Amazon forces sellers to divulge COGS, won't reimburse other costs

I had one of the largest retailers to reach out to my company with an interesting problem. Given a weight and ingredients of packaged food they wanted to predict the content of each ingredient so that they could calculate the suppliers COGS so that they could use it as negotiating leverage against the suppliers...

From an amazon employee reply in the thread:<p>&quot;When we say “Manufacturing cost”, it means your cost to source a product from a manufacturer&#x2F;wholesaler&#x2F;reseller, or produce the item if you are the manufacturer. You can provide the proof of your cost of sourcing and we will reimburse you accordingly. If you do not wish to provide your cost, we will provide our cost estimate and we will reimburse you for it. We calculate our estimate by evaluating the sourcing cost of comparable products sold by Amazon, by other sellers, and through other wholesale channels.<p>It excludes costs such as shipping, handling, customs duties, or other costs.&quot;<p>You could possibly try setting up your own &quot;reseller&quot; entity, where they act as an in-between, handling the shipping costs, etc and then reselling it to upon arrival for near the price sold?

I remember reading in Reader&#x27;s Digest in the 1990s that if you&#x27;re in a store and you break something which the merchant asks you to pay for, you should offer to pay their cost to replace the item, which is of course often much lower than the sticker price.<p>Later in life I wondered whether this was really fair, as things cost money to order, process, and store. (Though this is normally baked into retail pricing in the markup and also there is normally an accounting allotment for shrinkage.)<p>Later still I realized that this was perfectly fair! It&#x27;s an opening point in a negotiation.

I was confused about this, here&#x27;s how I understand it now:<p>Previously when Amazon lost or damaged items in their warehouses, they would reimburse sellers the full sales price. Starting March 2025, Amazon will only reimburse the manufacturing cost of lost or damaged items. Sellers have to either accept Amazon&#x27;s estimated manufacturing cost or provide documentation of their actual manufacturing costs.

This seems like an invitation to file an LLC that pays your other LLC 99.7% of the price and resells it for a 0.3% margin, then show them that invoice when asked for COGS.

What&#x27;s to stop sellers from lying or fudging the numbers in a realistic direction? Either way, this seems bad and I can&#x27;t see how it would help with trust.

“Your margin is my opportunity” - Bezos

Title is misleading; this only applies to items that are lost&#x2F;damaged prior to being sold.<p>“For items that are lost or damaged after a customer order in Amazon’s store, we’ll continue to reimburse you for the sales price on the original order minus applicable fees”

All great empires fall, often due an accumulated effect of dumb policy decisions. Ergo, Amazon&#x27;s grip on market will eventually fail by dumb policy decisions... and this is almost certainly one of them.

Dance with the devil...

Amazon was previously reimbursing other costs?

Selling on Amazon the last years has been hell.