If you are experienced with Amazon Vendor Central, terms like deductions and chargebacks will not be new to you.
Chargebacks and deductions represent a significant amount of time and energy of the vendor-retailer relationship. They are the means through which retailers enforce compliance with their guidelines and protect their customers' experience. However, for suppliers, Amazon Deductions can heavily impact your bottom line and operational efficiency if not managed effectively.
Within this article, we shall delve into what are amazon vendor central chargebacks, shedding light on the diverse deduction types and the factors influencing their emergence. In addition, we present professional insights to proactively minimize their frequency and manage them with utmost efficiency.
Deductions refer to the money that Amazon deducts from your payment for violating Vendor Regulations. They can range from minor amounts for small infractions to a significant 50-60% of the product cost for major violations.
In recent times, there have been allegations that Amazon is issuing numerous deductions to increase its profit margins. As a vendor, it's essential to know how to handle these deductions effectively. To do so, you need to be aware of the various types of deductions that Amazon imposes on vendors.
1) Amazon Compliance Chargebacks
These are the most common types of deductions issued by Amazon. They are issued when the vendor fails to comply with the Vendor Agreement. The most common Amazon vendor chargeback list include:
2) Shortage Deductions
As the name suggests, these deductions are issued when the quantity of products received is less than stated in the invoice. Reasons for shortages can include:
3) Pricing Deductions
This will be issued when there are any discrepancies in the pricing of the product. There are numerous ways for this to happen.
Disputing Amazon chargebacks/deductions must be done within 11 days, or you risk losing out on profits. The conventional manual approach involves hiring multiple full-time employees to upload relevant documents to Amazon Vendor Central for each chargeback.
With already narrow margins, you don't have any choice but to process these numerous chargebacks. Don't forget, this is money that is already owed to you!
To dispute a chargeback, employees will dispute every single deduction by uploading relevant documents to Amazon Vendor Central. This chargeback process usually takes 15-30 minutes per deduction.
While this process works it is slow, tedious, and requires continuous focus. During seasonal sales spikes, deductions management can become overwhelming. Downstream effects include claims getting backlogged, warehouse and operations teams needing to get pulled from critical duties to help provide BOL and shipping data, and other internal inefficiencies. While teamwork is not a bad thing, there is certainly a better way to work together to ensure consistent disputing and payment is achieved, especially concerning Amazon chargebacks for vendors.
Robotic Process Automation or RPA is specifically designed to work with retailer portals, EDI, and other document sources to create and submit disputes. Whether it is Amazon, Walmart, Lowes, CVS or any of the twenty other retailers we support, iNymbus will streamline the end-to-end deductions management process & chargeback automation for your staff.
Our RPA is customized directly to your company's SOPs ensuring we maximize efficiency around your current tools and procedures. We do all of the heavy lifting to configure the bots and deliver a full, live product in as fast as two weeks.
These are the results our clients have got after they onboarded with iNymbus:
Processing chargebacks is a tedious process, but with the help of technology, you can not only fight this battle but also win it. Understanding your current process, what documents are needed, and how they are accessed is the first step to getting started with iNymbus.
Schedule a quick call to learn how iNymbus can help with your unique business needs and processes!