Amazon is making changes to the way it deals with products that get returned to businesses that sell items on its platform or fail to get sold in the first place.
The e-commerce giant is launching two “Fulfillment by Amazon” programs that are intended to make it easier for businesses selling on Amazon to resell customer-returned items or overstock inventory while also giving more products a second life. The move comes following backlash after a report from Britain’s ITV News that Amazon was destroying millions of items of unsold stock at one of its 24 U.K. warehouses.
Amazon said the new programs reflected its commitment to both small businesses and sustainability by providing another way for sellers to profit from selling on Amazon while helping to build a circular economy. Once fully rolled out, the programs are expected to give more than 300 million products a second life each year, the company said.
The first program, FBA Liquidations, gives sellers the option to use Amazon’s existing wholesale liquidation partners and technology to recoup potential losses on returned and overstock inventory. The program is now live in the United States, Germany, France, Italy and Spain and will start soon in the U.K.
Prior to this program, a seller would need to have these items sent back to them or have Amazon donate the product on their behalf.
The second program, called FBA Grade and Resell, gives third-party sellers the option to sell returned products on Amazon as “used” items instead of having the items sent back to them or donated. The price of the item will be based on the product's condition. The program is starting in the U.K. but is coming to the U.S. by the end of the year, with other markets to follow.
When an item is returned, sellers can choose to automatically route it to this new program. Amazon will then evaluate the item and assign it one of four standard conditions: Used - Like New, Used - Very Good, Used - Good, and Used - Acceptable. Sellers then set the price for items based on the condition and manage pricing, advertising, and sales using their existing processes, just as they do for their new items.
“Customer returns are a fact of life for all retailers, and what to do with those products is an industry-wide challenge,” said Libby Johnson McKee, director, Amazon WW returns, ReCommerce and sustainability. “These new programs are examples of the steps we’re taking to ensure that products sold on Amazon—whether by us or our small business partners—go to good use and don’t become waste.”
Last year, Amazon rolled out FBA Donations, which allows its selling partners to donate their returned or overstock inventory. The entire process is “hands off” for sellers—from coordination to delivery. Amazon uses its supply chain and operational expertise so that the right items get to the right pre-vetted charity partners to help more people in need benefit. Since the program’s launch, Amazon has helped sellers donate over 67 million items such as household and school supplies to recipients through our charity partners, including Good360, Age UK, Secours Populaire, and more.
These programs are just several of the many sustainability initiatives across Amazon, including The Climate Pledge—the company’s commitment to net zero carbon by 2040, and 100% renewable energy by 2025.