Amazon has partially relented following a row about new rules affecting thousands of marketplace sellers and is now releasing some of their sale proceeds.
The online retailer had told many of its sellers in the UK and continental Europe that it would now hold on to the proceeds of sales for more than a week, rather than crediting their accounts immediately a sale was made. Some small firms said the move – first revealed by the Guardian – could force them out of business.
Amid a growing outcry, and after it emerged that a UK government minister was pressing Amazon for answers, the company revealed at the weekend that it was delaying the rule change for several months for some sellers, typically until 31 January next year.
However, one seller told the Guardian that while this was a “small victory”, it was not enough, as it “only delays the pain” until January.
Affected sellers had said their businesses could collapse as they would not receive payment until a week after an item had been delivered, with money not feeding into their bank account until three days later.
“You may experience a onetime cashflow disruption,” Amazon wrote in a letter seen by the Guardian this month.
Amazon has said it has 225,000 small- and medium-sized businesses selling through its marketplace across Europe, including the UK. About 15% of its sellers, or about 33,750, most of whom signed up before 2016, could be affected by the change.
Some sellers said they could go bust as they had thousands of pounds held back. One said they had just over £100,000 “locked in Amazon”.
On Sunday, Amazon revealed that it was “extending the transition date for a small number of sellers who have contacted us and need support”, adding that it was “listening to sellers’ concerns”.
One affected seller told the Guardian that Amazon had released her funds. She shared an email she received from the company stating: “We understand that the transition to this policy on 3 August has caused a onetime cashflow issue for your business. To support you in preparing for the policy change, we have extended your policy transition until 31 January 2024.”
The seller said that while she and others were pleased that this had happened, “this only delays the pain of it until January 2024. We would like reasons as to why this is even necessary.”
Before the change in policy, it emerged that the UK’s small business minister had written to Amazon asking how it planned to help small sellers affected by the new rules.
In his letter to John Boumphrey, the head of Amazon’s UK business, seen by the Guardian, Kevin Hollinrake MP wrote: “I would be grateful if you could explain how Amazon intends to help mitigate the impact on its sellers of this change, as this is a challenging time for many small businesses who are already struggling with cashflow issues.
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“Small businesses are a vital element of the UK economy, and platforms such as Amazon are important in helping small businesses access global markets. I am sure you will share my desire to ensure the livelihoods of small businesses are not being jeopardised by Amazon’s approach.”
Confirming the rule change delay, an Amazon spokesperson said: “The policy to pay businesses seven days after delivery date was introduced in August 2016 for new selling partners, and already covers the vast majority of sellers.
“A small number of sellers transitioned to this policy last week, which ensures sufficient funds to cover product returns or customer claims, and many have access to funds from their sales made since.
“We are listening to sellers’ concerns and are in contact with those who have experienced a one-time cashflow disruption.”
The rival online marketplace Etsy was forced to withdraw a policy, introduced in late May, of holding back as much as 75% of some sellers’ takings for at least 45 days.
UK vendors boycotted the craft marketplace over the hold-up in payments, forcing Etsy to say it would reduce the amount held back. The most common level of reserve is now expected to be 30%.
