Update to Amazon's Sourcing Cost Policy for Reimbursements
- Ridgeline Insights
- Apr 16
- 2 min read

Amazon's approach to reimbursing sellers for lost or damaged inventory is changing significantly. Following our January announcement about Amazon's new "Sourcing Cost" policy, we've been testing the system extensively to understand how it works in practice. This update shares our findings and provides strategic guidance to help you navigate these changes with minimal disruption to your business. The information below reflects our hands-on experience with the new system and highlights important deadlines, tools, and best practices.
Important Dates & Background
New effective date: March 31, 2025 (postponed from March 10)
30-day waiting period: Required between denied requests and resubmission
Policy announced: January 2025, with subsequent modifications
What's Changing
Amazon is replacing previous reimbursement values with "Manufacturing Cost" (or "Sourcing Cost") for inventory lost or damaged in their possession. This affects all pre-customer order reimbursements, including inventory damaged in warehouses and items lost during the fulfillment process.
New Tools & Resources
Inventory Defect and Reimbursement portal: Review reimbursement status by type and value
Manage Your Sourcing Cost page: Update and review sourcing costs for your catalog
Bulk Update functionality: Available in the upper right corner of the Sourcing Cost page
Our Testing Results
Prioritization Strategy
Focus first on SKUs in these reimbursement categories:
Eligible for Claim
In Progress
Warehouse Operations
Review any open seller support cases for missing inbound units (Lost Inbound)
Documentation Requirements
Be prepared to submit supporting documentation for most requests
Ensure invoices are less than one year old
Follow Amazon's specific requirements for acceptable documentation
Expect approximately 1-day processing time for documentation review
Approval Patterns
Requests significantly higher than Amazon's estimate are more likely to be denied
Requests exceeding 100% of Amazon's estimate were all denied
Lower percentage increases have higher approval rates
Invoices over one year old were consistently rejected
No clear threshold exists for percentage increases (except the 100% ceiling)
Ongoing Monitoring & Best Practices
Amazon will periodically "refresh" sourcing cost estimates (status: "Scheduled Update")
Regular review of your Sourcing Cost page is recommended
Consider coordinating with manufacturers to document actual sourcing costs
Keep recent invoices organized and readily available for verification
Develop a systematic approach for high-value or frequently reimbursed items
Financial Impact
This policy change could significantly impact reimbursement values, especially for sellers with higher manufacturing costs than Amazon's estimates. Proactive management of your sourcing cost data will be essential to maximize reimbursement amounts.
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