How "Smart" is Amazon's Smart Match Technology?

Hello Vendorville,

We’re in the era of automation. Whether you love it or not, it's become a buzzword in the CPG industry.

Innovation leaders like Amazon continue to refine processes to ultimately benefit their end customers. Smart Match, an automation process within Amazon, aims to auto-match purchase order (PO) management to invoices for a streamlined way to track if orders are fulfilled.

While the intention is undoubtedly to create a seamless experience, the reality for many suppliers paints a different picture. Amazon’s Smart Match technology, which automatically attempts to match invoices to purchase orders, often falls short — leaving suppliers to pick up the pieces when mismatches happen.

How Smart Match Works

Smart Match isn’t a man behind the curtain but rather a data algorithm that can be influenced by changes in receiving data, which don’t always match the reality of the receiving process.

When a shipment arrives, the system attempts to match it to the correct PO using the shipment labels, packing slips, and data provided in the Advance Shipment Notification (ASN).

When that information is incomplete or does not match, Smart Match uses alternative data points (e.g., product identifiers, quantities) to identify the correct PO.

Initially, Amazon claims to take 35-45 days to find the shorted product and reverse shortages on any items found. However, matching can occur for months despite suppliers having less than 2 months the optimal disputing window. The algorithm favors older shortages so that Amazon can close out old business and focus on the new.

From a supplier’s perspective, this can feel like Amazon is fixing older mistakes when in actuality, it's placing matching units from a newer PO, to complete the shortage from an older PO. It's essentially a bad patch job that exacerbates the issue, rather than resolving the shortage once and for all.

Common Problems with Smart Match

Smart Match be like:

Often, it mistakenly matches an invoice to an incorrect PO due to minor variances in order details. This could be as simple as slight discrepancies in item descriptions or quantities, which the system sometimes misinterprets as legitimate variations. These mismatches can result in rejected invoices or payment delays—a real problem for cash flow.

For example, this supplier looks to have a simple shortage and overage however, this is the tip of the iceberg in the blindly matched items.

Blind Match Example:

Supplier XYZ is digging into their shortages and finds the following issues:

PO 123 - 57/62 units received.
- No shortage because a previous PO’s units filled in the gaps.
  - 4 units from PO 456 was used.
  - 1 unit from PO 789 was used.

Compounding effects of Smart Match blindly matching units from other POs:

PO 456 - 55/59 units received
- 🚨 Shortage created.
  - Those 4 units from PO 123 were attributed incorrectly, causing a shortage on a correctly fulfilled order
PO 789 - 62/60 units received
- 🚨 Overage created.
  - Even though Smart Match pulled 1 unit from PO 789 and attributed it to PO 123, there’s an overage.
  - This overage is created because Smart Match blindly matched
    - 2 units from PO 1011
    - 1 Unit from was used from PO 123
    - 1 Unit is still unaccounted for in Amazon’s system

The technical quirks of this example might seem minor, but the domino effect adds up quickly for suppliers.

Other suppliers have found that Smart Match’s limitations lead to:

Payment Delays: Inaccurate matches delay payment timelines, as mismatched invoices need manual review.
Increased Labor Costs: More time and resources are needed to correct issues that Smart Match fails to handle correctly. This added labor hits smaller suppliers, who often have limited staff, especially hard.
Lower Dispute Approval Rates: Errors caused by mismatched invoices can be harder to dispute effectively, impacting overall revenue.

Outsmarting Amazon’s Smart Match: Best Practices

Overall, suppliers should be vigilant, proactive, and prepared to handle mismatches manually. If you encounter repeated Smart Match issues, consider reaching out directly to Amazon Support – and let them know this "smart" tech still has room to grow.

Here's a couple of tactics to start checking Smart Match:

Ensure that PO numbers are accurately included in shipment labels and ASNs.
Provide clear and consistent packing slips.
Use GS1-compliant barcodes on all units.
Regularly monitor the Chargebacks and Shipment Details sections in Vendor Central to address any issues proactively.
Keep a record of Smart Match discrepancies. A paper trail of these mismatches can strengthen dispute cases with Amazon if issues arise.

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Let’s Circle Back 🔄

We know you’re smarter than Amazon’s Smart Match, but are you smarter than a 5th grader?

Test your knowledge to see if you should feel superior to or scared of Gen Alpha with this quiz.

Don’t worry, unlike AI, fifth graders can’t take jobs from the current workforce because of something with labor laws (take that, Liam).

♥️ Sincerely, Your Friends in Vendorville