Amazon’s Grade and Resell Program: Fees, Eligibility, Strategy and Profit Potential

April 4, 2025
Amazon’s Grade and Resell Program
Reading Time: 8 minutes

Returns are an inevitable part of online selling, and for many Amazon sellers, returned inventory often leads to lost revenue, higher storage costs, and a constant struggle to maintain profitability. Discarding or removing unfulfillable units feels like burning money.

At KwickMetrics, we work closely with Amazon sellers to optimize profitability at every stage of the sales cycle—including what happens after a return. We’ve analyzed Amazon’s Grade and Resell Program in detail, including the hidden costs, pricing strategies, and best practices to help you get the most out of this underutilized feature.

In this blog, we’ll walk you through exactly how the Grade and Resell Program works, break down Amazon’s pricing structure for relisting returned products, and share actionable insights on how to turn potential losses into sustainable profits—all backed by clear data and strategic recommendations from the KwickMetrics team.

What is Amazon FBA Grade and Resell?

The Amazon Grade and Resell program is designed to help sellers recover value from returned FBA inventory that’s no longer “new” but still in sellable condition. Instead of automatically labeling such items as “unsellable” or liquidating them at a loss, Amazon grades the returned product and allows sellers to resell it at a discounted price under “Used – Like New”, “Used – Very Good”, etc. conditions.

✅ Why it matters: 

Using Grade and Resell, sellers recover revenue, reduce write-offs, and optimize inventory efficiency.

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How to Prepare and Manage Products for Amazon’s FBA Grade and Resell Program?

Successfully using Amazon’s Grade and Resell Program requires sellers to automate their submission process, allow Amazon to grade returned items, and manage resale pricing and tracking. Here’s how the process works:

Step 1: Submit your unfulfillable inventory

As of March 21, 2022, Amazon no longer accepts manual removal orders for Grade and Resell. Sellers must enable automated unfulfillable settings to participate:

  • Navigate to Settings > Fulfillment by Amazon.
  • Scroll to Automated unfulfillable settings and click Edit.
  • Enable the option: Grade and Resell.
  • Set your default discount percentages for each used condition.
  • Optionally, exclude up to 2,000 ASINs that you don’t want enrolled.

Once enabled, all eligible returned FBA units stored in participating fulfillment centers will be automatically evaluated for resale. New inventory cannot be manually added or replenished for this program.

Step 2: Amazon Grades Returned Inventory

Amazon uses a multi-point inspection process to evaluate each returned item. The evaluation includes:

  • Matching the product to its catalog listing
  • Checking for missing parts, accessories, or cosmetic damage
  • Testing usability and functionality based on category
  • Wiping data for tech products and cleaning where required

Based on this inspection, items are assigned one of the following conditions:

  • Used – Like New

  • Used – Very Good

  • Used – Good

  • Used – Acceptable

If the item does not meet the standards for any of these conditions, it is marked Unsellable and returned to your unfulfillable inventory.

Step 3: Track Graded Inventory Status

You can monitor the progress and outcomes in two ways:

  • For manually removed inventory (prior to the March 2022 policy), use the Removal Order Detail report.
  • For automatically submitted inventory, refer to the Grade and Resell report, which includes fields like ASIN, FNSKU, MSKU, unit status, condition, and more.

This allows sellers to stay on top of relisting activity and potential inventory gaps.

Step 4: Set Pricing & Manage Listings

Each graded item is assigned a new SKU with the prefix amzn.gr and a suffix based on condition (LN, VG, GD, AC). You can:

  • Configure discount percentages relative to the new item’s price in the Automated unfulfillable settings.
  • Modify prices manually at any time in Manage Pricing.
  • Monitor listings through standard inventory reports.

Once out of stock, these SKUs are automatically deleted. If a similar item returns later, Amazon will generate a new SKU using the same condition and defect criteria.

Step 5: Track Sales and Payments

Grade and Resell orders can be tracked like regular FBA sales:

  • Use Fulfillment > All Orders or Customer Shipment Sales Report to view sales with the amzn.gr SKU prefix.
  • Financial details, including processing fees and payments, are found under Reports > Payments.
  • Filter by Transaction type: Grade and Resell fees for processing costs and Order payment for actual sales.

Advanced analytics for Grade and Resell performance are available under Inventory > Analytics.

Step 6: Manage Reviews and Returns

Grade and Resell listings are subject to standard FBA return policies. If a buyer returns an item:

  • It will be re-graded if eligible.
  • If not, it returns to unfulfillable inventory.
  • If deemed defective, Amazon may waive the processing fee as a courtesy.

Customer reviews for Grade and Resell listings roll up to the parent ASIN but do not affect Account Health metrics. Feedback and ratings can be managed as you would for new listings.

Sellers can monitor voice of the customer metrics via:

Example Pricing Based on Condition

Condition
Discount %
New Price
Old Price
SKU Format Example

Like New

95%

$50

$47.50

amzn.gr.[seller-msku]-[defect]-LN

Very Good

85%

$50

$42.50

amzn.gr.[seller-msku]-[defect]-VG

Good

80%

$50

$40.00

amzn.gr.[seller-msku]-[defect]-GD

Acceptable

75%

$50

$37.50
amzn.gr.[seller-msku]-[defect]-AC

 

Note: Discount percentages and price rules are set by the seller in their automated settings and only apply during the initial listing. Prices must comply with Amazon’s Fair Pricing Policy.

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How Does FBA Grade and Resell Work?

Here’s a step-by-step breakdown:

  • Customer returns an item to Amazon.
  • Amazon inspects and assigns a grade: Used - Like New
    Used - Very Good
    Used - Good
    Used - Acceptable
  • If you're enrolled, Amazon automatically relists the product under the graded condition and updates the offer.
  • You set pricing rules based on each grade (optional).
  • The product appears in your FBA listings with the updated condition.

💡 KwickMetrics Tip:

Monitor resale performance and compare margins of new vs graded SKUs using our Product-Level Profit Tracking Tool.

Who Is Eligible for the FBA Grade and Resell Program?

Participation in the Amazon FBA Grade and Resell Program is currently limited to sellers who meet specific criteria set by Amazon. Here’s what you need to qualify:

  • 1. Fulfilled by Amazon (FBA) Sellers Only: This program is exclusively available to sellers using the FBA fulfillment model. If you fulfill orders yourself (FBM), you are not eligible.
  • 2. Professional Seller Account: You must have an active Professional selling account on Amazon to participate. Individual seller accounts are not eligible.
  • 3. Seller Location: The program is currently open to US and non-US sellers who sell in the US.
  • 4. Invitation required: Participation in the program is by invitation only.
  • 5. Fulfillment Center Location: The returned FBA inventory must be located in Amazon fulfillment centers that are enabled for the program.
  • 6. Enrollment Requirement: Sellers must actively enroll in the Grade and Resell Program through their Seller Central dashboard. It’s not automatic—you have to opt in.

How to Register for the Grade and Resell Program?

Step 1: Log into Amazon Seller Central.

Step 2: Go to FBA Settings

Step 3: Click on "Grade and Resell"

Step 4: Opt-in and choose pricing preferences for graded products

Step 5: Save your preferences and activate the program

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How to Start selling with Amazon Grade & Resell?

  • Register as an Amazon Seller: Ensure you have an active Amazon seller account and are eligible to participate in the Grade & Resell program.
  • Source Products from Amazon's Returns Inventory: Amazon provides access to returned and graded products, allowing you to choose items based on your budget and niche.
  • Evaluate the Condition of Products: Before reselling, carefully review the grading provided by Amazon and consider testing or refurbishing products if necessary.
  • Optimize Listings with Accurate Descriptions: Provide clear product descriptions, including the grade and condition details, to build trust with buyers.
  • Set Competitive Pricing: Research the market to price your graded products competitively while ensuring a profitable margin.

What Products Are Eligible for Amazon's FBA Grade and Resell Program?

Not every returned item qualifies for the Grade and Resell program. Amazon has strict eligibility rules to ensure safety, quality, and compliance. Here’s what you need to know:

  • ✅ General Eligibility: Only customer-returned FBA inventory stored at Amazon fulfillment centers enabled for this program is eligible. As of now, participation is limited to these specific fulfillment centers, with plans to expand coverage over time.

    Eligibility is also subject to:
    1. Legal, safety, and regulatory standards
    2. Amazon’s internal grading criteria (Used – Like New, Very Good, Good, or Acceptable)

  • ❌ Ineligible Products The following items cannot be enrolled in the Grade and Resell program:

    FBA prohibited products

    Expiration-dated items (e.g., perishable goods)

    Meltable inventory

    Hazardous materials (hazmat)

    Products/categories requiring approval (e.g., gated categories)

    Recalled or counterfeit products

    Items priced under $13 – to ensure cost-effectiveness

    Products that can't legally or practically be sold as "used"

    Items not meeting Amazon's used condition grading standards

    Consumables (e.g., food, supplements, personal care)

    Heavy or bulky items that are not economically viable to process

    Products with consistently poor buyer feedback when resold

💡 KwickMetrics Tip:

Before enrolling, review your catalog and identify SKUs frequently returned but still in good condition. These are your best candidates for profit recovery through the Grade and Resell program.

Fees Charged for Amazon FBA Grade and Resell Program

Sellers are charged a flat per-unit processing fee based on the item’s size and weight when it is successfully graded and relisted. The fee structure is as follows: 

1. Standard-Size Items:

  • Small Standard-Size (≤16 oz): $1.50 per unit
  • Large Standard-Size (≤21 lb): $1.80 per unit

2. Oversize and Special Handling Items:

  • Small/Medium Oversize (≤151 lb): $2.65 per unit
  • Large/Special Oversize (>151 lb): $4.10 per unit

These fees cover Amazon’s costs for inspecting, repackaging, and relisting the items. If an item is deemed unsellable and not relisted, no processing fee is charged, and the item remains in your unfulfillable inventory.

📌 Note: If an item is returned but cannot be graded and resold, no processing fee is applied.

Example Breakdown

For an item originally sold for $30 and relisted as Used – Good at $24:

  • Processing Fee: $1.80 (large standard-size)

  • Referral Fee: 15% of $24 = $3.60

  • Fulfillment Fee: Based on standard FBA rates for the size/weight

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Pricing Strategy for Graded Items

Sellers have control over the pricing of graded items by setting discount percentages relative to the new item’s price, based on the assigned condition:

  • Used–Like New: Typically priced at 95% of the new item price
  • Used–Very Good: Approximately 85% of the new item price
  • Used–Good: Around 80% of the new item price
  • Used–Acceptable: About 75% of the new item price

For example, if a new item is priced at $30, the pricing for each condition would be: 

  • Used–Like New: $28.50 
  • Used–Very Good: $25.50 
  • Used–Good: $24.00 
  • Used–Acceptable: $22.50 

Sellers can adjust these discount percentages to align with their pricing strategies.

Additional Considerations 

  • Referral and Fulfillment Fees: Standard Amazon referral and fulfillment fees apply to graded and resold items, similar to new items. 
  • Profitability Threshold: Due to processing and associated fees, Amazon recommends enrolling products with an average selling price above $15 to ensure profitability. citeturn0search10 
  • Storage Fees: While items are being evaluated for grading, storage fees are paused. Once an item is relisted, standard storage fees resume 

By understanding and managing these fees and pricing strategies, sellers can effectively utilize the FBA Grade and Resell program to recover value from returned inventory. 

Benefits of the Grade and Resell Program

Benefit
Explanation

💰 Recover Lost Revenue

Turn returns into sellable inventory instead of losses. 

📈 Improve Inventory Turnover

Keep returns moving instead of building up unfulfillable stock.

🧮 Better Profit Visibility

Tools like KwickMetrics help track resale profitability by grade.

🏷️ Automated Listings

Amazon handles grading and relisting, saving you time.

🌱 Sustainability

Reduces waste, appeals to eco-conscious buyers

What Happens If You Don't Enroll?

If you don’t opt into Grade and Resell:

  • Amazon marks graded items as unsellable.
  • You either: Pay for removal or disposal,
    or
    Use FBA Liquidations, which recovers minimal value (often <10% of item cost).
  • You lose potential profits from items that could still sell in “used” condition.

Tips for Seller Success in the FBA Grade and Resell Program

If you don’t opt into Grade and Resell:

  • Price strategically by condition grade.
  • Use KwickMetrics to track ROI
  • Identify products with high return but low defect rates—ideal for Grade and Resell.
  • Monitor customer feedback on “used” listings to protect brand perception.
  • Set alerts for increasing return rates to address quality issues.

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