Amazon moves to reduce product waste after accusations of destroying unused goods
Amazon has introduced two new programmes aimed at helping third-party businesses selling through its platform to resell returned items and excess stock, shortly after it was accused of destroying these products from UK warehouses.
The first of the new schemes is called ‘FBA Grade and Resell’. It enables third-party sellers listing on Amazon to relist them on the website as “used”. Previously, they would need to choose between having them returned directly to them from Amazon’s warehouses or having them donated. Products will now be graded in terms of condition by Amazon staff before they are listed as used.
FBA Grade and Resell launched in the UK this week and will be launched in the US by the end of 2021. Launches in 2022 will then follow in Spain, Germany, France and Italy. The grades are ‘used, like new’, ‘used, very good’, ‘used, good’ and ‘used, acceptable’.
The second programme is called ‘FBA Liquidations’. It gives sellers the option to use Amazon’s resale channels to sell of returned items or overstock in bulk. Previously, sellers would either need to manage returned and overstock items themselves or request that they be processed through Amazon’s donations channels. The new options, Amazon claims, will help sellers to recoup more value.
FBA Liquidations has launched in the US, Spain, Germany, France and Italy this week and will launch in the UK later this month. Amazon has not provided any information, at this stage, about the launch of FBA Liquidations of FBA Grade and Resell in other markets.
The launch of both schemes by Amazon comes after an ITV investigation found evidence that the e-commerce giant was destroying returned and unsold items from its Dunfermline warehouse. ITV heard evidence that staff were set targets on how many items to destroy, which sometimes reached as many as 130,000 items in a month. Amazon has insisted that no items go to landfill in the UK, instead being sent for sale or recycling.
“Customer returns are a fact of life for all retailers and what to do with those products is an industry-wide challenge,” Amazon‘s director of returns, recommerce and sustainability Libby Johnson McKee said.
“These new programmes 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. Along with existing programmes like FBA Donations, we hope these help build a circular economy and reduce our impact on the planet.”
To McKee’s point, a 2019 study from NRF found that 30% of purchases made online are returned and less than half of these returned items are resold. By some estimates, returns are costing the global retail sector the best part of $400bn each year. Costs largely come in the form of shipping and handling. There is also the fact that, the longer an item stays out of circulation, the more it usually decreases in value. In other words, if retailers do not have rapid returns processes, they quickly lose money on the goods, meaning it is sometimes cheaper to donate or destroy them than to relist them.
Amazon claims that it has enabled third-party sellers to donate more than 67 million products to charitable organisations globally since 2019. Partners in the UK include Age UK, Barnado’s, the British Heart Foundation and Cancer Research.
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