Amazon Extends Payment Delay Policy to European Sellers, Raising Concerns for Small Businesses
Amazon has announced that it will be extending its policy to delay payments to sellers in Europe. The online retail giant insists that the majority of its sellers will not be affected by this rule change, which was implemented on August 3rd.
A policy has been put in place by Amazon to ensure that sellers are not paid until seven days after the delivery of their products. This is to ensure that the company has enough funds to cover any potential returns or customer claims. Previously, this policy only applied to vendors registered before 2016, which accounted for approximately 15% of all UK and European traders. However, as of August 3rd, this policy has been extended to all European sellers.
Small businesses that sell products through Amazon have expressed concerns that this payment delay policy could lead to bankruptcy. Marios Katz, a businessman from Cyprus who sells CDs and vinyl to the UK, claims that Amazon is currently holding £5,000 of his earnings. He believes that Amazon’s actions could have a detrimental impact on small businesses and companies, as bills, employees, postage, and couriers may go unpaid.
The change in policy is estimated to impact around 33,750 out of the 225,000 firms in Europe that sell through Amazon, according to financial website This is Money. Numerous complaints have been posted on the Amazon Sellers forum by sellers who have had their money withheld. The Treasury is reportedly aware of the issue, with the office of Conservative MP for Bracknell, James Sunderland, acknowledging the matter.
Amazon has stated that the payment delay policy was first introduced in August 2016 and has already been applied to 85% of sellers. The remaining sellers were given three months’ notice before the policy was extended to them. A spokesperson for Amazon explained that the purpose of this policy is to standardize the payment process for European sellers, ensuring that they have enough funds to fulfill their financial obligations, such as product returns or customer claims. The company emphasizes that the vast majority of selling partners will not be affected by this change.
Overall, the extension of Amazon’s payment delay policy to European sellers has raised concerns among small businesses. While Amazon argues that this change is necessary to manage financial obligations, sellers fear that it could have a detrimental impact on their operations and potentially lead to bankruptcy.