Pixel Envy

Written by Nick Heer.

Amazon Is Trying to Correct Its Waste Problems

You may recall ITV News’ reporting earlier this year that Amazon was destroying over one hundred thousand items every week in just one U.K. warehouse. Many of these products were brand new and only destroyed because it was cheaper than continuing to warehouse them, while others were returns.

A new program launched yesterday by Amazon U.K. is an attempt to correct those problems:

Selling partners who want to resell returned items can take advantage of “FBA Grade and Resell,” which is now available in the UK, and will be available in the U.S. by end of year, and in Germany, France, Italy and Spain by early 2022. This programme gives third party selling partners the option to sell returned products on Amazon as “used” items instead of having them sent back to them or donated.

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“FBA Liquidations” gives sellers the option to use the company’s wholesale resale channel and technology to provide sellers with a way to recover a portion of their inventory cost from their returned or overstock inventory. The programme is live in the U.S., Germany, France, Italy and Spain, and is set to go live in the UK in August. Previously a seller would either need to have returned or overstock inventory sent back to them or let Amazon take care of this product through its FBA Donations programme. Now businesses selling on Amazon have a new hassle-free way to recover value on these items by reselling these items through Amazon’s bulk resale partners.

Sounds great, but there are some caveats worth mentioning. First, Amazon says that there will be processing fees for the FBA Grade and Resell program, though it is waiving those fees until the end of the year. The liquidations program, meanwhile, does not show sellers how much they will make until their products have been sold. And, if Amazon cannot sell the overstock, it is automatically placed back into inventory where storage fees will resume. Most notably, Amazon may have created some alternative channels to give sellers the option to reduce waste, but it does not appear to have disincentivized product destruction.