Understanding Amazon’s Deferred Sales Policy and Its Impact on Your Profitability Data

What Is Amazon’s Deferred Sales Policy?

Amazon’s Deferred Sales Policy delays the recognition of financial transactions, such as shipment revenue and fees, by 7 days. Although Amazon claims this has been a long-standing policy, many sellers were previously exempt. Earlier this year, Amazon announced plans to migrate all sellers to this D+7 deferred model by the end of September 2024.

For some regions, like the U.K. and U.S., this migration has been phased in over time. As of October 2024, many U.S. sellers have reported being affected by this change.

How Does This Policy Impact My Store?

This policy shift changes how and when financial events are recorded, particularly for shipment-related transactions.

• Before Policy Implementation: Financial events, such as shipment revenue, FBA fees, and referral fees, were recorded approximately 1 day after an order was placed.
• After Policy Implementation: These events are now recorded 8-9 days after the order date.

Example Impact

If your store transitioned to the deferred policy on October 24th, 2024:

• Orders placed on October 23rd would reflect shipment revenue and costs on October 24th.
• Orders placed on October 24th would not reflect until November 1st or 2nd.

This results in a one-week gap in recorded revenue and costs during the month of transition. However, this is a one-time adjustment, and future months will normalize to reflect the full month’s worth of data—albeit delayed by 7 days.

How to Manage This Policy Change

1. Plan for the Shift

Be aware of the transition month for your store. The reporting gap is temporary, and subsequent months will align to the new 7-day delay.

2. Adjust Internal Processes

Update your accounting or profitability reports to account for the timing shift. This might involve adjusting expectations for cash flow or revenue reporting.

3. Monitor Amazon Communications

Keep an eye on updates from Amazon regarding deferred transactions. These communications can help you stay informed about when changes are applied to your account.

How Can I Verify This in My Amazon Reports?

To understand how this policy is affecting your financial data, follow these steps:

Access Your Payments Dashboard

1. Log in to your Amazon Seller Central account.
2. Navigate to the Payments section.
3. Look at the Total balance box at the top of the dashboard.

View Deferred Transactions

1. In the Payments dashboard, find the Deferred transactions balance.
2. Click on the deferred transactions balance to see detailed information, including:
   • Orders impacted by the deferral.
   • The reason for the deferral.
   • The estimated payment release date.

Download Detailed Reports

1. Go to the Payments reports repository in Seller Central.
2. Under Report type, select Deferred transaction.
3. Click Request report to generate and download a detailed list of all deferred transactions for your account.

This report provides a comprehensive view of the financial events impacted by the D+7 policy.

FAQs

1. Will My Total Revenue or Costs Be Affected?

No, the policy only changes the timing of when revenue and costs are recorded. Your total revenue and costs over time remain unchanged.

2. Does This Policy Affect All Sellers?

Yes, Amazon plans to migrate all sellers to the D+7 deferred sales model. The timing of the migration depends on your region and seller account.

3. Can MerchantSpring Backdate My Data to Account for the Gap?

No, the data in MerchantSpring reflects what Amazon provides. As such, the 7-day gap is unavoidable during the transition month.

4. How Can I Verify the Impact?

Follow the steps outlined above to check your deferred transactions in Amazon’s Payments dashboard and generate reports for further analysis.

Need Assistance?

If you have questions or need help understanding how this change impacts your MerchantSpring reports, don’t hesitate to contact our support team. We’re here to help you navigate this change smoothly.