Return costs are ignored by almost all Amazon sellers. There are usually two reasons: they don’t really matter and it’s not clear how to count them. The bad news is that usually, they do matter, as in our (real) example in the screenshot. The good news: sellerboard takes all returns into account automatically.
Returns contain not only processing costs and non-refundable costs but also adjustment of already booked profits. Let’s say you sold 1 unit in January and have already booked the profit from this sale in January. If the customer returns the product in February, you should now subtract the previously recorded profit from your February result.
How to calculate returns correctly? sellerboard shows all of the components:
• Product (-1207.99): money refunded to customers for the purchases they returned
• Refund commission (-31.60): Amazon fee for returns handling
• Commission (+157.98): Amazon returned us the refer fee, that they withheld upon sale
• Shipping / Shipping chargeback: refund for the shipping to the customer and to shipping chargeback refund to the seller. The sum is approximately zero, so these positions don’t really matter.
• Product cost (+316.17): if the returned product is “sellable”, sellerboard will calculate the COGS with a plus sign. When the product was sold, COGS for the unit was calculated with a minus. If the unit is returned broken, it’s cost will not be calculated with a plus.
In this list, there is no “FBA fee” that Amazon takes when the product was purchased. This fee is not refundable, that is you pay it when the unit is sold and it’s not reimbursed when it’s returned. As you can see, refunds cost us 770 €, about a third of the profit this month.
sellerboard is an accurate profit analytics service for amazon sellers with additional tools: follow-up mail campaigns, inventory management, reimbursements for lost & damaged stock, PPC optimizer, listing change alerts. All this starting at $15 a month with a free trial.
Get your 1 month of free access to sellerboard using this link.