The world of ecommerce is both fast and slow. Buyers place orders in seconds but sellers wait weeks to get paid for these sales. This two-speed world has its challenges but sellers can take steps to speed up payouts and maintain growth.
Payout processes differ depending on marketplace, and sellers have to get to grips with each to manage their cash flow. The table below compares payout terms for Amazon, TikTok Shop and Back Market. First, we answer the question – why do marketplaces hold back seller payouts?
Payouts – why are they delayed?
Marketplaces hold back a percentage of funds from orders to ensure that sellers have sufficient funds to fulfil refunds and chargebacks, and this also protects the marketplace from potential fraud. How fast do I get paid on Amazon? Amazon refers to this amount as the ‘reserve’, but is also known as your unavailable balance or on-hold amount.
Refund requests are made by buyers, and chargebacks are made by credit card providers or banks when their customer disputes a purchase. Both impact purchase completion which is why marketplaces hold back a percentage of sales that they process.
This practice protects both the interest of buyers, who would lose confidence if they failed to be satisfied with items bought, and sellers, who could be caught in arrears if there was a surge in refund requests.
The size of your reserve depends on a number of factors, including the types of goods you sell, performance history and fulfilment methods. How fast do I get paid on Amazon can depend heavily on these factors.
Unfortunately, your reserve can still be high even if your key metrics are good, for example in apparel and shoes, as returns and exchanges are frequent due to sizing issues.
However, issues arise for sellers as it can take anywhere from three days to three months before businesses receive the money in their accounts, making it difficult to cover operational costs and restock in the interim.
Florian Eder,
Product Manager at Back Market“The reserve is a financial safety net for both Back Market and its customers. Because it builds trust, this helps maintain a secure and reliable marketplace for both sellers and buyers.”
How payout terms vary depending on marketplace
This table looks at payout frequency, or schedule, (how often a marketplace makes payouts), payment terms (when you become eligible to receive funds for sales) and payout settlement (how long it can take for you to actually receive payment to your bank).
Terms and processes are quite different across just these three marketplaces. You could get daily payouts on TikTok Shop, weekly payouts on Back Market and just two payments per month on Amazon. However it’s important to note that, while TikTok Shop may pay sellers daily, there is still a delay between sale and payout; you aren’t getting paid daily for that day’s sales.
| Payout frequency | Payout timing/ terms | Payout settlement | |
|---|---|---|---|
| Amazon | Every 14 days for most sellers | 7 days after delivery | 3-5 days |
| TikTok Shop | Daily | 1-15 days after delivery | 1-3 days |
| Back Market | Weekly | 7-14 days after shipping | 1-3 days |
A cashflow alternative – beyond limitations
Cashflow is essential for fast-growing ecommerce enterprises. Not being able to replenish stock when you hit peak orders for example is a sure way to impact your account health.
Traditionally, sellers facing instability around cashflow would turn to business loans or credit lines. These options have their limitations, of course, from the time loans take to process to paying interest on the sum borrowed.
It is why more sellers are choosing a cash flow solution. The sums you are advanced reflect sales already achieved and not the need to borrow money to function between payouts. Rather than waiting 14 days or more, daily advances allow business to restock immediately and secure yet more sales.
How does it work?
You can benefit from an advance of up to 80% of your net, shipped sales. When your marketplace pays out you receive the remaining 20%, minus fees, which at Storfund start at just 0.1% of the net sales we fund. More on how it works.
Storfund was designed for ecommerce which is why we focus on a service that is fast, flexible and built for growth. Because we are integrated with Amazon, TikTok Shop and other global marketplaces, our clients don’t have to request payments or submit sales data. How fast do I get paid on Amazon is no longer a worry. Sellers simply receive daily payouts, based on previous day’s sales.
Take your business from slow payouts to fast growth with immediate payouts. Get in touch to find out how to get started.
