News & Insights
A Guide to Amazon FBA Packaging and Returns
One of the ways that Amazon sellers try to reach their full potential and land the coveted Buy Box is by opting to use Fulfillment by Amazon (FBA) rather than managing the process alone. The service outsources order fulfillment to the online retailer and puts your products inside an Amazon FBA warehouse where they can be picked, packed and shipped by an Amazon employee. Unlike a Vendor Central 1P relationship, the seller retains complete control over pricing and FBA inventory management while relying on Amazon logistics for the rest.
Obviously, the decision to use Amazon’s FBA service comes with added costs. In addition to paying standard seller fees on orders, Amazon will also charge FBA fees based on the type and size of the product. Storage fees for the space that inventory takes up in Amazon’s fulfillment centers are yet another cost that results from using an FBA model for sales.
However, some of these costs would likely originate elsewhere, such as from in-house employees or a different logistics provider. By partnering with an Amazon fulfillment center, sellers enjoy an easier path to Amazon Prime status for their products, reduced customer interactions and more streamlined processes for returns.
Of course, FBA requires a solid understanding of the packaging requirements and Amazon’s rules for stocking inventory in their industry-leading supply chain.
Don’t overlook the importance of FBA preparation
For brands planning to take advantage of the FBA service provided by Amazon, the process is more complicated than just shipping products to the global marketplace’s warehouses. The company has strict requirements that sellers must meet before products are accepted into their supply chain.
Proper preparation ensures that your products are stored and handled correctly in the fulfillment center, which can help reduce damage and improve the overall customer experience. Meeting Amazon’s labeling and packaging requirements reduce the risk of product returns and shipping errors or delays. In exchange, sellers can take advantage of Amazon’s fast and reliable fulfillment network at a lower shipping cost than alternatives, which helps get the products to customers quickly and efficiently. For some brands, using an Amazon FBA prep service may be worthwhile to navigate the various requirements.
General Packaging Rules
When selling via FBA, sellers must follow all general requirements for shipping inventory to Amazon’s fulfillment centers and realize that Amazon can refuse, return, or repackage any product that does not meet its standards. Occasionally, these mistakes may also lead to a fee for failing to satisfy Amazon product compliance rules.
First and foremost, every product must have a unique FNSKU (Fulfillment Network Stock Keeping Unit). An FNSKU label identifies a product as a Fulfillment by Amazon product and by an SKU. Sellers who market similar items, where the only differences between the products are size, shape, or color, must give each product variation a new FNSKU. For tracking purposes, each package must also have an exterior barcode or label, which can be scanned. The label must be accessible and readable.
Beyond the above requirements, the packaging rules can vary slightly according to the type of product. If an item fits multiple categories, it must be prepared for shipment according to all applicable categories’ regulations. Amazon also has specific rules for the different types of packaging options:
Loose products – When sold together, loose products must be contained within one package. Units that are sold as sets with many pieces within one box must be marked with a label that says “Sold as set” or “Do not separate.”
Boxed units – Any shipments in boxes must be six-sided and completely sealed, and difficult to reopen. In addition, all boxes must be able to withstand a medium amount of pressure on any given side.
Poly bag units – Poly bags need to have a minimum thickness of at least 1.5 mils, and those with openings larger than five inches must contain suffocation warnings. These warnings must be printed on the bag or attached as a label in an easy-to-find location using an appropriately-sized font. The bag must be transparent and contain a barcode that can be scanned easily. The poly bag must be completely sealed and should not protrude more than 3 inches past the product’s dimensions.
Bubble wrap – Products with bubble wrap must be tightly wrapped and taped shut so the product cannot fall out, as well as labeled with a scannable barcode on the outside. The packaging should be sufficient to withstand a three-foot drop test on a hard surface without the contents breaking. Bubble wrap may be required because the item is fragile and could be easily damaged during transit or for heavy or dense items that could damage other shipments.
Over-boxing – Amazon may require over-boxing when there are safety concerns about shipping and handling. Over-boxing involves placing a prepared or packaged product in a box for added protection, even if the product is already boxed. For example, it is typically required for sharp items that could puncture packaging materials, fragile items that failed the bubble wrap drop test, hazardous liquids in glass containers over 4.2 oz, and for vinyl records.
In addition, Amazon may impose further requirements such as additional taping or case quantity limits to ensure products can be fulfilled efficiently and delivered in good condition. Items with expiration dates must include the date in MM-DD-YYYY format on both the individual unit and the shipping container. Approved supplies can be purchased directly from Amazon to make the packaging demands simpler for sellers.
Managing FBA returns
As an Amazon seller, returns are inevitable. Fortunately for FBA participants, Amazon handles the customer service and logistics of all returns. However, that doesn’t mean that brands can afford to ignore the reasons for or consequences of an Amazon return. When a product arrives at an Amazon facility as a return, it can either be returned to sellable inventory or marked as unsellable, depending on its condition and the reason, or disposition, indicated for the return. Therefore, it’s helpful for sellers to understand the different categories of returns and have a plan for dealing with each type.
In the best-case scenario, returned items will be identified as “sellable” and automatically returned to a brand’s FBA inventory to be resold to another customer. Under these circumstances, no additional action is required from the seller. However, if there is doubt that the item should be resold, it’s possible to place a removal order to have the product returned to the seller for inspection.
It’s not unusual for a return to result from a damaged item that is discovered before it is delivered to the purchaser. If the item were damaged in the warehouse because of a mistake by an FBA worker, the seller would be eligible for reimbursement. However, if it’s determined that the damage resulted because it was sent to the Amazon warehouse in that condition or the seller failed to meet Amazon’s packaging requirements, there will be no reimbursement.
Customer damaged returns
Some items that are returned will be classified as “customer damaged” and will also not be returned to your sellable inventory. This category does not necessarily mean that the customer is at fault for the damage. Instead, it means that the customer discovered the damage upon delivery. Typically, these items warrant a removal order via Amazon Seller Central to inspect their actual condition and decide the next steps. Since the customer makes the damage determination rather than Amazon, the product’s actual status can vary greatly and is sometimes found to still be in new condition.
Carrier damaged returns
Occasionally, an item is damaged in transit to the customer. When this occurs, it is the fault of the shipping company used, such as UPS, FedEx or USPS. Amazon will reimburse sellers for these returns as long as they don’t request removal to have them returned.
Similar to “customer damaged” returns, defective returns identify items that are returned when the customer states that it is obviously damaged or faulty. Again, this is an assessment from the customer, so sellers should inspect the item to determine the next steps. Otherwise, the item will join the brand’s “unsellable” FBA inventory.
Remember, too many claims of defective items can put an account in danger of a suspension and result in negative seller metrics. So if a customer returns an item as defective that is actually in good condition, the discrepancy should be reported to Amazon with evidence to try and avoid the negative consequences.
Typically, a customer return must be completed within 30 days of the initial purchase. However, the window is extended during the holiday season beginning November 1 each year. Products purchased after that date can be returned until January 31 of the following year. If a return is processed, but the item is not returned to Amazon within 45 days, the company should reimburse the seller. Still, it’s best to monitor for this issue since Amazon may not provide the credit automatically every time.
Amify is the whole package
Is your brand ready to win on Amazon marketplace? Partner with Amify and find out how Amazon FBA facilities can be the key to beating the competition and accomplishing your sales goals. Our team has a deep understanding of FBA requirements and how to leverage the program to achieve the growth you’ve been chasing. Schedule a consultation today.