◼️ Dirty Little Secrets of the FBA Reimbursements Industry - EXPOSED


This Issue's TLDR...

  • I have a rock in my shoe. And the name of that rock is "FBA reimbursement provider bullsh!t"
  • A comprehensive list of the best outside traffic sources for Amazon sellers in 2024
  • ASMR for Amazon

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BEST From Me

My good buddy Max Sigurdson-Scott from Selling from the Beach had a rock in his shoe last week. Or, maybe I should say...sand in his swim trunks? (HA!)

And the name of that rock (or sand) is GetIDA.

It began with a "Breakup Text From Your Ex" of sorts.

He called them out for Dark Patterns in their cancellation process.

Based on his recounting of GetIDA's cancellation workflow, I... agree.

In fact, I tossed a comment into the post, questioning whether such a complicated and elongated cancellation process violates the FTC's new Click-to-Cancel rules.

Max had more things to, uh, GetIDA off his chest though.

Next, Max pointed out something that most would not have noticed in GetIDA's Terms of Service:

GetIDA doesn't give credits for Amazon reversals of reimbursements.

This is the specific language that he pointed to:

In the final post of his GetIDA Opus, Max ran through some math on what the aforementioned policy means in terms of the effective commission that you're actually paying GetIDA.

The math...isn't good.

Now, GetIDA, for their part, have engaged with the posts and offered to do a webinar to "hash through all of the details at length."

They've also accused Max of spreading misinformation and being financially motivated (I'll come back to this point of financial motivations in a bit).

From one of the founders of GetIDA:

Most are confusing and misleading, though some are valid and interesting. It's one thing to educate the market. It's another thing to continue to post misinformation while promoting a service that you benefit from monetarily.

I'm curious to see how this all plays out. It's tempting to form a judgement here and then hold dearly to that first conclusion.

But, I will say...everything that Max raised is in line with the broader trend of shenanigans and bad behavior that I've observed from various FBA reimbursement providers.

So, to that end, and to continue Max's yeoman's work of shining some sunlight on bad practices, I'll share some more "dirty little secrets" of the FBA reimbursements industry.

SECRET 1: That 3% ain't 3%

  • WHAT: Many FBA reimbursement providers "sell in" with the shocking statistic that 3% of your Amazon revenue is lost due to Amazon inventory f*ck-ups, and they can claw all of that back for you.
  • THE TRUTH: 3% is an exaggeration in nearly all cases because 1) Amazon auto-reimburses for a variety of inventory issues and claim types (though, this creates another issue; more below) and 2) a bunch of variables -- product categories, destination FCs, return rates -- can significantly move the needle. So, maybe you get 3% back in total, but your FBA reimbursement provider may only be responsible for 1% of that.
  • RATING: 💩

SECRET 2: The G.O.A.T. ain't the G.O.A.T.

  • WHAT: Ask any Amazon thought leader for an FBA reimbursement provider recommendation, and they'll give you a name. What they *won't* tell you is that they're an affiliate of that provider or otherwise financially incentivized to have an opinion that a particular provider is the "G.O.A.T." That's sort of the nature of affiliate marketing though, right?
  • THE TRUTH: Well, yes and no. It's sort of nature human behavior to favor those that pay you ("His bread I eat, his song I sing"). What's "unnatural" here is that there are FBA reimbursement providers that sponsor events, newsletters, etc, with the explicit condition that those media "lock out" any competitors from sponsoring. Essentially, they're imposing exclusivity clauses (sometimes, long-term ones). Again, not anything "new" in the world of business. But, it's something to remember when you hear or read someone continuously recommending a provider without offering a balanced assessment of all the options.
  • RATING: 💩💩

SECRET 3: That Refund ain't your Refund

  • WHAT: Ever heard of the term "front-running?" In the FBA reimbursements space, it refers to providers jumping the gun and filing for reimbursements that Amazon would otherwise auto-reimburse. Put differently, these providers are filing claims, and taking commissions on those recoveries, when Amazon would have otherwise paid you those sums anyway.
  • THE TRUTH: I'm not the first one to talk about this. There was a weird little "I'm calling you out without calling you out" thing between GetIDA and Carbon6/Seller Investigators just a couple months ago (see below). In short, if your FBA reimbursement provider won't offer delayed claims, or to serve as a secondary, "clean-up" provider, they're probably front-running you.
  • RATING: 💩💩💩💩

SECRET 4: That Commission ain't the "Market Rate"

  • WHAT: Just like how realtors convinced the home-buying world to accept that a 6% commission is just "the rate," FBA reimbursement providers have convinced Amazon sellers that a 25% commission is "the rate."
  • THE TRUTH: The FBA reimbursements space is a mix of (sometimes basic) software and (required) services. The software piece is where an FBA reimbursement providers might excel in terms of internal cost efficiencies, but none of them can really avoid the manual aspect of the FBA claims process, which is...filing cases. Amazon requires that to be done by humans, not machines. So, FBA reimbursement providers have a hybrid cost model, with the software side of the business having a variable cost of basically zero, and the human side having non-zero variable costs. What I've learned, from speaking with founders and leaders at different FBA reimbursement providers though, is that 25% far exceeds that variable cost on the human side, leaving the providers that charge that rate with ample sums of (your) cash to throw at sponsorships, trips around the world, etc.
  • RATING: 💩💩💩

*

PS: Go subscribe to Max's fantastic newsletter and follow him on LinkedIn. In case you haven't noticed, he's been posted 1 Amazon hack/tip per day for the past 241 days! Talk about consistency!

FRIENDS OF B@A

Ecomtent

My buddy Max Sinclair of Ecomtent is at the bleeding edge of GenAI for Amazon.

They've long been training their models on Amazon-specific imagery, and making it possible for small, medium, and large sellers to generate Amazon creatives at scale.

Now, they're adding A+ content generation to their feature set!

Max shared some A+ content examples with me privately and...WOW!

Do your future self a favor, and head over to Ecomtent and play around with this new feature.

BEST From Everyone Else

BEST from LinkedIn

I love that Isaac compiled this list.

I was tempted to comment, but I held back.

I like sharing Amazon hot sauce (duh, I write a newsletter), but, only to a point.

For certain shareable things, I like to keep the sharing to a smaller audience. (In this case, all of my wonderful Best@Amazon readers)

Because, sometimes, when a source of "alpha" gets shared too wildly, that alpha goes away.

And winning on Amazon is hard enough.

So, with that said, here are my two additions to Isaac's list:

  1. Lasso: Lasso Affiliate+ is basically like a better version of Levanta. It's better because it makes is super easy (through AI, duh) for affiliates/creators/influencers to discover and tap into similar products to those that they are already promoting.
  2. Wayward: I don't know what to say about Wayward other than...of all the affiliate platforms I'm using, I'm getting the best performance here.


BEST from X

I found this super cool.

"But Jon, how am I supposed to show customers how my product sounds on Amazon?"

Through video, of course.

Check out this video from Airback.

It's part product demo, part ASMR.

And it's a masterful way to bring another sense (sound) into a shopper's product experience.

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Massimo
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BEST From The World Of
Entrepreneurship Through Acquisition

I talk about this often.

In any deal, there are 4 ways to win:

  1. Organic growth (i.e., profit neutral or profit accretive growth; NOT just pumping marketing to grow top-line like many Amazon Aggregators did)
  2. Cost-outs (i.e., making the business leaner and meaner)
  3. Buying below your basis (i.e., buying with ample margin of safety to cover your debt servicing)
  4. Multiple expansion (i.e., finding a "greater fool")

Ignoring all the complexities that go into due diligence, if you can't clearly see a path to "win" across one (or more!) of the above dimensions, then you should walk away.


Best @ Amazon

I'm a former Amazon marketplace leader and current 8-figure seller. I write about advanced strategies and tactics for Amazon brands, that you won't read about anywhere else. Not for beginners.

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