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May 14, 2023

Bermuda Triangle at Amazon Fulfillment Centers?

Amazon is obsessed with inventory turnover, which is how fast products ship out

Amazon is obsessed with inventory turnover, which is how fast products ship out after they’re stocked on fulfillment center shelves.

So it's baffling when sellers report inventory they ship to FBA warehouses go missing. Compounding matters, many say they’re unable to get answers from customer support and have difficulty getting reimbursed for lost inventory.

It's not a new problem – it's almost as if Amazon has its own Bermuda Triangle at its facilities – but this week, a reader reached out pointing to a thread on the Amazon Seller Central boards where sellers were discussing the problem, which the reader called widespread. "It's costing small businesses a lot of money," they said.

The original poster on the thread said a shipment they sent in July that Amazon's UPS partnered-shipping indicated was delivered was never logged as having been received, nor has the seller received any reimbursement. "Invoices were provided long ago," they wrote. "Robotic seller support just asked for invoices again as if I never provided."

It isn't just a matter of Amazon not showing shipments as received even though carriers show they were delivered to its facilities. Sometimes, sellers say, Amazon shows shipments as having been received but then the reports indicate inventory has gone missing.

Another seller said they sent a shipment that Amazon checked in and counted as received with no discrepancies. But nine days later, they said, "85% of the shipment just disappeared and the sales from the shipment were canceled. The shipment was closed with all the discrepancies. It isn't a FC transfer issue, they closed the shipment."

One seller pointed out it was difficult to understand how Amazon could lose track of shipments sent to its fulfillment centers and yet, "Amazon can tell if an employee is going too slow in the warehouse or if a consumer is putting a bag of apples in their cart at a Fresh store with just cameras."

One seller pointed to another thread where some claimed sellers are misinterpreting reports, which are confusing, and said sellers shouldn't assume Amazon is "stealing" their inventory. An Amazon moderator finally provided the following response in that thread:

"The escalation team confirmed: Inventory is initially received at a location which is only used as a "Receive center", these receiving center do not ship out to customers, which is why later on there is another – negative transaction to record that a certain amount of units will be moved to another Fulfillment center. This is not quite the same as warehouse transfers transactions since this only happens between regular FCs. The "Receive centers" are used as an intermediate between the Vendor/Sellers and actual Fulfillment centers to have a better sorting method and to have a better inventory distribution amongst all FCs, the main purpose is to maintain customer demand. As explained by VTR this should later be received at the destination FCs, ultimately, the negative transaction is used to record every movement of the inventory since its first received.

NOTE: Inventory movements can take days if not weeks. Sellers are encouraged to wait for the eligible date of reconciliation of each shipment if they have concerned that the inventory is lost.

Reconcile your shipment: here

But a seller responded asking why then was Amazon dinging their account for the missing-not-missing inventory: "My major issue is that these debits are being picked up by the inbound performance summary as items missing from their respective shipments, despite the receiving reports showing the correct number being initially received."

The second thread really gets into the weeds. To show how complicated (and costly) the issue can be – one seller referenced the existence of third-party services that help sellers with FBA inventory reconciliation.

Given Amazon is normally so meticulous and detail-oriented, it sounds like sellers are spending a lot of time trying to figure out where their inventory is. Let us know your experiences with FBA inventory tracking.