EP #283] [ENG] - How much money Amazon owes you and how to recover it - Richard Dubecki

EP #283] [ENG] - How much money Amazon owes you and how to recover it - Richard Dubecki Speaker 2: Welcome to The Ecommerce Lab By Ecomcy. This is the place for everything related to Amazon private label and e-commerce. Learn exactly what you need to start or scale your business. Get insights from the top industry experts who will discuss the latest trends and best practices in the world of Amazon. From choosing products and sourcing from a supplier to setting up your Amazon account and marketing your business, you will hear it here. Let's get started. Here is your host, Vincenzo Toscano. Speaker 3: Hello, guys. Welcome to another episode of The Ecommerce Lab By Ecomcy, the place where everything related to Amazon, FBA, private label and e-commerce. My name is Vincenzo Toscano, founder and CEO of Ecomcy. And today we bring another special guest. His name is Richard Dubecki and he's the sales and marketing manager at Refund Pros, which I would say is one of the good solutions out there when it comes to reimbursement. Like we know when it comes to reimbursements, you know, you really need to be careful because otherwise Amazon will keep all your money. And that's exactly what I'm going to be talking with Richard today. Like there's been a lot of changes in the last 12 months. Especially there's going to be a big one coming up in March. And I'm going to be talking with Richard, you know, all the things that you guys need to take in consideration when it comes to, you know, how you can take action as an Amazon seller and how solutions as a reform process can be, you know, the best thing that you can implement right now to make sure that, you know, you put some money back into your business. So, Richard, pleasure to have you on the show today. How are you doing? Speaker 1: I'm Greg Vincenzo. Thank you for not butchering my last name. I really appreciate it. Speaker 3: I practiced a couple of times before going live. Speaker 1: That's okay. I look forward to chatting with you a little bit about the reimbursement changes. Obviously, there's a lot of moving parts right now in the Amazon world that are impacting sellers globally and it's really going to affect people's profit margins as we move closer to the March 10th changes. Speaker 3: Yes, I think this is going to be an interesting episode because, yeah, just going back to what I just said, like when it comes to reimbursement, I don't know why, but Amazon really put a huge focus on that last three months. Like they've been doing a lot of changes when it comes to that. And to some extent, sometimes I have conversation with sellers and they lost track of, you know, all the things that have changed. Some people is talking the last way, you know, the last way of doing reimbursement in terms of their old policies. And now they're finding out things that nobody used to be. So I guess maybe, you know, if you want, let's have a quick, you know, a catch on everything that happened in the last couple of months and how this together with the March change is going to be a huge impact for Amazon sellers. Speaker 1: I think if we jump back, I think it was July of last year, the first initial rollout of Amazon's policy changes revolving lost and damaged FBA inventory reimbursements. They published that to the world and then on October 23rd, of 2024 in the US and Canada, they started proactively reimbursing sellers for their lost and damaged inventory, which is great. At Refund Pros, we help people get this money back. And what we're seeing is they're actually doing a good job of this, which is fantastic. That's all positive. And then they just actually rolled out the same changes in the UK and the EU. So January 9th was when those changes happened. So proactively reimbursing lost and damaged inventory. But I think I think that was a precursor to what is coming in March, right? It's, you know, get sellers all hyped up, get them excited, being like, hey, listen, we're going to start paying you back things automatically, which they should have been doing anyways. Like, you know, so they kind of, they set the table. Yeah. Hey, guess what? We're going to pay you back these reimbursements automatically. And then you fast forward a little bit and March 10th rolls around and they made this release in December that, by the way, we're only going to be reimbursing you the manufacturing costs of your products. Speaker 3: Yes, they camouflage the thing, you know, it's like there is a saying in In the UK, I don't want to say the word because it's a bad word, but we call it the S word sandwich. You know, you get the good things and then the S word in the middle and then you end the sandwich. So essentially you camouflage the bad thing that's coming, which is effectively this because If, you know, as an Amazon seller, now you are counting on when, you know, Amazon were losing your, your products, they would give you potentially what you could get out of that inventory. Now they're going to give you manufacturing costs. I guess I would like to dive a little bit deeper into that because some of the questions started to get, and maybe you can help me out with this, is people say, okay, when it comes to my manufacturing costs, these are costs associated with the product that I got lost. It could be, you know, the shipping, actually, the taxes I will have to pay, and other things Let's go in relationship to actually take this product into Amazon warehouses. So tell us a little bit about what are some of the conversations around that. Are they actually only taking consideration while you're paying at the factory level or the whole cost of getting the product to the U.S. Amazon warehouse? Speaker 1: Yeah, so if you've spent any sort of time or the listeners have spent any sort of time on Reddit or social media posts revolving around Amazon, they know Amazon sellers are not happy. Like, Amazon, it's true, there are so many additional costs, you know, there's customs fees, shipping fees, all the other stuff that it's revolving around. Amazon is only going to reimburse you the cost of goods for that product. Really what they're trying to do is to increase their profit margins and find ways around it and trying to find ways that they can better their margins over time. I think there's people out there that are saying they're trying to like double their profit margins in the next one to two years. Well, that isn't like a million dollars in profit margins that Amazon has right now. It's billions. So how do you do that and how can we do that? Well, when you look at reimbursements as kind of a part of an Amazon ecosystem, historically speaking, FBA sellers can recover one to three percent of their annual revenue in reimbursements, right? So say you're, you know, you're selling a million dollars products on Amazon. So that's what? $10,000 minimum, 10 to 30k. Well, now with this new policy coming into play, you know, That number is probably going to be 50% to 60% less. As a company, as a reimbursement service, we don't really know what the impact is going to be because historically it's been 1% to 3%. Now it might be half a percent. Well, that half a percent that you're losing is coming out of your profit margins as an Amazon FBA seller. For sellers that have very small profit margins, this could be the nail in the coffin. This might be the, okay, I'm done. I can't sell on Amazon anymore. For the sellers that have extremely high profit margins, this might not be anything. They can just absolve it, write it off and just kind of carry on carrying on. Unfortunately, most Amazon sellers out there, when you subtract the fees, the cost, the shipping costs, all of that stuff, your profit margins are next to nothing as is. Speaker 3: Yes, it's very tight. Speaker 2: Yeah. Speaker 3: And I think the situation here is that not only now effectively your margins are going to be affected, there's also a huge controversy around this that You know, let's be honest, Amazon hasn't always done things in a clean way. What I mean by this is now they have access to all the cost of goods to all Amazon sellers. Who takes the possibility of the equation that now they're going to know exactly how much margin you're making. And they can use that to strategically actually adjust fees because they might say, oh, this guy actually, most Amazon sellers in this category, as an example, on average do 30%. We can take 5%. Let's actually increase fees and now let's reduce it to 25%. They're not going to cry or complain because it's still high. So now they have more understanding of your margin to see how much they can squeeze you. Is that right? Speaker 1: Yeah, yeah, yeah, for sure. And like, you know, that's one of the things like Amazon, it's kind of like, you know, You said the S sandwich, but we can call it like the good-bad-good sandwich, right? The good is a, hey, guess what? We're going to start paying back everything automatically. Bad, oh, by the way, we're only going to pay you the cost of goods on your products. The good, by the way, we're not going to raise any fees in 2025. So, you know, they're trying to like sandwich the bad in the middle of those two positive things for sellers. But at the end of the day, what they would have got in reimbursements is definitely good. Like if they would have raised fees 1% or half a percent or whatever it might be, they probably would have been better off with that than the manufacturing reimbursement, like the manufacturing cost reimbursements. With a seller, you were mentioning they'll know your product costs and your margins. That's not necessarily true because Amazon have the option to not send their cost of goods to Amazon. They can choose not to send that information to Amazon and hold it tight to the vest. The issue is Amazon can then decide what they want to pay you and if it's wildly under your cost of goods because other people on the Amazon marketplace are manufacturing things in China and maybe they're paying 50 cents to manufacture something that you're paying $3, they're going to pay you 50 cents. Speaker 3: On the other hand, it could be also a way to make profit because if for whatever reason you're super optimal because of goods and everybody paying more, you could just say, okay, yeah, Amazon average is higher than what actually pays, so it can go both ways. Speaker 1: It can go both ways, absolutely. But like, let's be honest, Amazon is going to find the cheapest thing and it's going to reimburse you that. Yeah, exactly. You know, there are sellers with those super high margins out there that are just going to be like, you know, whatever. It is what it is. We'll just leave it be. Speaker 3: Yeah. Now, saying that Amazon is essentially now a automatically reimbursed Amazon service, like let's bring to the table all those things that Amazon is still not reimbursing you for. The solutions like yours are going to be key. What are some of the things that Amazon sellers could still get their money back that practically Amazon is making mistakes and you can benefit from that? Speaker 1: Yeah, for sure. If you look back at the policy changes in October and then January for the UK, it revolves mostly around lost and damaged inventory in an FBA warehouse. Historically, those reimbursements made up anywhere between 50 and 70% of everything a seller got back for most sellers. Now, the big thing that is still available to sellers, and again, we don't really know how the March policy is going to affect the reimbursements for lost inbound shipments or receiving discrepancy. So basically, when a seller is sending your units to Amazon, say you send 1,000 units and they receive 900. Amazon does not take ownership of those reimbursement cases because they don't feel they're at fault. You as a seller have to file documentation, either bill of lading, packing slips, purchase invoices to open a case to get back a reimbursement for the units that didn't show up. Now, Amazon's March 10th policy states that these reimbursements for cost of goods are going to be when Amazon actually has the products in the warehouse and they're lost or damaged. Technically, the products never actually made it to Amazon for a lost and bound shipment, so there's kind of a gray area on if that is going to be included in that policy because the products never actually made it to the Amazon warehouse, but it's a huge reimbursement type. We see some sellers. We have one supplement brand that does over $10 million in sales. And they got back 91% of their reimbursements last year came from lost inbound shipments, which will never be paid back automatically by Amazon. Speaker 2: Yeah, yeah. Speaker 3: That's another thing I want to talk about, the timelines. I know there's been some changes when it comes to that as well, like how much you can look back on certain things. And this is something that every single time I've been going to events and having conversations with sellers, that's one of the main topics they come to me and say, oh, Vincenzo, do you know how How long I can go back in terms of, you know, having a look at my reimbursement. So tell us a little bit about that because I know there's also been some big changes when it comes to that. Speaker 1: Yeah, for sure. And we'll kind of focus on the lost and damaged because that's where like the biggest change happened, right? So prior to October 23rd, a seller could go back 18 months retrospectively. It's a year and a half. So lots of time to help look and recover and spend time. October 23rd, January 9th in the UK and the EU, you went from having 18 months to 60 days. Now, to be fair, Amazon's proactively reimbursing most of the stuff automatically, so it shouldn't be that big of an issue moving forward. But that said, there are still some claims being missed and it's really important that sellers are constantly monitoring using internal processes. So maybe they have people in-house in their operations team that are, you know, looking over shipping reports, looking over their inventory ledgers and staying on top of everything. Or hiring a third-party service like Refund Pros to go in, monitor the inventory, monitor the issues, and make sure that if you are entitled for a reimbursement, that that is getting submitted prior to any changes. With the lost inbound shipments, which is the other really big one and it's where most sellers fall short in recovering because it is a little bit more of a hands-on process. It's still a nine-month window that sellers can go back and that didn't change with any policies. So, you know, no changes there. Speaker 3: Cool. Now, I guess something I want to bring to the table for all the Amazon sellers listening is, you know, what is the kind of SAP that they should start creating around the operations of running around Amazon? When it comes to reimbursement, because I feel it's very important for people to understand how a solution such as Refund Frost actually can embed it into what they do in terms of managing their account on a daily basis. So I would say from the conversation you have with your clients on a daily basis, what are some of the biggest kind of discoveries or wins they started to identify that they were not doing before by bringing a solution like yours to their systems? Speaker 1: Yeah, I think the biggest thing that a lot of our clients get, especially the ones that just start working with us and have never worked with somebody before, is just a knowledge base, right? There's so many sellers who aren't necessarily following best practices when it comes to actually sending products and inventory to Amazon and then keeping tabs of it. A really great example is for lost inbound shipping claims. If a seller is constantly overshipping on a shipping plan, Amazon can use those overshipped units against them on future claims. So like really educating a customer being like, hey, listen, just so you know, you overshipped 100 units. So if your next shipment is out by 100 units, so it's a true loss, Amazon will then take those units from the other shipment and be like, oh, by the way, that's for this. Speaker 3: I see. I see. Okay. Speaker 1: So like it's really, really important that like we educate our customers and be like, hey, listen, like whatever you put into your shipping plan in Amazon, make sure it's accurate. And a lot of times it's very difficult because the person who's managing the shipments is sitting in an office somewhere. Whereas the people who are actually shipping the products are completely, you know, detached. Maybe they get a PO for a certain number of units and they have an extra 20 or 30 units, you know, just kicking around. I'm like, well, they're no good to us here. So we might as well just send them. But they don't know the long term impact that it's going to have on their business. Speaker 3: That's even a new lesson for me. I didn't know about that. I knew there was a lot of mystery always. I'm sure you have encountered this with some of the clients that certain units appear out of nowhere. But sometimes it's as you mentioned for all the shipments that then they bring that forward and they consolidate your new shipment and inventory. Interesting. Speaker 2: Yeah. Speaker 1: Yeah. Yeah. No, it's, it's pretty wild, man. Like Amazon can basically do whatever they want. My dog is growling. You can hear my dog. Speaker 3: Welcome to the podcast. Unknown Speaker: All right, there we go. Speaker 3: There you go. Speaker 1: Dog in a podcast, you know, it always ups the ratings, I tell you. But yeah, it's pretty wild, right? Like when you look at, you know, what Amazon is doing with sellers and how they're impacting their businesses indirectly and directly. And there's really not much a seller can do, right? We use the phrase, it's the cost of doing business on Amazon. Speaker 3: Exactly. There you go. Yeah, I agree. I think another thing I would like to bring to the conversation as well is sometimes people think everything that's a reimbursement is a Is a process that you might do only once and then that's it in the sense that they don't understand that these are always evergreen process like you have to keep the reimbursement system in place like connected to your account and checking because if you don't like you might clean your account once but then. those mistakes start to build up again and then there's a lot of ways that gets accumulated over time so tell us also in terms of that like what are some of your recommendations when it comes to reimbursement is this something that you need to you know check on a monthly basis or every two months now given the timelines what is your best practice? Speaker 1: More frequently honestly like at Refund Pros many of the service providers in the in the space will audit between daily and weekly and then some people are like bi-weekly depending on the claim and things can change pretty rapidly, right? Like a claim that isn't available today might be available tomorrow. You know a good example again is that is right now we're about six weeks post kind of the holiday shipping season. Well all those shipments you sent to Amazon back before the holiday season, before Black Friday and Boxing Day and all that kind of stuff are now eligible to claim refunds for or reimbursements for. Again, going back to timeframes, for a lost and warehouse item, you have 60 days to file a claim. You could run it every 60 days, but if you have other things going on in your business and you have a meeting come up or something, that one claim can be ginormous. Some closed shipment claims that we've seen in the past are six-figure claims. You know, you get $100,000 back. Speaker 3: Yeah, I know. It's big. Speaker 2: Cool. Speaker 3: So I guess now to start coming to a closure, like what are some maybe other best practices or maybe, you know, insights you'd like to share around reimbursement that you think, you know, I really want Amazon to be aware of this. Speaker 1: At the end of the day, what I really want people to get out of it is if you don't have time or resources, many Amazon sellers out there in the universe are small teams, one to five people running an entire business. Six, seven figure, eight figure Amazon sellers and they just don't have the capacity to constantly be monitoring reports. If you feel like you're getting kind of overwhelmed by the idea of reimbursements, find help. There are many businesses in our space who are willing to do the work, do the effort, find the claims and get that money back for you. Obviously, you have to choose the one that works best for you. I never say one is better than the other. I can't speak to competitors. I know at Refund Pros, If you want customer support, if you want the educational component as well as the reimbursements, we're a great resource. If you want flashy, fancy dashboards, we're probably not the best service provider for you. Really, you choose what you want in a service provider and then just go with it. Try it out. Most of the businesses in our space work on commission with no contracts. So it's like. Speaker 3: Yeah, just do something. Speaker 1: Do something. Speaker 3: Love it. Awesome, Richard. So tell us how people can get in contact with you if they want to talk more about this or work with you guys. How does it work? Speaker 1: Yeah, for sure. So a couple ways. My LinkedIn is always open. You can find me there. You can always email me, richard at refundpros.ca. Check out our website. Refundpros.ca or .com. We also offer services on shipping carrier auditing, so sellers who are doing FBM orders with UPS, FedEx, DHL, Canada Post in Canada. We can help monitor those shipments, get late shipment refunds back. Yeah, I'm pretty active on social, so always open to accepting DMs. If you have questions about reimbursement types, timeframes, Any sort of policy changes, if you want to just chat, I'm always open. Speaker 3: Love it, Richard. So thank you so much. I'm going to put all your information down in the description. Other than that, it's been a pleasure. Thank you so much for being here, man. Speaker 1: One more thing, just before I leave. All the sellers out there watching, make sure if you currently or you haven't currently been claiming your reimbursements, get to them before March 10th. Make sure everything is claimed because what you're owed now will not be what you're owed on March 10th. Speaker 3: Yeah, super important. Speaker 2: Good one. Speaker 3: Thank you for that, man. So yeah, see you in the next one. Thank you so much. Thanks Vincenzo. Speaker 1: Cheers. Speaker 2: Thanks for listening to The Ecommerce Lab By Ecomcy. Be sure to subscribe so you don't miss an episode. While you are at it, we would appreciate it if you could leave an honest rating and review on Apple Podcasts, Spotify, or wherever you listen. That will make it easier for others to find out about the show and benefit from it. Want more? Visit our website at www.ecomcy.com where you can get your first consultation for free or find us on Instagram, Facebook and LinkedIn at Ecomcy.