Amazon Vendor Shortage Claims - Root Cause Analysis

Shortage claims to Amazon have 8 main root causes.

These root causes are: 

1. Catalogue Setup 
2. Vendor Lead Time
3. Delivery Compliance 
4. Inbound Receive 
5. Loss Prevention 
6. Labelling 
7. Invoicing 
8. ASN (Advance Shipment Notification). 

These constitute the main factors that can cause a shipment to be shorted. There are other factors to consider, such as smart matching artefacts, but these are the major factors to identify first.

You might find that some or none of these factors apply to you - or you have already been thorough on all these points. If this is the case we recommend using a dedicated reclamation service (just send us a form with this request).

1) Catalogue Setup Mismatch

Example: You send a case pack of 6 but in Amazon the case is setup as a case of 4. This will mean they could short you for 2 units even though you did ship 6. (The invoice and PO will say 6 units, but they think they only got 4). 

Tips: 

• Ensure barcodes are linked to only 1 ASIN, avoiding use of the SKU in preference to the GTIN or ASIN where possible.  
• Ensure Case pack quantities are correct. 
• Ensure unit of measure on invoices matches to the PO.
• Ensure the barcode displayed on the carton you are shipping is one that Amazon know about and is setup correctly. 

 

2)  Vendor Lead Time

Explanation: PO gets auto cancelled by Amazon's systems before the delivery is fully received and matched against an invoice. When a PO is delivered to Amazon, it takes some time for those items to be received into their inventory systems. If this receive process is not complete by the time the invoice is due, the invoice will trigger a shortage claim. This can in part be due to slow processing on the part of the vendor, the so called "Vendor lead time". 

Tips:

• Confirm POs within 24h of receipt.
• Keep Amazon up to date with what to expect in the ASN by cancelling any non-shipped items. (related: down confirm PO on time Accuracy Chargebacks).
• Consider using an Amazon preferred carrier to help with the booking-in process. 
• Work with your carrier to ensure they book a delivery slot via CARP within the delivery window.  
• Only raise invoices once the shipment is sent (see point 7 below). 
• Use License plate receive (point 4) to increase the receive speed of inbound shipments. 

3) Delivery Compliance 

Cause: Delivery mistakes leading to delays and receipt errors. 

Tips:

• Only ship POs that are live, and dispatch in 1 ASN per order where possible. Avoid multiple ASNs per PO, however POs must be split over multiple ASNs when >1 truck load is required.
• Work with your carrier to ensure they request 1 booking per delivery. If the first desired slot is changed, the courier needs to rebook from that reference rather than making a new booking.
• Adhere to FC delivery guidelines eg Hazmat warehouses must be used for hazmat products. 

4) Inbound Receive 

Cause: Inefficient / Manual receive processes result in miscounting of inventory. When a carton arrives at Amazon's FCs, they scan items in and receive them against a PO. if the carton label is unreadable or not license plate receive compliant, the carton will be broken down and individual items scanned. This can lead to variances between the shipped number and the received number. For more information on this topic we recommend the training videos within Amazon Vendor under Support - Training - Operations - "Receiving your shipments efficiently" and "License Plate/GTIN Goldlist Receive".

Tips: 

• Implement License Plate Receive (LP) with the use of Serial Shipping Container Codes (SSCCs). 
• Implement an EDI system to communicate carton level information in the ASN EDI message. 
• More info: Read "SSCC vs GTIN Receive, which is right for me?"

5) Loss Prevention 

Cause: Theft or loss in transit. More common on high value, small products. 

Tips:

• Audit your carriers and work with them on loss investigation.
• Use Security tape, sealed containers or GPS trackers in shipments.
• Use a variety of carriers to cross examine your loss across different supply chain routes. 

6) Labelling 

Cause: Case or single barcode labels causing errors in receive process. Amazon might accidentally scan the internal item in a master pack and receive the case pack as a single unit, if the internal barcode is visible from the outside. 

Tips:

• Do not include the barcode for Single Items on the Outer/Master pack. If the item is configured in VC that the 'single' barcode is a case pack, then correct the VC listing or otherwise ensure the correct barcode matches what is shipped and displayed.
• Ensure labels inside the master pack are not exposed to scanning (for example if the master pack has a transparent wrapper, an internal code may be scanned instead of the master barcode). 
• Ensure labels are clear, not over seams, have no creases, bleeding or crumples.
• Try to reduce the barcodes and labels on each carton as much as possible to reduce scanning errors. 

7) Invoicing 

Cause: Invoice raised for inventory that was not delivered or a long time after the shipping window. When the invoice is due, if the items have not been received, this is when the shortage claim will be triggered. So if you raise the invoice very early in the process, or at a time that is not near the shipping window, you could end up generating a shortage claim. Double invoicing for a PO also causes a similar problem. 

Tips:

• Confirm purchase orders via EDI or in Vendor Central with the correct inventory status for products you intend to ship. 
• Pack and ship orders, then invoice. Do not invoice before the order has left your premises - the ideal would be on the date the shipment is delivered, but in practice the day the shipment departs is also usually OK. 
• End-to-end EDI invoicing can minimise human errors. 
• If making multiple ASNs per PO, ensure you do not double-invoice for items on purchase orders. 

8) ASN (Advance Shipment Notification).

Cause: ASN was inaccurate, so receive process is not a true reflection of what was shipped.

Best practice:

• ASNs must be provided for all shipments arriving at Amazon.
• ASN information must match the PO and Invoice data.
• Include the SSCC data for each carton in the ASN data fields.
• If there are reductions to the PO at the stage of the ASN, reduce the quantity on the PO when the ASN is shipped. 

 

KhooCommerce provides an optimal framework to confront these problems. 

We have designed KhooCommerce to specifically counteract many of these issues, ensuring your POs and shipments maintain compliance all the way through their journey. Our carton labels are fully SSCC and License Plate complaint, GS1 Accredited, and we only produce one Amazon label per carton. Packing items can be done with a scanner, tablet and allow your warehouse to pick and pack amazon labels on the floor directly into the cartons and print the labels immediately. 

We have other inbuilt mechanics, such as automatic invoicing, PO adjustment on ASN, multiple PO adjustments, re-packing and ASN adjustments, permission user-gated access for warehouse staff, and detailed reports on sales and stock levels. 

For other charges and disputes that are beyond system level, we work with specialised recovery partners that have rich experience getting your cases resolved. 

We'd love to hear from you. Send us a contact form and we'll find a time to chat.