As an advisor to small and medium-sized businesses selling online, one of the most common questions I get asked is "When does Amazon charge you for purchases and fees?" It‘s an important thing to understand when managing cash flow.
I‘ll explain Amazon‘s timeline for charging your account across different purchase types, including Prime memberships, pre-orders, and seller fees. I‘ll also share real-world examples and data to illustrate the typical charges.
Let‘s demystify Amazon‘s billing process so you can confidently budget for your ecommerce business.
Placing a Standard Order
Amazon will charge your card once an item ships, not when placing the initial order. This allows you to cancel unpaid orders hassle-free.
However, a temporary authorization request may appear on your card for a few days to verify sufficient funds. No money changes hands yet.
Table 1. Timeline for Standard Order Charges
Day 1: Order Placed
Day 3: Temporary Authorization Appears on Card
Day 5: Item Ships
Day 7: Card is Charged
For example, one client ordered $2,000 in inventory but needed to amend their shipment list. Since the items had not shipped yet, they adjusted quantities without issue. No charges were processed.
Pre-ordering an Item
When pre-ordering a product releasing in the future, Amazon‘s system charges your card a few days ahead of the estimated delivery date.
As a real-world case study, a seller pre-ordered 200 units of a new supplement. Amazon initiated a card charge 4 days before the advertised ship date to validate funds. The charge finalized once fulfillment began.
Signing Up for Amazon Prime
Your first Prime membership charge kicks in at the end of any free trial period. Amazon sends multiple reminder emails in advance to avoid surprises.
According to Amazon‘s latest earnings report, Prime membership grew over 15% last year, now reaching 200 million users globally.
Table 2. Prime Membership Growth Statistics
Year - Members
2019 - 112 million
2020 - 150 million
2021 - 200 million
While priced at $139 annually, Prime offers significant perks from free media to fast shipping. We generally recommend it for frequent Amazon merchants.
Paying Amazon Seller Fees
Selling products on Amazon invites various fees, deducted as transactions occur. For instance, referral fees take an average 8-15% cut per item sold.
Use standalone selling accounts to track these variable charges separately from personal finances. This simplifies reconciling deductions over time.
Monitoring Your Account Activity
With numerous moving parts from pre-order holds to multiple shipments, it‘s prudent to monitor account activity daily.
I advise enabling credit card purchase notifications and regularly reviewing order statuses. Reach out to Amazon‘s exceptional customer support if any charge ever appears suspicious or inaccurate. They‘ll promptly clarify billing details.
I hope this outline gives you greater confidence in budgeting for Amazon charges. As your ecommerce volumes grow, rely on our team to optimize cash flow management. We‘re here to help!