Overview

Amazon is making a significant change to how it reimburses Fulfillment by Amazon (FBA) sellers for inventory that is lost or damaged within its fulfillment network. Starting March 10, 2025, reimbursements will be calculated based on the product's manufacturing cost rather than the previous valuation method. This policy shift fundamentally changes how sellers are compensated when Amazon loses or damages their goods before a customer order is placed.

Key Points

• Manufacturing Cost Basis — Lost or damaged inventory reimbursements will now be based on product's manufacturing cost, not previous estimated sale price or comparable product value
• Manufacturing Cost Definition — Amazon defines this as cost to source product from manufacturer, wholesaler, or reseller, or to produce if you're the manufacturer; explicitly excludes shipping, handling, customs duties, and other ancillary costs
• Seller-Provided Costs — Sellers can submit their own manufacturing costs directly through Seller Central for more control over reimbursement amounts
• Automatic Estimates — If sellers don't provide cost data, Amazon automatically applies estimate based on comparable products sold on and off platform
• Effective Date — New policy takes effect March 10, 2025

How Costs Are Determined

• Amazon Estimates — First option allows Amazon to generate estimate drawing from comprehensive evaluation of comparable products sold by Amazon directly, other third-party sellers, and wholesale channels
• Seller-Provided Data — Second option (strongly recommended) allows sellers to submit own manufacturing costs directly for significantly more control over reimbursement amounts
• Default Application — If you don't submit figures, Amazon's automatically generated estimate applies by default
• Update Anytime — Sellers retain ability to update or override estimates at any time once ready to provide actual costs

Managing Costs in Seller Central