I’ve been an FBA seller for a number of years now and I’ve dealt with the issue of lost product as well as returned product determined by FBA to be “Customer Damaged” that any freaking idiot can tell was damaged in the warehouse (a forklift tire track over the top of a smashed item once—I kid you not).

I have determined that the only way to deal with it in a way that maintains sanity as well as profit is to consider it a cost of doing business like any other. The gaslight that Amazon shoots us is to make us think that there’s someone who’s paying attention to the issue. But no one is looking for your lost stuff, and no one is looking at returned, damaged items and making logical decisions concerning where the damage originated. Instead, they’re just using algorithms. If some smart lawyer corners them some day about it, they’re going to say well we pay for a lot of stuff that wasn’t our fault so it works out, but obviously, who knows if that’s true. There are legitimate reasons for short inbound shipments—other than not sending an item in—that FBA would not be responsible for, such as an item not being labeled or a label falling off. I’m sure that happens. I’m sure items get damaged by carriers on inbound, too, although I’ve never seen any report of that from any of my shipments and have no idea how that is handled. In short, sellers don’t really have any clue what is going on during the FBA inbounding process. It is voodoo. I'm not sure Amazon does either, to tell the sorry truth.

But the bottom line is that FBA is not going to tell you what this cost of doing business is, you’re going to have to figure it out for yourself and make sure your profit margins recoup it. Amazon will not give you any way to determine this because it doesn’t fit their narrative of how FBA helps sellers reduce prices. They want neither sellers nor the public know that they do anything that might put upward pressures on pricing, so they’re going to keep offloading these costs on us and smile at us like the Cheshire Cat. These are not the droids you’re looking for. To mix some metaphors. But you, as an FBA seller, need to take your own steps to mitigate the damage. I’m still comfortable that it’s better than seller fulfilled, but this issue is certainly one of the things Amazon doesn’t tell you when you sign up.

Every seller suffers legitimate losses because of returns, these unfair / incompetent / voodoo costs just needs to be part of that. Hopefully there's a few pennies left over we can buy a cup of coffee with.

Another tidbit of sheer incompetence, twice FBA has stuck a label on the shrinkwrap of an item, no box, and then handed the items to UPS, who, of course, kicked them around and damaged them. When BOTH of those items came back, they were declared "customer damaged" probably because there's no damage category titled Damaged By Idiots. Appeals denied. Logic not applicable. Amazon will offend your intelligence on a regular basis over this. This is an emotional cost of doing business with them. Must be Zen. Keep calm and find a way to make some money.