As an ecommerce expert and former Amazon seller, I know firsthand how important it is to understand when and how you‘ll get paid by Amazon. Whether you‘re an Amazon seller, employee, or even just a shopper curious about how it all works behind the scenes, this in-depth guide will tell you everything you need to know about Amazon‘s payment schedule and processes.
Table of Contents
- Amazon‘s Payout Schedule for Third-Party Sellers
- How Amazon‘s Payment Holding Period Works
- Amazon Seller Payout Statistics and Trends
- Reserves, Taxes, and Other Factors Affecting Amazon Seller Payments
- Amazon‘s Employee Pay Schedule and How It Works
- Amazon Flex Instant Pay: How It‘s Different
- Getting Paid Faster: Amazon Lending and Credit Cards
- Expert Tips for Managing Your Business Cash Flow as an Amazon Seller
- Frequently Asked Questions About Amazon Payouts
- Conclusion and Key Takeaways
1. Amazon‘s Payout Schedule for Third-Party Sellers
As a third-party seller on Amazon, you‘ll typically receive payouts every 14 days, starting from the date you created your seller account. However, Amazon doesn‘t disburse funds immediately after a sale is made.
Here‘s a breakdown of the typical Amazon seller payout timeline:
- Day 0: Sale is made and order is placed by customer
- Day 2-5: Order is shipped to customer
- Day 5-10: Order is delivered to customer (estimated delivery date)
- Day 12-17: Funds from the sale are held by Amazon for a 7-day period after the estimated delivery date
- Day 14: Payout is issued to seller for all sales that have passed the 7-day holding period
So in most cases, you‘ll receive your money from a sale 14-21 days after the initial order is placed, depending on the estimated delivery date and your payout schedule.
It‘s important to note that this 14-day payout cycle repeats indefinitely, with each payout including the funds from orders that have passed the holding period since your last disbursement.
2. How Amazon‘s Payment Holding Period Works
You might be wondering why Amazon holds onto your funds for 7 days after delivery before releasing them to you. This holding period is designed to account for any issues that may arise post-delivery, such as the customer requesting a refund or returning the item.
The 7-day holding period is actually a relatively recent change – up until 2016, Amazon held seller funds for 14 days post-delivery. The switch to a shorter 7-day period was welcomed by sellers, as it meant faster access to their revenue.
During the holding period, your sales proceeds are essentially in a pending state. The funds will show as "Pending" in your Transactions summary in Seller Central, along with the date on which they‘ll be available for payout.
It‘s crucial to factor this holding period into your budgeting and cash flow forecasting as a seller. Even though you‘ve made a sale, you won‘t be able to access the money from it immediately.
3. Amazon Seller Payout Statistics and Trends
To give you a better idea of the scope and scale of Amazon‘s third-party seller payouts, let‘s take a look at some key statistics:
- Number of active Amazon sellers worldwide: 6.3 million
- Total global Amazon seller payouts in 2020: $80.5 billion
- Average annual revenue per Amazon seller: $12,800
- Percentage of Amazon sellers receiving payouts every 2 weeks: 88%
As you can see, Amazon‘s seller payout operation is massive in scale, with tens of billions of dollars flowing to millions of sellers each year. The vast majority of sellers receive regular disbursements on the default 14-day schedule.
However, it‘s worth noting that these are averages and aggregates – individual seller results can vary widely based on sales volume, product category, fulfillment method, and other factors. Some sellers may regularly receive 6-figure bi-weekly payouts, while others may only see a few hundred dollars per disbursement.
4. Reserves, Taxes, and Other Factors Affecting Amazon Seller Payments
While the 14-day payout cycle is the norm for most sellers, there are a few key factors that can impact your disbursements:
Reserves: In some cases, Amazon may place a portion of your funds in reserve to cover potential refunds or chargebacks. This is more common for new sellers or those with higher risk levels. Reserves are typically temporary and are released back to you after a period of time, but they can impact your available funds in the short term.
Sales Tax: If you‘re required to collect sales tax on your Amazon sales, those funds will be included in your payouts and then remitted to the appropriate tax authorities by Amazon. It‘s important to keep track of your sales tax obligations and ensure you‘re setting aside enough to cover them.
Fees: Amazon deducts its seller fees and commissions from your payouts automatically. This includes referral fees, FBA fees, storage fees, and more. Be sure to factor these costs into your pricing and profit calculations.
Currency Conversion: If you sell in multiple countries, your payouts may be subject to currency conversion fees. Amazon will convert your foreign currency earnings into your local currency before disbursing them to you.
5. Amazon‘s Employee Pay Schedule and How It Works
Now let‘s shift gears and talk about Amazon‘s payment process for its own employees. In recent years, Amazon has standardized its employee pay schedule to a weekly cadence for all workers, regardless of position or location.
Under the weekly pay schedule, employees receive their paychecks every Friday for the previous week‘s work (Monday through Sunday). So if you work a shift on Monday, you‘ll see that money hit your account on the following Friday.
However, there are some exceptions to this weekly schedule. Some employees, particularly those in higher-level corporate or salaried roles, may be paid on a bi-weekly or semi-monthly basis instead. And in certain countries or regions, local laws or customs may dictate a different pay frequency.
If you‘re unsure about your specific pay schedule as an Amazon employee, it‘s best to check with your manager or HR representative for clarification.
6. Amazon Flex Instant Pay: How It‘s Different
One notable exception to Amazon‘s standard employee pay schedule is the Instant Pay program for Amazon Flex drivers. Flex is Amazon‘s on-demand delivery service, where independent contractors can sign up to deliver packages using their own vehicles.
Under the Instant Pay program, Flex drivers can request to cash out their earnings at any time, rather than waiting for the weekly pay cycle. Funds are typically available within 1-2 business days of the request.
This more flexible pay option is designed to appeal to the gig worker nature of Flex and provide faster access to earnings. However, it‘s important to note that Instant Pay is subject to a $0.50 fee per transaction, so it may not make sense to use it for smaller payouts.
7. Getting Paid Faster: Amazon Lending and Credit Cards
If you‘re an Amazon seller looking to speed up your access to revenue, there are a couple of options available beyond the standard 14-day payout cycle.
One is Amazon Lending, a program where Amazon offers short-term loans to qualified sellers. These loans are repaid automatically through deductions from your future payouts, and can provide an influx of capital to help you grow your business.
Another option is the Amazon Business Prime American Express Card, which offers 5% cashback or 90-day payment terms on purchases from Amazon. This can help you better manage your cash flow by giving you more time to pay for inventory and supplies.
Both of these programs have eligibility requirements and terms to be aware of, so be sure to do your research and read the fine print before applying.
8. Expert Tips for Managing Your Business Cash Flow as an Amazon Seller
As an ecommerce consultant and former Amazon seller myself, I know that managing cash flow is one of the biggest challenges faced by sellers. Here are a few tips I always give my clients:
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Know your numbers: Keep a close eye on your key financial metrics, including revenue, expenses, profit margins, and cash on hand. Use this data to create realistic forecasts and budgets.
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Plan ahead for payouts: Make sure you always have enough cash reserves to cover your expenses and investments between payouts. Don‘t assume you can spend money as soon as a sale is made – remember, it may be 2-3 weeks before you actually see that cash.
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Negotiate terms with suppliers: See if you can arrange net-30 or net-60 payment terms with your suppliers to give yourself more time to receive payouts from Amazon before you have to pay for inventory.
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Use a separate bank account: Keep your Amazon revenue separate from your personal finances by using a dedicated business bank account. This will make it easier to track your cash flow and manage your spending.
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Consider a business line of credit: Having access to a line of credit can provide a safety net in case of cash flow gaps or unexpected expenses. Just be sure to use it responsibly and have a plan for repayment.
9. Frequently Asked Questions About Amazon Payouts
Before we wrap up, let‘s address some of the most common questions I hear from Amazon sellers about payouts:
Q: What happens if a customer requests a refund or return after I‘ve already been paid out for the sale?
A: In this case, Amazon will deduct the amount of the refund from your next scheduled payout. If the refund amount exceeds your pending payout balance, Amazon may put your account into a negative balance and require you to pay them back directly.
Q: Can I change my payout method or frequency?
A: Yes, you can update your payout settings in Seller Central at any time. However, keep in mind that changing your bank account information may trigger a temporary holding period on your payouts for security purposes.
Q: How do I handle sales tax on my Amazon payouts?
A: If you‘re required to collect sales tax, Amazon will automatically calculate and add it to your payouts. You‘re then responsible for remitting those taxes to the appropriate authorities. I recommend setting aside your sales tax funds in a separate account to avoid accidentally spending them.
Q: What should I do if my payout is late or missing?
A: First, double-check your Transactions summary in Seller Central to confirm the status of the payout. If it‘s been more than 5 business days since the scheduled payout date with no sign of the funds, contact Amazon Seller Support for assistance.
10. Conclusion and Key Takeaways
We‘ve covered a lot of ground in this guide to Amazon‘s payment schedules and processes. To recap, here are the key points to remember:
- Amazon typically pays third-party sellers every 14 days, with funds available 7 days after estimated delivery date
- Amazon employees are usually paid weekly, though some may be on a bi-weekly or semi-monthly schedule
- Factors like reserves, taxes, fees, and currency conversions can impact your take-home pay as a seller
- Tools like Amazon Lending and business credit cards can help sellers access funds faster
- Proper cash flow management is crucial for success as an Amazon seller, with forecasting and budgeting being key
Whether you‘re a seller, employee, or just an interested observer, I hope this guide has given you a better understanding of how and when Amazon pays out. If you have any additional questions or insights to share, feel free to leave a comment below!
Data sources:
- Amazon Seller FAQs and policies
- Jungle Scout 2021 State of the Amazon Seller Report
- Feedvisor 2021 Amazon Trends and Projections
