When you make a sale on Amazon, the funds don't immediately go into your account.
As much as you'd like to instantly receive the money you make on every sale, that's not how it works for Amazon Sellers.
This post will cover the Amazon Payout Schedule, how it works, and some tricks to get more out of it.
How long between Amazon Payouts?
Amazon pays its sellers every 14 days, and when the 14th day hits, they will initiate a disbursement of funds into your bank account.
After Amazon triggers the disbursement, it will take 3-5 business days to get your money.
So after 14 days, you must wait another 3-5 BUSINESS days to receive the funds in your bank account.
Kind of a bummer, but there are things we can do about that (which we'll cover below).
If you look at your balance, you'll notice that Amazon never pays you the total amount of funds in your balance when it's time to get your money.
What gives?
To understand that, you need to know about reserves and fees.
Why Amazon Pays You Less Than Expected
Balance Reserves
Whenever you make a sale on Amazon, that money doesn't just go straight into your bank account (as much as we all would like it to).
When a product is purchased, Amazon gets funds from the customer as soon as it ships, and afterward the money is added to your balance.
Once it's in your balance, Amazon holds onto that money you make and keeps it in reserve for around seven days, until your disbursement day arrives. If you have money that is on its 6th day of being reserved, that cash will appear in your bank account on the next payout cycle.
That means if you make a sale, and it takes two days to ship, and that money added to your balance misses the 14-day disbursement window (because it's still within the seven days of reserve), you might not see the money from a product sale for 20+ days if you consider the 3-5 business days for the funds to go from Amazon to your bank account.
Essentially, don't count on any money you make on Amazon to arrive quickly.
If you have a good sales week, you might not see that week's results reflected in your next payout, but likely the one after that.
Fees
Amazon has a lot of different fees, and they will take them directly out of your account balance from money that you might be expecting to go to your bank account.
A few places Amazon will charge you by pulling from your balance:
- Advertising. Your advertising spending will be drawn from your balance, so if you aren't keeping track of your spending, you might be surprised when Amazon doesn't pay you the amount you expect. We go over later in the post how to have Amazon not pull advertising spend from your balance.
- Storage. Housing your inventory in Amazon's FBA warehouses costs money. It costs even more during peak season (October through December), and costs way more if your items have been in Amazon warehouses for over a year.
- Shipping to FBA Warehouses. Whenever you create an order to send products to FBA either through freight or UPS, Amazon will pull the amount it costs directly from your balance. If you sent in a lot of products one week, it might catch you off guard with a lower-than-expected payout.
- Returns. The dreaded returned items can eat your balance for lunch. One mistake a lot of early sellers (and even longtime sellers) make is not factoring in returns into their margins. Understanding your return % and factoring that into your business is the difference between making a profit and taking losses.
Issues with customers and delivery of products
If a product is delayed during delivery, Amazon will hold onto funds for that product until it is resolved. If there is any issue with delivery, it can extend fund delivery for another 7 days.
If a customer files an A-to-Z Guarantee claim, it could extend the length of time you see your funds for a product sale another 14 days.
If your account sees unusual activity, such as an unusual sudden increase in product sales, a drop in your seller performance ratings, or your store is still on the newer side, Amazon can hold funds for longer than usual.
Your price and Amazon FBA/Selling Fees are too close
It costs a lot of money to sell a product on Amazon.
Amazon can take 50% of the total retail price for an item sold, which is absolutely huge.
If you sell 1,000 units of a product, but Amazon is taking all the money for their selling and fulfillment fees, you can end up with close to zero cash off of those sales.
In my experience, there are two ways where sellers can end up missing out on cash due to their set price clashing with Amazon's fulfillment and selling fees:
- It's the seller's fault. A seller could put a product for sale on Amazon but didn't accurately gauge how much Amazon would charge to fulfill it because they underestimated the weight and/or dimensions of their product. The result could be a very high fulfillment cost combined with a low price, which results in low cash for the seller.
- It's Amazon's fault. If the seller puts a product for sale on Amazon, sometimes Amazon incorrectly measures and/or weighs the product, resulting in a higher fulfillment fee. In this case, always check your products to make sure you're paying the correct fee for fulfillment, and Amazon will reimburse you if they make this mistake.
Knowing that it takes Amazon a long time to pay out and charges you for every little thing, is there anything we can do if we want funds faster or to get more cash out of Amazon?
Luckily, there is!
Let's get into a few tactics.
How To Get Paid Faster by Amazon
Request funds from Amazon at any time
If you're in a desperate situation and need funds fast from Amazon, you can always request the available funds in your balance at any time.
While this is a very nice option from Amazon, the amount you are able to pull on demand is usually very low, and this is due to the Reserves we went over earlier.
Look at how low the available funds are compared to the Total Balance!
Generally speaking, while this option is nice to have, you'll likely rarely (if ever) use it.
Utilize Amazon's New "Express Payout" Service
Some sellers have been invited to Amazon's new Express Payout service that takes 3-5 business days to receive funds in their bank account down to 24 hours (even on weekends!).
While it seems to be invite-only for now, you can check your Deposit Method page on Seller Central (you must be logged in to see the page) to see if you can check the box to enable Express Payout.
The service is free for now until September 2023, but after that, it will cost $0.50 each time you get paid by Amazon, which is a trivial amount.
Utilize Amazon's "Get Paid Faster" Service
There are two order types on Amazon, Invoiced and Standard.
Most purchases are standard and you'll see those funds in the usual amount of time, but some are "invoice orders" in which Amazon Business Customers can choose to delay payment for certain products by up to 30 days.
Since they don't pay, you don't get your money and have to wait 30+ days before it's in your balance.
Amazon of course, will give you the funds earlier, at the cost of 1.5%.
You can read more about it on Amazon's Get Paid Faster page.
Personally, I can't think of many instances where you'd want to take advantage of this.
Get Funding from Outside Sources
Waiting up to 20 days to get your money for a product sale and getting paid in 2-week periods can be unsustainable for businesses that need to make restocks early.
Sometimes, if recognizing profits to restock your products is too slow, you must take on outside funding to prevent stockouts.
For that reason, the best option for a lot of sellers is revenue-based financing, which can get you the funding you need without waiting for Amazon to grace you with your own money after 20 days.
How To Get Paid More by Amazon Payouts
Do you want to get more cash from your Amazon payouts?
While you can't simply force Amazon to give you more money, there are a few things you can do to maximize the amount of money you are sent.
Charge Advertising to a Credit Card
Amazon pulls from your balance for advertising, but you can elect to have your advertising charged to your credit card instead.
This trick is a win-win. You get fewer fees and funds pulled from your balance on Amazon, and you can get reward points for your credit card.
You can change your payment method for advertising within your Amazon Seller Central Account Information page:
Keep Less Inventory at Amazon
You get charged a lot for storage on Amazon.
Storing products outside of Amazon can typically be cheaper than storing it within FBA warehouses.
While it can differ for every account, what point of the year it is, you should keep between 30-90 days of inventory for each product within Amazon at any given time.
You can be riskier and keep it closer to 30 days, or you can keep it closer to 90 days but you will pay higher storage fees, so find your sweet spot and keep consistent shipments going into Amazon FBA warehouses.
Keep an Eye on Fulfillment Fees
As we mentioned earlier in this post, you can either not price your products accordingly with their dimensions and weight in mind, leading to higher fulfillment fees that leave you with little-to-no cash once a sale is made.
Or you can have Amazon mistakenly measure your product dimensions and charge you more than they should to fulfill an item.
Be vigilant, and check for errors either you have made or Amazon has made when it comes to fulfillment fees.
Compare your fulfillment fees to those of your competitors and see if anything is off. Amazon will reimburse you for incorrect weight and dimension measurements they make.
Lower Your Return Rate
I know what you're thinking, returns will always happen, but you can actually influence them to reduce them a bit on Amazon.
Here are some ideas to help with your return rate:
- Strong packaging. A ton of Amazon returns and negative reviews have nothing to do with the product itself, but that it was damaged in delivery. Provide strong packaging for your products and it will reduce returns.
- Send all returns back to you. What I mean by this is don't let Amazon put returned items back into inventory for sale, have them automatically send ALL returns to you, whether that be at your house, your warehouse, or to your 3PL.
- Make sure your listing closely matches your product. Don't include extra goodies in your images that could have people think it's bundled within your product, make sure the product looks like its images, and don't over-promise on your listing and under-deliver.
Conclusion
With the information in this post, you will hopefully never be lost or angered by Amazon Payouts again.
Knowing more about how the Amazon platform works to allow you to make better business decisions and better manage your account.
So go and get the maximum value from your balance!
