Analyzing Amazon's Remittance Rate Calculation and Reasons for Low Remittance Rate
In the daily operations of Amazon sellers, the remittance rate is a crucial indicator directly related to the cash flow and economic benefits of sellers. Understanding the calculation formula for Amazon's remittance rate and the potential reasons for a low remittance rate is of significant importance for sellers to optimize their business strategies and enhance remittance efficiency.
1. Amazon Remittance Rate Calculation Formula
The key to calculating the Amazon remittance rate lies in comprehending the concept of sales remittance rate. Specifically, the sales remittance rate can be computed using the following formula:
Sales Remittance Rate = Payments received this month / Total sales this month
Where payments received this month refers to the portion of payments received for goods sold this month, excluding payments from past sales within the same month, especially applicable to sellers utilizing monthly settlement methods.
Remittance rates should be based on the actual amount received.When computing the remittance rate, sellers should base it on the actual amount received. This signifies that funds not received through documents, monthly settlements, etc., cannot be included in the remittance rate calculation. This is crucial as it provides a more accurate picture of the actual funds received by the seller.
2. Reasons for Low Amazon Remittance Rate
▪️Refunds and Returns
On the Amazon platform, buyers have the right to request refunds or returns at any time, and Amazon typically favors buyer protection by offering more refund safeguards. Consequently, sellers may encounter more refund requests, negatively impacting the remittance rate.
▪️Guarantees and Retained Funds
To mitigate risk, Amazon collects seller guarantees and retains a portion of funds. These funds could be used to handle potential refunds or dispute cases, leaving sellers without immediate access to their entire revenue.
▪️Audits and Account Freezing
To ensure platform security and compliance, Amazon reviews seller accounts and may temporarily freeze accounts in some instances. This could result in delayed remittance for sellers.
▪️Payment Cycles and Delays
Amazon establishes different payment cycles, such as bi-weekly or monthly payments. These delays in payment cycles may cause sellers to be unable to receive remittance for a period, impacting the flexible use of funds.