Amazon Seller Payment Terms: Understanding How You Get Paid

When selling on Amazon, understanding the payment terms is crucial for managing your finances effectively. Amazon’s payment terms for sellers primarily revolve around the disbursement schedule and the associated fees. Here's a detailed breakdown of how and when you get paid as an Amazon seller.

1. Payment Schedule Amazon typically follows a bi-weekly payment schedule for disbursing funds to sellers. This means that every two weeks, Amazon will transfer the earnings from your sales into your bank account. The payment cycle usually starts on the day of your account’s registration, and payments are processed within 5 business days after the end of the payment period.

2. Reserve Funds To mitigate risks, Amazon maintains a reserve fund for each seller. This reserve is a percentage of your sales, set aside to cover potential returns, chargebacks, and other issues. The reserve amount varies based on your account’s performance and the sales volume. For new sellers, Amazon may hold a higher percentage as a precautionary measure, which gradually decreases as your account gains a solid performance history.

3. Fees and Deductions Before the payment is disbursed, Amazon deducts several fees from your total earnings:

• Referral Fees: A percentage of each sale based on the category of the product sold.
• Fulfillment Fees: If you use Fulfillment by Amazon (FBA), this fee covers the storage and shipping costs.
• Closing Fees: Applicable for media products like books, music, and DVDs.
• Other Fees: Any additional fees specific to your selling plan or services.

These fees are subtracted from your earnings before the funds are transferred to your bank account.

4. Payment Methods Amazon offers several payment methods for sellers:

• Direct Deposit: The most common and preferred method. Funds are deposited directly into your bank account.
• Checks: Available in some regions, though less common and generally slower than direct deposits.
• Amazon Gift Cards: Used less frequently but available in specific circumstances.

5. Currency Conversion If you are selling internationally, Amazon handles currency conversion based on the current exchange rates. However, there might be additional fees for currency conversion, depending on your bank or payment provider.

6. Account Health and Payment Holds Amazon may place a hold on your payments if there are issues with your account health or if they detect potential problems with your sales. Common reasons for payment holds include high return rates, customer complaints, or issues with your account verification. To resolve these holds, you’ll need to address the underlying issues and provide necessary documentation to Amazon.

7. Tax Information Amazon requires sellers to provide accurate tax information to comply with tax regulations. Depending on your location and sales volume, you may need to fill out tax forms or provide additional documentation. Ensure that your tax information is up-to-date to avoid any disruptions in your payments.

8. Dispute Resolution If you encounter any discrepancies or issues with your payments, Amazon provides a dispute resolution process. You can contact Seller Support to address any concerns or to resolve issues related to payment errors.

9. Managing Cash Flow To effectively manage your cash flow as an Amazon seller, consider:

• Tracking Sales and Fees: Regularly review your sales reports and fee deductions to understand your earnings better.
• Budgeting for Reserves: Plan for the reserve funds that Amazon holds back and adjust your financial planning accordingly.
• Reinvesting in Inventory: Use your earnings to reinvest in inventory and expand your product offerings.

10. Additional Resources Amazon provides various resources and tools to help sellers manage their payments and account performance. Check the Seller Central dashboard for updates, insights, and support.

Summary Understanding Amazon’s seller payment terms is crucial for maintaining financial health and managing your e-commerce business effectively. By staying informed about the payment schedule, fees, and account requirements, you can ensure a smoother payment process and focus on growing your business.