The key to maintaining profitability on Amazon is to improve your efficiency in the supply chain and finance. While you may have a firm idea of the terms and costs of negotiations, unexpected fees in the form of chargebacks and deficits are a common challenge. In this blog, we discuss why Amazon has a chargeback and deficit problem and what you can do to recover these payments.
What is the chargeback and deficit in Amazon?
If you have been trading with Amazon for some time, you can probably accumulate a balance of financial deductions through chargebacks and deficits. Amazon’s automated systems can cause unnecessary and sometimes even excessive discounts to your account that are difficult to understand and can hamper the long-term sustainability of your business.
Chargeback or non-compliance charges are the result of inconsistencies in areas such as purchase orders, packaging and shipping. Deficits, meanwhile, occur when Amazon believes that the amount of stock received in a purchase order has been confirmed or less than what was invoiced, resulting in a halt to payments.
Amazon’s strict requirements in supply chain management mean that failure to comply with these requirements can be costly for your profit margins. Brands face the problem of not knowing how many invoices are involved in the dispute process and what the nature of each error is.
The impact of chargebacks and deficits is even more significant in industries with tight margins, resulting in the loss of revenue in its purest form. Not only that, the time, effort and resources taken to recover this money affect all the other work and projects that your existing team should focus on.
What can you do to argue these claims?
Fortunately, brands can recover most of the chargeback and deficit claims through a debating process. The process can be tedious, but you’ll need to present specific data in specific ways to meet Amazon’s requirements. By using a professional recovery service to handle these disputes, your team can focus on their core responsibilities and avoid logging disputes with Amazon.
Molji, a team of BrainLabs supply chain experts, has helped a number of global brands create significant chargeback standards to recover payments and work with insiders to identify the main causes of incorrect charges through our unique reporting tool. Our operational excellence approach is flexible based on your current abilities, skills and business objectives.