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  • Writer's pictureCraig Gedey

What are Amazon FBA Liquidations and how do they work?

Amazon has launched a new scheme that will allow certain FBA Sellers the chance to recoup funds on stock that they are unable to sell.

Under the programme, Sellers could recover some value on eligible items, as well as avoiding paying Long-Term Storage Fees, disposing of inventory to landfill, or dealing with the hassle of having it returned. Amazon FBA Liquidations programme is invite-only, but Sellers can express interest through a survey.

Thompson and Holt managing partner Craig Gedey believes it is an interesting initiative for Amazon. He said: “The first thing to understand is that you aren’t going to recovering anything like the sale price of your stock, and once the scheme is rolled out, fees will be introduced for using it.

“But if you do have unsaleable items that are taking up valuable room in storage, this could be a way to recover at least a percentage of its value. It’s going to be very much a watching brief on how advantageous the scheme is for Sellers, and Amazon wouldn’t be introducing it if there wasn’t something signifiant in it for them. But it could have some value in specific situations.”

So how will it work?

Amazon will attempt to arrange a buyer for the eligible items that you submit for liquidation within 30 days of your submission. If you are successful, Amazon will then transfer the amount that the buyer pays for these items, minus fees, to your seller account. They then say that the net recovery value will appear in your account within approximately 60 days after the shipment is marked as Completed in the ‘Removal Order Details’ page in Seller Central.

How is the figure calculated?

Amazon will use several factors to establish that which include the following:

• Your sales history

• The average FBA selling price on Amazon

• The sales history of the specific ASIN

Once that has been established, third-party liquidators will then purchase the inventory for a set recovery value. Fees are set to be waived for all orders submitted until the March 31, 2021. Starting the following day, Amazon will then deduct a fee for each liquidation order and the Seller will receive the net recovery value.

What will the fees be?

Amazon will work them out on the following basis:

• Per-unit fee based on size and weight (varies 25p to £3)

• 14% referral fee on the gross recovery value

Then, once any eligible inventory has been submitted in a liquidation order, storage fees will stop for that inventory, freeing up both space and money for the Seller.

Thompson and Holt’s Craig Gedey added: “This is only going to affect a relatively small number of Amazon Sellers at first, so their experiences in using the scheme will be really interesting. We look forward to seeing the impact that it has.”

Worried about an Amazon suspension?

If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.

Thompson and Holt are also offering a free months trial of their Monitor and Protect service to help sellers prevent a suspension of ASINs or an their account during the COVID pandemic, more information on how to protect your Amazon seller account from a suspension can be found here.

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