Delivery Date Plus 7 Payments are Punitive
We just got forcefully moved over to DD+7 payments after 20+ years of being on a biweekly schedule, and the results have been devastating.
I can *almost* see the logic of DD+7 for merchant fulfilled, but for FBA shipments, it's unacceptable. If we are paying Amazon to handle fulfillment and customer service, than there is no justification to reserve payment for FBA item sales, since we have no control over returns. If AMZ is going to hold payment until 7 days after the customer receives their item, then they should be deducting the funds for returns from our accounts 7 days after the return delivery date as well. This is them having it both ways at our literal expense.
At this point, I think I am shutting down 100% of my FBM listings, and migrating them elsewhere. I will keep our FBA listings, but will be dramatically altering how I do business on the platform, to our customer's detriment, as expecting us to fund perpetual "payday loans" to Amazon for 0% interest is unworkable on top of all the other costs.
Delivery Date Plus 7 Payments are Punitive
We just got forcefully moved over to DD+7 payments after 20+ years of being on a biweekly schedule, and the results have been devastating.
I can *almost* see the logic of DD+7 for merchant fulfilled, but for FBA shipments, it's unacceptable. If we are paying Amazon to handle fulfillment and customer service, than there is no justification to reserve payment for FBA item sales, since we have no control over returns. If AMZ is going to hold payment until 7 days after the customer receives their item, then they should be deducting the funds for returns from our accounts 7 days after the return delivery date as well. This is them having it both ways at our literal expense.
At this point, I think I am shutting down 100% of my FBM listings, and migrating them elsewhere. I will keep our FBA listings, but will be dramatically altering how I do business on the platform, to our customer's detriment, as expecting us to fund perpetual "payday loans" to Amazon for 0% interest is unworkable on top of all the other costs.
16 replies
Seller_LBNcwL9dKwXun
While I hate DD+7 for FBA for the same reasons, the switch to DD+7 shouldn't hurt you THAT bad unless you run your cash horribly tight. Your cash is delayed by one week.
What really is egregious is they allow business customers to take up to 30 days to pay - if Amazon wants to extend payment terms that's their decision, not mine, I want the money ASAP, not after a month. Also, these orders tend to be larger and have a greater impact on cashflow.
Seller_aKjpvLf9GNkXt
Now that the DD+7 policy is finally in place, Amazon gains roughly 20-30 billion dollars additional cash float through DD+7 compared to the immediate (scheduled) payout we were used to, leading to 1-2 billion dollar financial benefits a year (through interest), on the back of about 2 million active marketplace sellers.
Especially now, in the transition time, when DD+7 is successively enforced on everyone, thousands of marketplace sellers will not receive any payout for about 4 weeks, which will lead to a flood of small sellers not being able to pay their rent and their bills.
Amazon's explanation (excuse) is slimy and unlogical:
"The base reserve policy supports both sellers and customers by releasing funds after the delivery date plus seven days. This timeline allows for confirmation of order delivery to customers and provides time for customers to evaluate their orders and process returns or claims if needed. Additionally, it gives you time to account for selling-related fees and other costs. This approach helps you operate and grow your business without fear of disruption."
Amazon assumes that 100% of all orders can potentially lead to refunds - regardless of 5-8% in reality. If Amazon would play fair, it would withhold (defer) a maximum of 10% of a seller's proceeds, but not 100%.
Please correct me if I'm wrong.
Seller_LBNcwL9dKwXun
Yeah, you are wrong... you can request a payout immediately for any settled transactions. This change, if you weren't already previously changed, only means you will now be delayed in receiving the funds by 7 days.
Seller_2k9ll1WgKerX7
why is the amount of the reserve growing with increased sales? They are holding back almost 50% of money owed. It’s really unacceptable they do this to small businesses.
Seller_lB4Fk2YofkqHl
I have a few thousand dollars sitting there as amazon uses it to garner interest and play the stock market. It's pretty silly. Especially for 100% positive sellers
Seller_LBNcwL9dKwXun
as your sales grow, you have more orders waiting for fulfillment and the amount of DD+7 waiting to be paid out grows as well. we have around 1 day of orders sitting unfulfilled with FBA at any given moment, add this plus the orders already delivered waiting for +7 days and it adds up pretty quick. even worse, is if you get a lot of business customers paying net 30, you get hit even harder.
Seller_AJxxLujbGDqaW
It is just the drip drip of getting rid of third party sellers, they don't want us but won't tell us that, so it is the death by a thousand cuts until it becomes impossible to survive and you give up.
Seller support, seller performance and other third party facing departments are not really aware of it, but as the sellers reduce they can make more redundancies until the people are no longer required, win win for Amazon.
Seller_OEXTZlrEJxOck
Amazon has an opportunity to make millions in interest just holding this cash for a few days. This is the only driver behind this move. Get used to it folks, there is only one way this goes. More FBM by the day now
Seller_1idNlTUpfKbZW
Even worse, now they have the issue with Canpar not working in Amazon's tracking system, so we're not getting paid for all orders shipped with Canpar Apr 20-24 for another month...
