How does the Amazon factoring process work?
Your business sells products or services to another business or organization (in this case Amazon or as an Amazon 3rd party seller). For each order fulfilled, an accounts receivable invoice is generated, or toward the end of the month Amazon issues a statement promising you payment 30-60 days in the future.
Rather than waiting on a future Amazon payment, you decide to use ecommerce factoring (also known as receivables financing or accounts receivable factoring) to gain immediate access to working capital.
When you factor with fast funding, you may be able to receive nearly immediate access to as much as 93% of the full amount of each invoice factored, or the amount of the Amazon vendor statement. (The amount of your advance could be even higher for large invoices or volume discounts.) This is money that might otherwise be tied up for weeks or even months as a receivable. Any remainder (the amount of the invoice or earnings statement minus the factoring fee) is placed in reserve, pending payment of the invoice by Amazon.
Once Amazon has submitted payment and the amount of the invoice or vendor statement is satisfied, any amount held in reserve is forwarded to you as well. A low factoring fee will be your all-in cost for this type of financing in most cases, depending on the details of your factoring agreement.
We are experienced in funding Amazon vendor and other 3rd party seller statements, and we can tailor a factoring program to your business needs and goals.