Amazon Finance Terms

Amazon Payment Terms

The number of days in which Amazon will pay for Vendor delivered stock. Standard terms are 90 days EOM (End of Month) but quicker payment terms can be negotiated for an early settlement discount, typically 2% of the invoice price. Payment terms are triggered either by the invoice being submitted of the stock arriving, whichever is the latter.

Coop Deductions

These are discounts agreed when a Vendor account is set up or as part of the Annual Vendor Negotiation. These Amazon terms range from Damage Allowance and Marketing accruals through to Subscribe and Save or Strategic Vendor Services, all of which are deducted as a % of receipts. The deductions are made at the start of each month for the previous month’s stock received and are deducted from invoices pending payment.

Chargebacks

For a Seller Account, this is when the customer claims the goods weren’t delivered and contacts their bank or credit card company to ask them for a refund. The bank then claims from Amazon who pass this charge to the Seller.

For a Vendor account, these are fines that Amazon issues for failing to comply with operational processes. Everything from sending a paper invoice through to not showing up on time for a delivery are covered by Chargebacks.

Shortages

If Amazon can’t match the stock received to the Vendor invoice, a shortage claim is made by Amazon when the invoice is due for payment. Once the invoice payment date is due, the shortage can be challenged or a credit note raised.

Disputes

A Vendor can dispute a Coop Deduction, Chargeback or Shortage through Vendor Central. For each there are specific processes that need to be followed to claim back the money owed. For each one various forms of evidence are required to be submitted.

AP Audit

Vendors can receive a deduction called an AP Audit on their account. This is a retrospective claim against Coop deductions previously unclaimed. Each report will have very specific data which can be reconciled back to previous Coop deductions and cross-referenced against Purchase Order data to verify and validate. Sometimes a Price Audit can be received where the invoiced price differs to the price on Vendor Central at the time the payment was made. This can happen when a price increase has been accepted by Amazon but not updated on Selection Central to coincide with the invoice being submitted.