We Know about Amazon Deductions All Too Well. Learn About How to Stop Them.

Posted by & filed under Business Credit Journal, Credit, Retail.

Aug 14, 2024

Written By SupplierWiki

The Tortured Supplier’s Department

Hey NACM Members,

We’re SupplierWiki. We create free educational content for retail suppliers, helping them recover from deductions and chargebacks and ultimately become A+ suppliers.

Our articles and free resources cover major retailers like Walmart and Target; however, in this edition of the NACM Newsletter, we’re investigating Amazon’s problem areas to identify and address their root causes.

And what better way to do that than to add a little investigation, within our investigation, with the queen of hidden messages, Taylor Swift?

As you read this, look for the easter eggs referencing the Eras Tour singer. We’ll let you know how many we’ve planted at the end.

So … are you ready for it?

At Amazon, suppliers may encounter several problem areas they should investigate:

  1. Catalog data defects
  2. Purchase order confirmation defects
  3. Carton content defects
  4. ASN defects

If you’ve got a blank space in your mind when it comes to solutions for these common issues, here’s how to shake it off.

  1. Catalog data defects
    • Make sure the external ID type in the Catalog matches your internal system.
    • There should only be one internal product ID for each external ID.
    • Make sure the carton quantity matches the physical quantity in the carton.
  2. Purchase order confirmation defects
    • Use the same unit of measurement across all data warehouses.
    • Whether you use a UPC, GTIN, ASIN, or Vendor SKU, they should match in the PO, ASN, invoice, and catalog.
  3. Carton content defects
    • Don’t use Unit UPC barcodes on case or master packs.
    • Get a regular audit process to check label placement and print quality.
  4. ASN defects
    • The first three problem areas can result in ASN defects.
    • Check the areas above against the ASN early in your root cause analysis.
    • Ensure your EDI transmission is set up to Amazon’s specification guide.

Soon you’ll get better at exploring these problem areas and cleaning up your Amazon issues.

Bonus Track:

We won’t leave you hanging with these problem areas. Here’s how your team can address the root cause of Amazon deductions:

  1. Uncover the worst offenders. Figure out what type of deduction is causing the most issues. The end game is to understand if there’s a pattern to the ASINs with chronic issues.
  2. Review the deep cuts. Download all the details to investigate where the issue might lie. Start with ASINs, sample labels, picklist, the ASN, and the invoice.
  3. Filter out timing. The timing of the invoice could be the only reason you are seeing a shortage. With this deep dive, focus on invoices with a payment due date at least 30 days before the current date.
  4. Therein lies the issues. Once you’ve got a data set, look for data incongruity between the catalog, PO, carton label, ASN, and invoice for the smoking gun causing issues in your supply chain.

Is It Over Now?

Not exactly.

Prime Day was July 16-17, which means your business may have seen an increase in sales but may have also received more compliance charges than usual. Here’s what to do:

  1. Ensure someone reviews your compliance fines and any Amazon updates ‘evermore.’
    • This review time can be tedious, but it is worthwhile to proactively monitor and update your processes and dispute fines within Amazon’s optimal dispute window.
  2. ‘Look What You Made Me Do’ to my receiving network.
    • Amazon began regionalizing its receiving network starting in July. The new cross-dock location (IXD) will be the only change on the PO.
    • Regional order variability may decrease over time as Amazon optimizes regional inventory placement to align with customer demand.
    • Review your POs that could be linked to Amazon issues with regionalizing their receiving network.
  3. Preparing for ‘New Year’s Day.’ In 2025, Amazon will be consolidating and simplifying SIOC (Ship In Own Container) and FFP (Frustration-Free Packaging) to the sleeker SIPP (Ship In Product Packaging).
    • Chargeback rates go from a flat $1.99 to a variable rate based on weight.
    • A new exclusion will apply for products (aka ASINs) that have existed for at least eight months and have shipped to Amazon less than 250 units in the trailing 12 months.
    • Before 2024 ends, ensure any ASINs that fit the criteria are SIPP-certified.

And, as promised, there were 10 intentional TS-coded easter eggs. If you missed one, dry those teardrops on your guitar and try again.

For more reading on Amazon, download this free eBook on Amazon Co-Ops to ensure your team gets the most out of your planned deductions.

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