means? Neither do we...but it results in more fees)

**Many sellers think they can "raise" the price of inventory by $3.99, just by having them fulfilled by Amazon, and offset these costs Think again. There is another post entirely dedicated to this. Just remember - you can never surpass Amazon's price (which is often 30-40% below retail price), it's unlikely customer will pay more than the sticker price on an item, and if you're the only seller of an item, you cannot justify raising the price.

**Final note - here are some other costs not usually considered:

  • 100% restocking fee (no seller credit) on items FBA considered damaged
  • 100% restocking fee (no seller credit) when FBA refunds a customer but does not require them to return the item
  • 100% loss on items damaged during transit to FBA
  • $1.25 more per item (or more) for non-media items
  • $2.00 - $5.50 additional fees for non-Amazon orders (or more)
  • and, of course... $1,000's of dollars, if an FBA mistake gets your account suspended, or they lose your deposit, or any number of other glitches that hold up your money.