AccountingCFOSmall Business

Amazon’s decline can hurt the CFO’s reputation

An article in today’s Wall Street Journal talks about failure of Amazon to maintain quality control over its retail network. I wish it had been published two months ago.

I was ‘late to the party’ in adapting Amazon as a preferred provider of supplies for my small business clients but finally made that commitment this summer of 2019. I act as a part-time CFO to these businesses, mostly small nonprofit organizations. I typically pay for various goods and services and then bill the clients to be reimbursed for those costs.

The first business to make an online purchase though Amazon placed that order in mid-July. Amazon fulfillment services split that order into three parts. One part of the order was delivered as expected but the other two were not delivered as of date of this post more than six weeks later. It is possible that they will be delivered soon; that’s what the troubleshooting indicates.

All three parts of the order were paid in advance. The first complaint raised by the business was that they did not want to reimburse me before delivery was made. As a practical matter that meant that I was responsible for the unplanned expenses related to tracking the missing orders, contacting carriers and making alternate arrangements.

What I found was a complete lack of willingness to take responsibility for the missing orders from Amazon, the seller and the shipper. Tracking down this no response took significant time and effort. No official explanation was given for the listed status of “delivery attempted” but our regular UPS driver mentioned that a substitute driver was unable to find the address. This triggered us to repaint the faded road sign and mailbox numbers. Even without this, the driven should have been able to rely on GPS or mapping services.

The second problem I faced was that small business clients are unwilling to pay for assistance tracking purchase. I presume there are ways to automate this task but haven’t looked into it.

The lesson I learned was that we need to address the handling of risk on nondelivery in our CFO engagement agreement. Both the cost and responsibilities should be addressed. The verdict is still not in on whether Amazon can be a profitable as a small business purchase platform in the long tun.

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