Amazon Now Reimburses Lost FBA Inventory at Manufacturing Cost

A brand we audit had 1,900 units go missing inside Amazon's fulfillment network over nine months. Every claim was filed correctly. Every claim was approved. The money that came back was a fraction of what those units retail for, and nobody on their team could work out why.

The claims weren't the problem. The valuation was. And the input that decides the valuation was sitting blank in their Seller Central account.

What changed on 31 March 2025

Amazon now reimburses inventory lost or damaged inside a fulfillment center based on your product manufacturing cost rather than the price the item sells for. Before that date, a lost unit was broadly valued against what you were selling it for, less fees. After it, the question Amazon asks is what the unit cost you to make or to buy.

For a brand buying at 25% of retail, that is a very different cheque for the same lost pallet. And it applies to the largest reimbursement category most sellers have, which is warehouse loss and damage.

One carve-out matters and it is easy to miss. Units lost or damaged after a customer has ordered them are still valued against the sale price, less the fees Amazon would have taken. So two identical units, lost a week apart, can be reimbursed on entirely different bases depending on whether an order had been placed. If your catalog is large enough that this is now a recurring line in your P&L, FBA reimbursement recovery is the service that reconciles it claim by claim, and its own pricing page explains what that costs before you talk to anyone.

What Amazon counts as manufacturing cost

Narrower than most sellers assume. It is what you pay to source the product, or what it costs you to produce it if you manufacture. It does not include freight to the fulfillment center, customs duties, handling, prep, or any of the landed-cost components a finance team would normally include when valuing inventory.

That gap is worth understanding before you argue with it. Your internal inventory value and Amazon's reimbursement value are measuring two different things on purpose, and a claim escalation that leans on your landed cost will not move.

How each claim type is valued now

What happened	Valuation basis	What decides the amount
Lost in the fulfillment center, no order placed	Manufacturing cost	Your sourcing cost on file, or Amazon's estimate if blank
Damaged by Amazon in handling, no order placed	Manufacturing cost	Same
Lost or damaged after a customer order	Sale price less fees	The order record
Customer refunded, unit never returned	Order-based	Returns report against reimbursements report
Inbound shipment shortage	Unit value, evidence-led	Carrier proof of delivery and your packing list
Fee overcharge on weight or dimensions	Fee difference	Measured versus charged dimensions

Read that table as a reconciliation map rather than a policy document. The categories move, the deadlines differ by claim type, and Amazon has tightened claim windows more than once. Confirm the current rules for your claim type in Seller Central before you file. The mechanics of filing haven't changed much and are in our FBA reimbursements walkthrough.

The blank field that costs the most

This is the part that turns a policy change into a leak. You can supply your own manufacturing costs in Seller Central. If you don't, Amazon applies an estimate of its own, and your lost-and-damaged claims are valued against that estimate instead.

Across the accounts we've inherited this year, the cost fields were blank or zero far more often than they were populated, and in every one of those cases the brand had no idea its reimbursements were being calculated off a number it had never seen. Nobody chose that. It's the default, and defaults are where operational money goes missing.

So the single highest-return thing you can do this week has nothing to do with hiring anybody:

1. Open the manufacturing cost settings in Seller Central and look at whether your ASINs carry a cost at all.
2. Populate them with your true sourcing cost per unit, excluding freight and duties, because those are not part of the definition and including them invites a dispute you will lose.
3. Keep the supplier invoices and purchase orders that support each figure. Amazon can ask, and a cost you cannot evidence is a cost you cannot defend.
4. Update them when your supplier pricing moves. A cost entered two years ago at a lower unit price is quietly capping every claim you file today.
5. Re-check after any catalog change. New ASINs arrive with the field empty.

This is free. It takes an afternoon on a modest catalog. And it raises the ceiling on every future lost-and-damaged claim you make, whether you reconcile in-house or pay somebody to.

Evidencing a cost, and the ASINs where that gets awkward

A cost you enter is a cost you may have to support. Amazon can ask for purchase orders or supplier invoices against a claim, and the figure in Seller Central needs to be the one those documents show.

Three situations make that harder than it sounds, and all three are common on catalogs past a few hundred ASINs.

• Two suppliers for the same ASIN. If you dual-source, your unit cost isn't one number. Pick the basis you can evidence for the inventory most likely to be sitting in Amazon's network, document why you chose it, and revisit it when the mix shifts. An average you can't tie to an invoice is the weakest of the options.
• Kits and bundles. A bundle's cost is the sum of its components plus whatever you pay to assemble it, and the assembly is the part brands forget. If a third party kits for you, that invoice is part of the cost and you should be able to produce it.
• Costs that moved mid-year. Supplier pricing, tariffs and currency all move. The field holds one figure at a time, so the practical answer is to review it on the same cadence you review supplier pricing rather than treating it as a one-time setup task.

In our experience the brands that handle this well aren't the ones with the most sophisticated system. They're the ones where somebody owns the field and reviews it on a schedule, the same way somebody owns restock quantities. It's a ten-minute recurring job that protects the value of every claim underneath it.

What to tell your finance team

Expect a question from whoever owns your inventory ledger, because the numbers will no longer agree and that looks like an error when it isn't.

Your books value FBA inventory at landed cost, which includes freight, duties and prep. Amazon reimburses lost and damaged units at manufacturing cost, which excludes all three. So a reimbursement for a genuinely lost unit will post below the carrying value of that unit, and the difference isn't recoverable through an escalation. It's the definition.

Two things follow. The write-off on warehouse loss is now larger than the reimbursement line suggests, so if your team has been treating reimbursements as roughly offsetting shrinkage, that assumption needs retiring. And the case for spending money on loss prevention got stronger, because the gap between what a lost unit costs you and what it recovers is now wider than it was before March 2025.

That's a better conversation to have in a planning meeting than in an audit.

What we won't tell you about the size of the drop

You'll find plenty of published figures claiming recoveries have fallen by some specific percentage since the change. We're not going to repeat any of them. They disagree with each other by wide margins, most trace back to recovery vendors with an obvious interest in the number being alarming, and none is auditable against a source you or we can check.

What we can say is narrower and more useful: on the accounts we reconcile, the approved-claim amounts fell after the change, and the accounts where the fall was steepest were the ones with blank cost fields. That is a pattern across a portfolio, not a benchmark, and we'd rather give you a pattern we can stand behind than a statistic we can't.

Why this belongs in your inventory routine, not your finance routine

Most brands treat reimbursements as a quarterly clean-up job. The valuation change argues for the opposite: reconciliation and inventory discipline are now the same work.

If units aren't going missing, there is nothing to value. Tightening inbound accuracy, restock cadence and in-stock rate reduces the number of claims you need to file at all, which is a better outcome than recovering manufacturing cost on a unit you would rather have sold. We worked exactly that problem on a home and kitchen brand that kept hitting Amazon's restock limits: smaller and more frequent orders, daily inventory monitoring instead of weekly, and best-sellers prioritized in every restock decision. Their restock limit went from 15,000 units to over 176,000 and their in-stock rate reached 97%. The full inventory optimization case study walks through the sequence.

The ordering matters. Fix the loss rate first, then reconcile what still slips, then value it correctly. Doing those in the other order means getting very good at claiming for a problem you could have prevented.

Who should reconcile this in-house

Plenty of brands should. Under roughly 50 ASINs with someone who has two spare days a month, pull the inventory, returns, reimbursements and adjustments reports, cross-reference them, and file what you find. The reports are free and the work is tedious rather than difficult.

It stops being an in-house job somewhere north of a few hundred ASINs, or on any catalog with heavy return volume, because the reconciliation stops fitting in a spreadsheet and starts needing to run on a schedule. That's the threshold where paying a percentage of what comes back is cheaper than the hours, and where what an agency engagement costs is worth comparing against the recovery it produces.

Start with the cost fields

Go and look at them today. If they're blank, every lost-and-damaged claim you file from here is being valued by somebody else's estimate of what your product is worth, and you are the only party in that exchange who actually knows the number.

If your catalog is too large to reconcile by hand and you want someone to check the cost fields before the next quarter of claims goes out, book a call. Bring your inventory adjustments report; we'll tell you on the call whether this is worth paying for on your account or whether you should keep it in-house.