Why Amazon FBA Reimbursements Are Paying Less Now: The Sourcing Cost Mechanism Explained

If you’ve taken a close look at FBA reimbursements over the past couple of years, you’ve probably noticed something:

Reimbursements no longer resemble selling prices — they look more like costs.

This isn’t an illusion. Many sellers are getting reimbursed less not because they don’t know how to open a case, but because they’re still applying the old “reimbursement based on selling price” mindset to new rules.

Key Takeaways

1. The underlying logic of FBA reimbursement has shifted to sourcing cost
2. If you don’t proactively provide a sourcing cost, Amazon will use its own estimate
3. Sourcing cost is not the same as your all-in cost
4. Many low reimbursement issues are actually rooted in what happened before the loss occurred

Why Many Sellers Feel They’re Getting Less

Sellers tend to focus on:

• How much the item sells for
• How much revenue they lost
• What their total investment was

But under the new rules, what matters more is:

• Whether this FNSKU has a sourcing cost on file
• Whether that sourcing cost has been correctly recorded in the system
• If it hasn’t been recorded, what logic Amazon will use to estimate the value
• If you disagree with the amount, whether you’re still within the re-evaluation window

What Exactly Is Sourcing Cost?

Sourcing cost is the product acquisition cost — the cost of purchasing the goods — not the total cost of getting them all the way into an Amazon warehouse.

In other words, it’s not the landed cost you’re familiar with, and it’s certainly not the all-in cost.

What Happens If You Don’t Submit a Sourcing Cost?

If you don’t provide a sourcing cost, Amazon will process it using its own valuation logic. And that valuation may not align with your actual procurement structure.

Why “Manage Your Sourcing Cost” Has Become a Critical Entry Point

Under the new system, a more accurate way to think about it is:

The outcome of a reimbursement is often half-determined — before the loss even occurs — by whether you’ve maintained your sourcing cost.

4 Common Mistakes New Sellers Make

1. Treating landed cost as sourcing cost
2. Only thinking about sourcing cost after the reimbursement has been issued
3. Assuming that “having an invoice” automatically means “they’ll reimburse at my stated amount”
4. Assuming that an approved sourcing cost means you never need to verify it again

The Right Troubleshooting Sequence When a Reimbursement Amount Is Wrong

1. First, confirm which policy phase this reimbursement falls under
2. Confirm whether the FNSKU has the correct sourcing cost on file
3. Confirm whether your understanding of “cost” matches the platform’s definition
4. Then proceed with a valuation dispute or re-evaluation

Conclusion

It’s no longer primarily a reimbursement issue understood through a selling-price mindset — it’s a process issue understood through a sourcing cost mindset.