Amazon Warehouse is a marketplace unto itself. Shoppers can find a variety of open-box or pre-owned items in 25 different departments, at big discounts.
Shoppers usually back away from used items because they fear a faulty product. However, some used items have great value because they were returned without being used.
Let’s say a customer buys a brand-new product on Amazon, and after receiving it, he realizes that he ordered a different color or that some of the features are not as advertised. Most likely, he will return the product to Amazon Warehouse.
After checking the product, Amazon Warehouse confirms it’s in optimal conditions to be repackaged and sold as a “used item,” and automatically, its price will go down.
Read on to learn more about how Amazon turns quality used products into discounted deals!
How Does Amazon Warehouse Work?
Amazon Warehouse is one of the best resources to catch great deals on returned or refurbished products. When a product is returned to Amazon, it is funneled through a return facility, where each item goes through a 20-point inspection process to determine its quality.
All products are inspected properly and given a complete description about their overall state. Plus, the offer page describes each item with 1 of 4 condition types:
- Used – Like New. An item is in perfect condition, all accessories are present, but the original packaging may have minor damage, or the product may have been repackaged.
- Used –Very Good. The item has seen limited use and remains in good working condition. It may show some small signs of wear, such as scratches or blemishes. The package could arrive slightly damaged, and with some missing accessories.
- Used – Good. The item shows wear and remains in good working condition. It may be missing some accessories, instruction manuals or assembly tools. The packaging could arrive damaged.
- Used – Acceptable. The item is fairly worn but continues to function properly. It may show signs of wear, such as scratches, blemishes, dents and worn corners. The packaging could arrive damaged, and may be missing multiple accessories.
Amazon keeps very strict quality standards about the condition and function of the items they sell. The fact that Amazon is still selling a slightly worn product through Amazon Warehouse means the item is guaranteed to be in working order.
One downside is that products do not come with a manufacturer’s warranty. However, all Amazon Warehouse items are eligible for Prime shipping, and backed by a 30-day return policy.
What Is Amazon Renewed?
Renewed items are pre-owned products which have been inspected, refurbished, and tested to work and look like new.
Renewed items have minimal to no signs of wear or visible cosmetic damage (when seen from 12 inches away). Also, all missing accessories are replaced (though some may be from generic brands).
Amazon Renewed is backed by the Amazon Renewed Guarantee, a 90-day return policy if the product doesn’t work as expected.
Reimbursement Policies for Amazon Sellers
The Amazon FBA Lost & Damaged Inventory Reimbursement Policy states that sellers will be reimbursed only for products lost or damaged under Amazon’s control:
The policy covers:
- Items damaged or lost in an Amazon fulfillment center
- Items missing within an Amazon fulfillment center for 30 consecutive days
- Items lost or damaged by the carriers and distributors
- Items lost or damaged while being shipped to an Amazon fulfillment center using Amazon partnered carriers
If Amazon is responsible for either damaging or mixing up the products prior to sending them to the shopper, they will pay the return shipping cost. Otherwise, you’d have to cover that expense.
If that’s the case, since Amazon is reimbursing you for the shipping cost –according to their policies– they’re allowed to repackage and sell the returned items at a discount.
Some things to keep in mind:
- Amazon can sell your products under these conditions without notice. It is within policy, because Amazon pays you for the product when they issue a reimbursement.
- Sellers don’t have to deal with processing returns, but also lose control over the customer experience to Amazon.
- Amazon Warehouse can list items as special offers at bargain prices, which could beat the Buy Box.
This is the reason why many sellers complain that Amazon wins the Buy Box with their own used deals.
What Is the Buy Box?
The Amazon Buy Box is the little ‘Buy Now’ button below ‘Add to Cart’. This option allows sellers to stand out from the competition.
MostAmazon sales are made through the Buy Box, so winning the Buy Box is bound to boost sales.
The Buy Box algorithm considers the following:
This means that every seller has the same chances of winning the Buy Box.
Amazon’s customer service, fulfillment options, and return policies set the standard in which products are marketed in the platform.
So, in many scenarios, especially those sellers under the FBM program, sellers end up competing with Amazon when selling their own items in the Buy Box.
Also, only products that own the Buy Box are eligible for PPC, so, if your sellers metrics have not been on point lately, you must keep in mind that your ads will be disabled. They will only become active again if you win back the Buy Box.
If you think Amazon Warehouse can hurt your business, maybe it’s better to have damaged products returned to you.
The default in Seller Central is to have Amazon reimburse the product, so you need to remove Amazon’s option to repackage your items.
Keep in mind that you will have to pay for the cost of returns. So, if your business is not at that stage yet, it might be better to consider reselling on another marketplace where you retain control over the process.
Another choice is to suggest changes on your items listed on Amazon Warehouse when you see incorrect information. This will help manage customer expectations and avoid unhappy returns.