Lost or destroyed inventory is the main source of arbitrations against Amazon.
When Amazon either loses, has destroyed, or disposed of your inventory, you are entitled to money damages.
Your money damages at arbitration include the sale price of your goods as if they were never lost or destroyed, minus the FBA fees. If you win at arbitration over lost or destroyed inventory, you will recover money that is exactly what you would have obtained if the products had been sold to consumers.
Another issue that can arise is wrongful FBA charges.
With Amazon handling the majority of the legwork for inventory, sales, payments, and returns, sellers aren’t often in the know about the small details of their account. Wrongful FBA charges can add up to thousands of dollars in losses. And the larger your yearly sales, the more likely it is that your FBA account has seen a few misappropriated charges. The vast majority of sellers doing at least half a million dollars a year or more in sales are owed back money from Amazon.
Amazon has many systems in place for catching these mistakes and returning money to sellers, but with such a large sales volume, it isn’t possible for them to catch everything. In other words, you have to be an active participant in watching what happens with your numbers, and be proactive if something seems awry. You’re always in charge of your own profit margin, and getting back reimbursements is a part of that.
Although Fulfillment by Amazon is an amazing service, providing sellers with an opportunity to grow their businesses, it’s far from perfect.
When working with Amazon to recoup or seek reimbursement of your lost inventory, or to rectify clerical errors, there is no estimate for how long it will take. Just like with appeals, Amazon may give generic responses or not respond at all to a seller’s attempt to resolve their issue.
Arbitration is not for everybody.
If Amazon has lost or damaged only a few hundred dollars worth of your inventory, for example, then it is simply not worth it to pursue. But if Amazon has lost, destroyed, or by error was responsible for tens of thousands of dollars in losses, and you can’t get Amazon to take responsibility and send you money, arbitration should likely be your form of dispute resolution.