Some months back, we reported how an ITV investigative team established massive destruction of unsold inventory in one of Amazon UK’s major warehouses. The investigative report drew a lot of flak from within and outside the UK. Experts had projected a staggering scale of the global destruction by Amazon, with a grave impact on the company’s carbon footprint.
Amazon has now structured two programs it plans to deploy to reduce the destruction of unsold inventory to zero. The two programs are part of an effort to give products a second chance at the shelf when they get returned or fail to get sold.
One of the programs will allow third-party businesses on Amazon to resell returned items as used products. The other will allow sellers to recover a portion of their inventory cost from returned items and excess stock, using Amazon’s technology.
The Fulfilment by Amazon programs will help to build a circular economy, according to Amazon. In response to the stringent accusations against the online powerhouse, Amazon had said it is working toward a goal of zero product disposal and that it had stopped the sending of items to landfills.
The first program called the FBA Grade and Resell will allow third-party businesses on Amazon to resell returned items as used products of several levels depending on their condition. The program has already commenced in the UK and will be expanded to the US and other major markets by the end of 2021. fWhen operational, product returns are automatically routed to Amazon for evaluation and categorization. The Used categories are: Like New, Very Good, Good, or Acceptable. After Amazon’s categorization, the seller then fixes the appropriate price for the item based on its condition.
The second program, called FBA Liquidations program, will afford sellers the opportunity to use Amazon’s wholesale resale channel and technology to recover part of their inventory cost from returned items and excess stock. It is already operational in the US, as well as other major markets, although it is billed to commence in the UK before the end of August 2021.
Amazon says the new programs are some of the concrete steps to ensure that products sold on Amazon irrespective of the owners, do not become waste. The moves, when fully operational across the Amazon ecosystem, could yield millions of dollars in savings and massively improve Amazon’s carbon rating.
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