How Often Amazon Pays Sellers and How Unavailable Balances Work
Updated: Feb 25, 2021
Amazon sends sellers payments typically within 14 days although sometimes longer, but often withholds some or all of the payment as an “unavailable balance.” This unavailable balance is detailed as “Account Level Reserve” on your Amazon seller account.
What’s the deal with that?
You might think that in this age of instant electronic transfers, you should get paid faster. But, for a variety of reasons, you’re not. To effectively balance your cash flow and manage your Amazon business, you need to understand:
How often Amazon pays sellers and why it isn’t a fixed schedule
What and why an unavailable balance may be withheld from a payment cycle
What you can do to avoid high unavailable balances
How to grow your business even as unavailable balances impair your cash flow
How Often Does Amazon Pay Sellers?
Some third-party platforms pay on the 1st and 15th of each month. Amazon doesn’t quite work the same.
Amazon does issue payments (minus Amazon fees) every two weeks (14 days). The payment is for the previous 14 days of sales fulfilled during the last seven days. That last part is the kicker: “fulfilled during the last seven days.” The actual date you get paid depends on when goods are delivered, and when you get paid in full on several other factors we’ll get to shortly. The amount you actually receive every 14 day payout period—as opposed to payment for all the sales you made during the previous 14 days—depends on:
When you signed up on Amazon and began selling; if you started selling on the 25th of your first month, your 14-week cycle isn’t going to be on the 1st and 15th
If you are a new seller, Amazon withholds payment for a full month from the first sale
Your delivery period (how long until the buyer can be expected to receive goods)
7-day or longer reserve period
What’s a Reserve Period?
Say you ship an order on the first of the month. Even though the buyer has submitted payment, there is a reserve period of seven days after the latest estimated delivery date. If you have a long delivery window, your reserve period takes effect over a longer period.
Why the hold? Because Amazon is all about customer satisfaction. The reserve period allows time to resolve a problem with the order or for any reason the buyer decides to return it. In other words, Amazon isn’t going to pay you unless it is relatively confident it’s not going to have to pay a refund out of its own cash flow.
Why a 14 day Payment Schedule is Closer to 20?
Don’t think that once a reserve period passes, you’re likely to receive full payment within the next two weeks of your scheduled payout period. You might not get full payment until as long as 20 days following a sale. That’s because:
Orders delivered within seven days of a scheduled payout date are rolled into your next payout period.
Amazon uses ACH Transfers to pay you. Basically, it’s a bank-to-bank electronic transfer processed through a clearing house. While some transfers can take place in a day, Amazon states you can expect ACH transfer to take up to 5 business days.
Even when the transfer takes place and money is in your account, Amazon may still withhold an unavailable balance from that payout in your Account Level Reserve (found under Closing Balance of the Statement View on your Payments report).
What is an Account Level Reserve?
There are a number of reasons why Amazon withholds part of any balances owed:
Delay in order delivery, which further extends the reserve period into the payout period; remember that orders delivered within seven days of the scheduled payout are rolled into the next payout period.
Buyer files an A-to-Z Guarantee claim. Funds are not released unless and until some resolution is achieved.
You have chargebacks from the last 30 days.
Your seller performance has declined. Amazon evaluates seller performance using a variety of criteria. These include an increase in claims or returns.
Your account is under review due to sudden changes outside usual norms, which believe it or not includes positive changes such as a significant increase in sales.
Whenever you add or change your bank account information, Amazon applies a one-time, 3-day hold on payments starting the day the change takes effect.
How to Mitigate Unavailable Balances and Improve Cash Flow
If you’re seeing proportionately large unavailable balances, Amazon usually notifies you of the issue (e.g., late shipments, negative feedback) so you can take the necessary corrective steps. By that point, however, damage has already been done to impair cash flow.
Be more proactive. Regularly review your Account Health page under Performance in Seller Central. If some of your metrics look like potential red flags, take corrective action before Amazon feels the need to notify you there’s an issue.
Review your inventory and product listings. Prune products that seem prone to returns. Make sure you have enough stock on-hand to fulfill orders on time. Update your product listings to ensure accuracy and prevent returns based on “item not as described.” Price competitively to maintain sales velocity. It almost goes without saying but is still worth repeating, treat your customers well and they’ll treat you well, resulting in more positive reviews leading to more sales and more revenues, even with Amazon’s 14+ day payout schedule.
Of course, some of these actions, such as increasing inventory levels, require additional expenditures on your part, which places additional stress on your cash flow. How, then, do you grow your business, pay your bills, take care of your family while dealing with how Amazon pays sellers and withholds balances?
The “go-to” answers include raising your credit card limits, getting a bank loan, finding a rich uncle. But there’s a better way that avoids high-interest rates and/or high monthly payback amounts. AccrueMe funding partners with your business, investing money with zero monthly payments without any ownership stakes. In return, AccrueMe asks for a percentage of your profits, but only if you have profits. It’s Amazon funding without liabilities or debts.
To learn more, visit AccrueMe to see how your Amazon selling business could be funded.
If you want to grow your business and increase profits, apply here for Amazon Funding.