How Amazon Warehouse Deals Work For Sellers [2021 Guide]

What Are Amazon Warehouse Deals?

Amazon Warehouse Deals is a service offered by Amazon to re-sell products returned from customers for a variety of reasons: defects, not what they wanted, wouldn’t fit their use case, and more.

Deals via Amazon Warehouse are graded on a 20-point scale which helps consumers identify whether products are new or “acceptable.”

Amazon Warehouse Deals is a service Amazon offers on various products which are returned, damaged, or refurbished, with strong discounts as the main selling point.

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The products are reviewed based on Amazon 20-points quality process and categorized based on their packaging quality. Let’s look at the program closer.

What Is Amazon Warehouse Deals? A Full Overview

Amazon Warehouse Deals is owned and managed by Amazon itself. It includes the damaged, returned, or refurbished products that are fulfilled by Amazon (FBA).

how does amazon warehouse deals work
The Amazon Warehouse Deals section is a popular service offered from Amazon

All products that are returned are not placed back into seller inventory. 

The goods which are in good condition and clear Amazon’s test for quality check are placed under Amazon Warehouse Deals. Through these deals, Amazon provides a great opportunity for consumers to buy quality products at relatively low prices. 

The point we’re making in this article is whether sellers get anything out of these deals and what opportunities lie in Amazon Warehouse Deals for them…

How Does Amazon Warehouse Deals Work For Consumers

warehouse deals conditions very good example
An example of what an Amazon Warehouse Deal looks like from the consumer point of view

Consumers can make purchases from Amazon Warehouse Deals at discounted prices. There are five categories of deals depending on the conditions of the products.

  • Renewed
  • Used – like New
  • Used – very Good
  • And, Used – Good
  • Used – Acceptable

The conditions of all the products are good. If they don’t meet the criteria of Amazon’s 20-point quality check, then they are removed from the marketplace and scrapped. 

The products are categorized based on package and casing damages.

examples of open box amazon warehouse deals
Other Amazon Warehouse Deals products available at lower-than-usual prices

To purchase the products at the discounted prices, customers can directly search for the Amazon Warehouse Deals or look for the deals on the product’s pages. 

Besides the above five conditions, Amazon also has “Open Box” options. It means that the product was sold to a customer and was returned after opening the box.

How Does Amazon Warehouse Deals Work for Sellers?

Sellers working through the Amazon Seller Central are not allowed to sell through Amazon Warehouse Deals.

Amazon deals with warehouse products on its own by identifying those which got damaged, returned, or refurbished and placing it under the Amazon umbrella.

If the products are returned by customers and they pass the 20-point quality test process of Amazon, it is kept by Amazon and a refund is made by the company to the buyers.

Sellers whose products are damaged and listed in the warehouse deals are provided with compensation under the Lost & Damaged policy of the company. 

fba lost and damaged policy page
Amazon’s Lost & Damaged policy safeguards items that are lost or damaged when under Amazon control

The compensation is made by the company only for the products, which are damaged or lost due to Amazon’s mistake. In case the product is having any manufacturing error, then it is not compensated by the company. Under the Lost & Damaged policy, sellers are provided with the returns in the following ways:

  • Pay the seller the replacement value of the product, which is lost or damaged
  • Replacing the sellers’ products with a new product of the same FNSKU

The replacement value offered to the seller is determined through numerous factors, which include:

  • History of the sales generated by seller
  • The average selling price of the product of FBA
  • History of the sales of particular ASIN

In case, the required information is not available, sellers are provided with compensation based on the default replacement policy. To get this compensation, Amazon may demand the product’s purchasing receipt or invoices. This is offered for items less than US $5000 worth.

If the value of items lost or damaged is more than that, Amazon recommends getting products insured.

Does Amazon Warehouse Deals Benefit Sellers? 

You might be wondering that if you are unable to get satisfied customers and the product is also kept by Amazon, then how will the seller benefit from it?

Sellers get an indirect benefit of these deals as they cannot directly sell through Amazon, such as:

  • Instead of bearing all the delivery and shipment cost, Amazon bears this cost for sellers.
  • The reimbursement is made to customers by Amazon directly and Amazon charges for FBA fees only.
  • Sellers do not have to collect the products and send them back to the manufacturer for repackaging. This saves a lot of money as the good after the return is a second-hand product.

Imagine the hustle for the seller who has to pick the product from FBA Centres, send it back to the packaging company, and resend it to FBA Centres. 

Thus, the cost expected to incur in this process is saved by Amazon by offering the products at discounted prices and offering different reasons to customers to purchase the specific products. Customers who are willing to compromise on the package and willing to take the risk to some extent are provided with a quality product. 

Amazon Warehouse Deal Seller Account has a 78% positive rating, which shows that the majority of the customers ended up with quality products.

3 Best Practices To Follow With Amazon Warehouse Deals

Amazon Warehouse deals are a win-win situation for both the customers and sellers. The customers get the best price for the quality product by compromising on the packaging quality. 

While the seller can get their products sold without making extra hustle. Despite numerous benefits of Amazon Warehouse Deals, there are few things to be considered by sellers to avoid any pitfalls.

  1. Sellers should give high consideration to the packaging of their products. The reason is that the products are shipped and delivered to far off destinations. Thus, if the packaging is not of high quality, it will be damaged on the way and resulting in bearing the loss. The packaging can also get damaged while they are placed in Amazon Warehouse while playing in the bays.
  2. You need to ensure that you maintain a complete record of the product’s invoices and receipts. They are compensated based on the value of the product, which is also determined through its purchase price. Thus, make sure that one can maintain the record of these receipts and invoices.
  3. Sellers should always maintain the record for the products placed in FBA. Before they deliver the products, they should confirm the quality of the packaging and get approval to avoid any future claims.

Why You Should Focus On Your Brand First

grow your brand presence on amazon with sunken stone
Sunken Stone helps brands focus more on building a great brand rather than quick-sales tactics

Customers are expected to be as cautious as sellers while making any purchase from Amazon Warehouse Deals.

The reason is that these products are not usually under the manufacturer’s warranty.

To avoid any mishap, it’s important to review a few best practices:

  1. Always review the return policy. Amazon offers a 30-days return policy for the products purchased through Amazon Warehouse Deals.
  2. Look into the cost to return. For the prime members, Amazon offers free cost to return, which gives them the privilege to purchase without any worry.
  3. Look for accessories of the products and ensure that the vital accessories are available, otherwise, it is as useful as a damaged product.
  4. There are different other factors to consider such as the cost of delivery, shipment time, and similar factors, which should be evaluated based on the value of the product and its urgency.

Amazon Warehouse Deals are a great opportunity for the customers to avail.

However, sellers do not benefit much from these deals. They have no control over the products as—once they are listed as a warehouse deal—they are owned by Amazon.

Focusing on your brand first is the best way to benefit from Warehouse Deals because ultimately you don’t want items to end up there, you want them to stay in the hands of people who purchase them, and that’s a measure of retention.

Your brand is key in that equation, just like the quality of your products.

Ultimate Amazon Playbook pdf Sunken Stone

Originally published May 26 2020


Frequently Asked Questions

Can you trust Amazon warehouse deals?

Yes, Amazon warehouse deals are offered and managed by Amazon.com. The company has 20-point quality checks before determining the status of the product.
You also have an option to return the product within 30-days, if you do not get what you expected.

How do you shop on Amazon warehouse deals?

You can shop on Amazon Warehouse Deals by two methods, which are:

1) Visit the Amazon website or mobile app and type Amazon warehouse in the search bar. You can browse through categories and find the specific product, and;
2) You can visit the product’s page and look for warehouse deals by selecting the “New & Used from $X.XX” filter.

Is it worth buying from an Amazon warehouse?

Amazon Warehouse Deals mainly offers products whose packaging is damaged or products that are returned. Most of the products are just like new. You need to go through all the details and images.
You can get your desired product for only a few bucks so it’s definitely worth it to buy from Amazon Warehouse Deals. In case you are a prime member, you can purchase the products and if you do not like the quality of the product you can return it free of cost.

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