If you sell through Amazon FBA, you know the feeling:
One day you’re auditing your inventory—and you notice some of your products have mysteriously vanished, been damaged, or otherwise gone missing inside Amazon’s massive warehouse network.
Good news:
👉 Amazon will usually reimburse you for lost or damaged inventory.
Bad news:
👉 You may not get the full value unless you properly document your Cost of Goods Sold (COGS).
In this blog post, I’ll break down:
✅ Why adding your COGS matters for Amazon reimbursements
✅ What happens if you don’t input your COGS
✅ Step-by-step instructions for adding Cost of Goods inside Seller Central
✅ Tips to maximize your reimbursement claims and protect your profitability
Let’s make sure you’re getting every dollar you deserve!
🧠 Why Cost of Goods (COGS) Matters for Reimbursements
When Amazon loses or damages your inventory under FBA, they typically reimburse sellers based on:
- The average selling price of the product over a recent time period or
- The Cost of Goods Sold (COGS) you have documented in your account
If you don’t have COGS entered, Amazon uses its own formula based on marketplace averages—which usually works against you.
You could end up with a reimbursement that’s far less than:
- What you paid to manufacture or purchase the item
- What you could have earned selling it
- What it actually costs you to restock
By entering your real COGS information, you help Amazon reimburse you more fairly and more quickly.
🚨 What Happens If You Don’t Enter Your COGS?
If you don’t upload your Cost of Goods data:
- You may receive a lower reimbursement amount than your product is worth.
- Amazon will rely on marketplace averages, which can fluctuate wildly (and often don’t favor you).
- It can cause delays in reimbursement processing.
- You lose leverage if you need to appeal or challenge the reimbursement decision.
Bottom line:
No COGS = less money back in your pocket.
📈 Benefits of Properly Adding Your COGS
✅ Higher reimbursement amounts
✅ Faster resolution of lost/damaged claims
✅ Better internal inventory and financial tracking
✅ Stronger documentation in case of audits
✅ Easier tax reporting (COGS ties into gross profit calculations)
It’s a simple step that pays off big when something goes wrong.
🛠️ How to Add Cost of Goods for Amazon Reimbursements (Step-by-Step)
Ready to set it up correctly? Here’s exactly how to do it inside Seller Central:
Step 1: Prepare Your COGS Information
Before you jump into Amazon’s system, gather this info for each SKU:
- SKU (Stock Keeping Unit)
- ASIN (Amazon Standard Identification Number)
- Cost of Goods (your true landed cost) — this includes:
- Manufacturing costs
- Packaging
- Shipping (if you include it)
- Duties and taxes (if applicable)
Important:
Use the landed cost per unit — not just the factory price.
Step 2: Navigate to the “Manage Inventory” Section
- Log into Seller Central.
- Go to Inventory > Manage Inventory.
Here you’ll see a list of all your active SKUs.
Step 3: Download the Inventory Report Template
Rather than updating COGS manually one-by-one (which is tedious), use the bulk upload method:
- Click Inventory > Add Products via Upload.
- Select Download Inventory File.
- Choose the correct template for your product category. (Usually “Inventory Loader” or “Category-Specific Templates.”)
- Download the Excel (.xlsx) template.
Step 4: Fill In the COGS Fields in the Template
Inside the template:
- Find the columns labeled cost-price or item-cost (depends on the template version).
- Input your Cost of Goods for each SKU.
Important notes:
- Enter the cost as a number only (no dollar signs).
- Keep it consistent (e.g., don’t mix landed cost and factory-only cost).
- Double-check that the SKU and ASIN match your catalog exactly.
Step 5: Save and Upload the Updated File
After filling out your costs:
- Save the file in the required format (usually .txt or .xlsx).
- Return to Seller Central > Inventory > Add Products via Upload.
- Upload your completed file.
Amazon will process the file and update your SKUs accordingly.
Note:
It can take a few hours for updates to reflect fully.
Step 6: Confirm Your COGS Are Active
After uploading:
- Go back to Manage Inventory.
- Check the SKUs and ensure the Cost field shows your entered values.
Congratulations—you’ve now protected yourself for future reimbursements!
🧹 Pro Tips for Managing Cost of Goods on Amazon
✅ Update Regularly:
If your cost of goods changes significantly (due to supplier changes, freight rates, tariffs, etc.), update your COGS in Seller Central.
✅ Keep Records:
Maintain backup documentation (invoices, purchase orders) in case Amazon requests proof during a claim investigation.
✅ Be Consistent:
Always use landed cost as your standard—don’t switch back and forth.
✅ Audit Periodically:
Set a calendar reminder to review your COGS every quarter or after major inventory purchases.
✅ Don’t Overinflate:
Trying to claim inflated COGS could get your reimbursement claim denied—or worse, flag your account for review.
📋 What Amazon Considers During Reimbursement Calculations
When reimbursing for lost or damaged FBA inventory, Amazon considers:
- Your sales history for the ASIN
- The average selling price
- Recent sales trends
- Any uploaded Cost of Goods data
- The product’s current marketplace value
Best-case scenario:
When you have strong, accurate COGS input, Amazon can quickly verify reimbursement amounts based on your provided cost—and you avoid lengthy appeal processes.
🛡️ What If Amazon Still Offers a Low Reimbursement?
Sometimes—even with proper COGS—Amazon may issue a lower reimbursement than you expect.
✅ Open a Case:
Go to Help > Get Support and open a case with FBA support.
✅ Provide Evidence:
Upload supplier invoices, payment receipts, or shipping documentation proving your COGS.
✅ Be Persistent but Professional:
Most claim denials happen because sellers either don’t provide strong documentation—or give up too soon.
Persistence, politeness, and proper paperwork usually win.
🧠 Quick FAQ About Adding COGS for Reimbursements
Q: Does Amazon always reimburse based on my COGS?
A: No. They consider multiple factors, but uploading your COGS increases the chances of a fair payout.
Q: How often should I update my COGS?
A: At least quarterly—or any time your costs change by more than ~10%.
Q: Is adding COGS required?
A: No, but if you skip it, you’ll likely receive lower reimbursements when Amazon loses or damages your inventory.
✍️ Final Thoughts: Protect Your Profits, Act Like a Pro
If you’re serious about growing an Amazon business sustainably, every dollar matters.
Don’t let Amazon (or anyone else) undervalue your hard-earned inventory.
Adding your Cost of Goods:
✅ Ensures better reimbursement payouts
✅ Strengthens your case in disputes
✅ Supports smarter financial management
✅ Positions you like a true professional brand
It’s a simple, one-time setup that pays off whenever life (or logistics) gets messy.
Protect yourself—and your profits—today.
Need help managing your Amazon FBA reimbursements, inventory, or profitability strategies?
At Marketplace Valet, we help sellers grow smarter with systems designed for long-term success.
📩 Let’s talk about scaling your Amazon business profitably!
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