Selling on Amazon the last years has been hell.
Curious to learn more. Are returns a problem?
Amazon forces sellers to divulge COGS, won't reimburse other costs
31–40 of 75 posts
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#32I remember reading in Reader's Digest in the 1990s that if you're in a store and you break something which the merchant asks you to pay for, you should offer to pay their cost to replace the item, which is of course often much lower than the sticker price. Later in life I wondered whether this was really fair, as things cost money to order, process, and store. (Though this is normally baked into retail pricing in the…
No it’s not fair at all, if you break something you don’t actually have to buy it. It’s the merchants liability for allowing things to be within reach of customers. Just walk out and don’t negotiate at all.
Is that just your own personal moral judgement or a legal assessment? Because I don't think this will actually work in practice when the police are called for property damage.
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#33[deleted]
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#34I remember reading in Reader's Digest in the 1990s that if you're in a store and you break something which the merchant asks you to pay for, you should offer to pay their cost to replace the item, which is of course often much lower than the sticker price. Later in life I wondered whether this was really fair, as things cost money to order, process, and store. (Though this is normally baked into retail pricing in the…
No it’s not fair at all, if you break something you don’t actually have to buy it. It’s the merchants liability for allowing things to be within reach of customers. Just walk out and don’t negotiate at all.
As a non-lawyer, when I had researched it, it is considerably more complicated than that, the answer seemed to be in which party was neglectful or negligent.
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#35This seems like an invitation to file an LLC that pays your other LLC 99.7% of the price and resells it for a 0.3% margin, then show them that invoice when asked for COGS.
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#36All great empires fall, often due an accumulated effect of dumb policy decisions. Ergo, Amazon's grip on market will eventually fail by dumb policy decisions... and this is almost certainly one of them.
How will it? Seems like they will have better prices or margins than before.
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#37I had one of the largest retailers to reach out to my company with an interesting problem. Given a weight and ingredients of packaged food they wanted to predict the content of each ingredient so that they could calculate the suppliers COGS so that they could use it as negotiating leverage against the suppliers...
Not very obvious how this is even helpful. You're getting an approximation at best, meanwhile most suppliers will have a net margin of something like 5% to begin with. If you're trying to figure out if it's currently 2% and you can't squeeze them anymore or they'll balk, or it's currently 7% and you can get some more, that kind of approximation doesn't tell you. Also, how's it better than the strategy of just putting…
Because companies like Walmart already do this. The squeeze manufacturers hard on price, to the point manufacturers are forced to make lower cost versions of a good under the same brand label.
Companies want the branded good because they think it will sell well, but they also don't care if the brand destroys the product. They just want the brand.
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#38Title is misleading; this only applies to items that are lost/damaged prior to being sold. “For items that are lost or damaged after a customer order in Amazon’s store, we’ll continue to reimburse you for the sales price on the original order minus applicable fees”
It’s not misleading in the sense that they are requiring you to disclose your margins and proprietary information to prove those margins, when they are your competitor. Most sellers are not selling unique items and the ones they would probably compete against are selling the same item over and over again, so they can clearly use this information to determine which sellers they can squeeze the most easily, which categ…
Did they change the article, because on the version I've read it doesn't say you have to disclose your cost, it says you can if you disagree with their estimate.
Plus, is Amazon loosing goods a common occurrence or this is a policy designed to solve an extraordinary issue?
The title is misleading, regardless of how bad the policy is.
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#39I was confused about this, here's how I understand it now: Previously when Amazon lost or damaged items in their warehouses, they would reimburse sellers the full sales price. Starting March 2025, Amazon will only reimburse the manufacturing cost of lost or damaged items. Sellers have to either accept Amazon's estimated manufacturing cost or provide documentation of their actual manufacturing costs.
Sellers have to either accept Amazon's estimated manufacturing cost or provide documentation of their actual manufacturing costs.
Human beings pouring over millions of documents of manufacturing costs doesn't scale. If it doesn't scale, Amazon typically gives up. All merchants have to do is flood Amazon with made-up documentation. What's Amazon going to do? Kick them off the platform? They just come back as ZUHUFRUAH and continue selling.
Use big tech's "scale" fetish against it.
Re: Amazon forces sellers to divulge COGS, won't reimburse other costs
#40From an amazon employee reply in the thread:
"When we say “Manufacturing cost”, it means your cost to source a product from a manufacturer/wholesaler/reseller, or produce the item if you are the manufacturer. You can provide the proof of your cost of sourcing and we will reimburse you accordingly. If you do not wish to provide your cost, we will provide our cost estimate and we will reimburse you for it. We calculate our estimate by evaluating the sourcing cost of comparable products sold by Amazon, by other sellers, and through other wholesale channels.
It excludes costs such as shipping, handling, customs duties, or other costs."
You could possibly try setting up your own "reseller" entity, where they act as an in-between, handling the shipping costs, etc and then reselling it to upon arrival for near the price sold?