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What makes Jeff Bezos so rich and Amazon so famous? The answer can fit in only one word – “smartness.” Both the founder and the marketplace are smart enough to provide Amazon users with the best shopping experience and charge sellers for the opportunity to use the platform. But despite AMZ acting as an intermediary between buyers and sellers, buyers have more privileges in the marketplace. Such an issue as unavailable balance on part of Amazon payouts proves it, becoming one more headache for store owners.
This article will uncover the essence of an Amazon seller’s unavailable balance and suggest the winning ways to deal with it.
Amazon seller unavailable balance is “frozen” cash your buyers have already paid to the platform, but Amazon hasn’t paid you. It is something like an “on-hold” Amazon payment. De jure, this money is yours, but it belongs to Amazon de facto.
Usually, the marketplace holds your money for 14 days after the purchase is delivered to the customer. Amazon takes this time to let the buyer fill in guarantee claims or chargebacks, if any, or make a return if the customer isn’t satisfied with an order. In this way, AMZ ensures it will not be forced to cover claims or chargebacks from its pocket and use your money as an “insurance fund” for such a case.
What’s more, the platform can hold payment for 14 days or longer. Most frequently, such a delay is the result of the following issues:
- Delivery delay or mistake. Until AMZ gets a delivery confirmation, it can’t transfer funds to your account.
- Your account is under review. Suppose you are just starting with Amazon business and your account is under review. In that case, your payment can be held until the marketplace cleanses the account.
- A-Z guarantee claim. It is an ultimate guarantee that protects shoppers from any issues with third-party sellers on Amazon. If your buyer is filing the claim, Amazon can withhold the payment.
- The customer claims chargebacks and returns. Sometimes customers prefer to contact their bank instead of contacting Amazon to claim their payment to credit cards back. Unfortunately, chargebacks are a widespread problem for eCommerce and banking, but it is still unsolvable to date.
- Your seller rating. If your seller rating suddenly drops, there are too many returns and complaints, and your Order Defect Rate is growing, you are more likely to have an unavailable balance for longer than 14 days.
The core concept of an unavailable balance is pretty unpleasant for sellers since they do their best to grow their businesses. So let’s find out how to prevent it.
- Check your account health. To do it, go to the Seller Central home page, click Performance and switch to Account Health. With the help of this section, you will find out your order defect rate, account health rating, cancellation rate, late shipment, and on-time delivery rate if you use FBM. If there are some troubles with the last two indicators, consider the next tip.
- Switch to Amazon FBA. Running a business can become overwhelming, especially if you have thousands of orders to pack and ship. Human-made mistakes, in this case, can easily lead to AMZ payment delays and negative feedback from your users. So, if it becomes difficult to handle all the orders on your own, consider joining Amazon FBA. In the framework of this program, Amazon takes responsibility for packing and shipping your orders, charging you with the corresponding fees, of course.
- Build social proof. Building social proof for your store and proving to the marketplace the excellent experience you deliver is the best way to prevent available balance and many other issues with AMZ. Indeed, it is easier said than done. Building your online reputation requires daily effort, ensuring product quality, seamless delivery, and enjoyable customer service. But let’s start with the easily solvable task – gathering feedback from your users to strengthen your products’ ratings. With the help of SageMailer, you can do it with ease. This software comes with pre-developed templates to send to your shoppers, plus it instantly notifies you when you receive a new review.
- Reduce returns and claims. Some categories of products are more prone to returns. For example, closing items are returned frequently because of the wrong choice with the size or expectations vs reality mismatch. So, do your best to let your customers make sure they know what they are paying for. Optimize your product descriptions, add more clarity to them, and attract high-resolution photos and videos so that the customers can make a fully informed choice.
Pending Orders
A main basis for unavailable funds is pending orders. When a customer places an order, the payment is not instantly released to the seller. Instead, the money stays in a waiting state until the order is approved as shipped and delivery is confirmed. This safeguard helps defend both buyers and sellers from potential deception, confirming that the product is delivered before the funds are freed.
Reserve Funds
The marketplace platform may also hold a portion of your earnings in reserve. This reserved amount acts as a safety cushion to cover possible claims, refunds, and chargebacks. The reserved amount can fluctuate relying on factors like your account’s performance signs, sales history, and recent spikes in order quantity. By retaining a reserve, the marketplace ensures there are sufficient funds to address any customer care problems that may emerge.
Account Verification
For new retailers or those who have lately updated their account information, the marketplace may briefly hold funds until the confirmation process is complete. This verification ensures that all seller information is precise and follows the marketplace’s policies. While this can be irritating, it is a necessary step to prevent fraudulent activities and maintain the trustworthiness of the marketplace.
Returns and Refunds
Returns and refunds can also impact your available balance. When a customer starts a return or requests a refund, the marketplace may hold the matching amount until the issue is resolved. This practice confirms that there are sufficient funds to process the return and refund the customer if necessary. It also helps oversee the risk associated with high return rates or frequent refund requests.
The very existence of Amazon’s unavailable balance means there is a chance of facing cash flow issues. While you expect your business return rates to be faster and more extensive, the marketplace can think differently. So, it would always be wise to have a backup strategy to support your business growth if Amazon delays your payment.
Below are some ideas for boosting your cash flow.
- Savings. Indeed, as a business owner, you know that e-Commerce is unpredictable, AMZ is unpredictable, and even your buyers are unpredictable. That’s why having spare cash to cover unexpected expenses has always been an intelligent strategy. So, let’s develop a positive habit right now. From now on, allocate 10-25% of your monthly revenue and save it as an emergency fund. Sometimes, even a modest amount can be life-saving when you face an unavailable balance but still have to run your business operations and pay for them.
- Loans. There are a lot of opportunities to get a loan, and there is no need to visit a bank for it. There are P2P lending platforms where ordinary people or entrepreneurs support others with urgent cash in exchange for a particular interest. But keep in mind that a loan is always a loan. Sooner or later, you will have to repay it with interest. So, borrow money only if there are no other tactics to stay afloat. However, keep in mind that approval rates for small business owners (especially those with an online business) are low.
- Your website. Amazon will not like this tip, but the truth is that your website can also drive sales, regardless of the situation in the marketplace. So, if your business is mature enough and you have good digital marketing skills, consider creating your custom website and directing prospective leads to it. In this case, you will likely receive your income faster since there will be no intermediary between you and your shoppers. In exchange, you get additional responsibility for your online reputation and seamless business run.
Impact on Sellers
The inaccessible balance can significantly impact Amazon sellers. Firstly, it disrupts cash flow management. Inconsistent or postponed access to cash can challenge covering operational costs, such as inventory replenishment, transportation fees, and advertising efforts. Secondly, it may hamper your capability to invest in expansion opportunities, including broadening product assortments or penetrating new markets. Lastly, prolonged unavailable funds can strain your relationships with providers and service companies if receipts are delayed.
To mitigate the impact of an unavailable balance, sellers can take several proactive steps:
- Monitor Orders and Shipping: Ensure orders are processed and delivered promptly to minimize delays in fund availability. Leverage Amazon’s monitoring and notifications to maintain customers informed and decrease the risk of disputes.
- Maintain Good Account Health:Conform to Amazon’s performance metrics and policies to avoid reserve fund increases. Offer exceptional customer care, reduce returns, and professionally handle disputes.
- Verify Account Information: Keep your account information updated and promptly respond to verification requests to avoid unnecessary holds on your funds.
- Track Returns and Refunds: Proficiently manage returns and swiftly resolve refund requests to minimize the duration funds are retained.
An unavailable balance is almost impossible to avoid, but preventing payment delays is pretty much possible. To always have a cash flow for your business, get started with enhancing your online reputation since the seller and product rating are essential for your friendship with Amazon.
SageMailer can help you gather your buyers’ feedback semi-automatedly and grow your business, so give it a try now for free!
