Concerned that the recent update to the Amazon vendor terms will impact your cash flow? You’re not alone.
What’s The Scoop
Just this month, Amazon Vendor Central announced its intention to aggressively shift from a twice weekly or 30 day supplier payment model (net 30 terms) to a 90 day supplier payment model (net 90 terms) across all vendors. In other words, this means that when Amazon receives your goods, they will not pay you for up to 90 days. This can have a negative impact on your business and cashflow, but with a bit of adjusting you can easily address it.
What Does That Mean For Suppliers?
For suppliers floating inventory that rely on a 30 day cash flow, it means it’s time to diversify your approach utilizing Amazon Seller Central.
Amazon Seller Central differs from Amazon Vendor Central in a few minor but impactful ways, but it’s important to note that your customers will never even know the difference when it comes time to move from one platform to the other! With Amazon Seller Central, your products are shipped to Amazon Fulfillment Centers where a nominal referral and fulfillment fee is paid for them to sell and ship your products. The buyers pay Amazon, Amazon processes the payment, and the payment is then issued to you as the supplier every two weeks minus their fees. This two-week payment model is often more beneficial to suppliers than say a 90 day payment model, particularly in regards to cashflow.
We know that navigating the ever changing supplier-vendor landscape can be difficult, but that’s where we come in. Covering all bases, from big box retail to the intricacies of eCommerce operations, Legacy provides guidance through local sales leadership, patented analytics data gathering and analysis tools, and visionary strategy development all at one touch point. For more information or to connect with our team, click here.