Amazon's New FBA Policies: More Control, New Challenges for Sellers
Amazon has rolled out significant changes to its FBA inventory management policies, presenting sellers with new options and challenges. The updates, announced in March 2025, include a Damaged Inventory Ownership Program and a revised FBA Inventory Reimbursement Policy, effective from March 31, 2025. These changes aim to provide sellers with more control over their products while also simplifying inventory tracking.
The Damaged Inventory Ownership Program allows sellers to retain ownership of Amazon-fault damaged inventory instead of receiving reimbursements. This means sellers can now manage these units as 'defective' in their unfulfillable inventory, rather than receiving monetary compensation. This shift affects inventory tracking and reporting, with enrolled inventory appearing in unfulfillable inventory with 'Defective' disposition status.
The FBA Inventory Reimbursement Policy has also been updated. Now, compensation for lost or damaged inventory occurring before customer orders is calculated based on manufacturing costs, not retail prices. This change affects inventory eligibility, including Amazon-fault customer returns and Amazon-fault warehouse damaged inventory, subject to various guidelines.
Amazon delayed the original March 10 effective date to March 31, 2025, giving sellers more time to configure their systems. However, as of October 7, 2025, no specific companies have been publicly identified as having opted into the FBA Damaged Inventory Ownership Program. Sellers are currently evaluating their individual circumstances to determine the best participation strategies.
These policy changes are part of Amazon's broader strategic shifts in marketplace governance, following recent updates on product title formatting, category restrictions, and advertising platform modifications. The long-term impact on seller economics remains to be seen, as sellers navigate the complex decision matrices created by these new options. Amazon's Damaged Inventory Ownership Program and revised reimbursement policy aim to provide sellers with more control and flexibility, but also present new considerations for inventory management.
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