Cash flow problem with FBA business
Hello,
How does everyone manage cash flow with Amazon FBA business? It's been challenging for us to be cash-strapped for 2 weeks until Amazon pays out which I still don't understand why it doesn't allow daily cash out like eBay does; their excuse for reserving funds for potential returned goods doesn't make sense when the return rate is historically less than a couple percent of the bi-weekly payout amount.
Especially at times like this where interest rates are extremely high with every financial institution, does Amazon have justification to hold such a large amount of funds for such a prolonged period of time without any incentives while driving sellers to the situation where they have to use loans and credit cards with interests in order to fill the voids caused by the stubborn bi-weekly pay out?
I have reached out to them to see if there is a possibility for daily pay out or even weekly pay out but no luck. Does anyone have any payouts earlier than bi-weekly?
What does everyone think?
It takes over a month or even close to 2 months for inventories to even be restocked at the fulfillment center while the suppliers do not usually offer terms these days let alone even 2 months. I am not seeing how Amazon FBA model is supposed to work for many businesses with the likely recession looming with Chinese big retailers like Shein and Temu rapidly stealing the market share globally, not just US with prices at less than a fraction of what US retailers can offer both online and offline.
It is really getting tough even to make ends meet day by day. Sigh.
Hope to hear what everyone is going through and how you are all doing.
Regards,
Ocean
Cash flow problem with FBA business
Hello,
How does everyone manage cash flow with Amazon FBA business? It's been challenging for us to be cash-strapped for 2 weeks until Amazon pays out which I still don't understand why it doesn't allow daily cash out like eBay does; their excuse for reserving funds for potential returned goods doesn't make sense when the return rate is historically less than a couple percent of the bi-weekly payout amount.
Especially at times like this where interest rates are extremely high with every financial institution, does Amazon have justification to hold such a large amount of funds for such a prolonged period of time without any incentives while driving sellers to the situation where they have to use loans and credit cards with interests in order to fill the voids caused by the stubborn bi-weekly pay out?
I have reached out to them to see if there is a possibility for daily pay out or even weekly pay out but no luck. Does anyone have any payouts earlier than bi-weekly?
What does everyone think?
It takes over a month or even close to 2 months for inventories to even be restocked at the fulfillment center while the suppliers do not usually offer terms these days let alone even 2 months. I am not seeing how Amazon FBA model is supposed to work for many businesses with the likely recession looming with Chinese big retailers like Shein and Temu rapidly stealing the market share globally, not just US with prices at less than a fraction of what US retailers can offer both online and offline.
It is really getting tough even to make ends meet day by day. Sigh.
Hope to hear what everyone is going through and how you are all doing.
Regards,
Ocean
4 replies
Seller_kIukTwdhvntAp
The first solution is to NOT do FBA where between 40% and 50% of the sales proceeds are going to make AMAZON money.
Since you voluntarily chose to give up control they do have ways to get paid earlier but the costs are, shall we say, extreme. If your margins are small now, they may become negative. If you are familiar with the term 'factoring' in the retail business the early pay guys make the 'factors' look like angels.
When you say 'the return rate is historically less than a couple percent of the bi-weekly payout amount. ' but you don't say how long you have been selling on here. Amazon doesn't care. They will do what they have to do as a result of being scammed by pros over the years for lots of refunds from their pockets.
Hold some inventory and sell BOTH FBA and FBM so YOU make the extra money on at least part of the sales flow.
Basically, everything that you are saying is true AND doing any reading in the Forum would have discovered this before you jumped in the river.
You are not going to change the payout system on Amazon. You will have to adjust your prices so you make a profit or change the way you do business.
