When it comes to payments from marketplaces to Third-Party Sellers there are a few terms that can help understand the seller payment system with most marketplaces such as Amazon, Flipkart, Snapdeal, and Paytm. To reduce confusion in minor differences this is with respect to Amazon’s seller payments system.

What are payment ‘Settlements’

First up this it is important to know what is a “Settlement“. A settlement is the process initialized when Amazon triggers the payment process for a seller. This happens twice per week. The specific two days could differ from seller to seller.

What are the types of orders in a Settlement

What are the deductions in a settlement

Lastly, it is important to understand deductions and on the basis of which they occur. 

Let’s stick to the example of a Rs 7,000 order, Amazon would deduct:

  1. Sales Commission Fee which could range from 5% to 20%
  2. FBA Pick Pack Fee
  3. FBA Weight Handling Charges
  4. Closing Fee
  5. Shipping Fee (If Amazon provided, Eg. EasyShip)

These numbers change based on the marketplace. The deductions include a tax component. For this purpose we assume that the seller receives a sum of Rs 5,000 or so after all the deductions.

The actual percentage of deductions made to the original selling price varies from category to category. This is because shipping charges on a Rs 2,900 dress is roughly Rs 350 or 12.5%. On the other hand, a Rs 7,000 trimmer, it’s just 5% which again amounts to just Rs 350.

In our experience, here is what sellers should expect their deductions to be for these popular categories (broad numbers), by keeping these in mind seller have a clearer picture of what the approximate deductions will be:

If an order is returned, a seller might see some deductions NOT being reversed. For example: FBA (Fulfilled by Amazon) pick pack fee may not get reversed. A seller might have cases where a Rs.7,000 order is returned and he has a net deduction of Rs.350 on it. This is a clear loss to the seller. If the item gets damaged in transit, the loss is greater.

How long does the Amazon Seller Payment System process take? 

As mentioned above, the amount of time is directly proportional to the time it takes the order to get in the hands of the customer, sellers overall performance in terms of ODR (Order Defect Rate) and Customer Ratings. Upon delivery the process is initialized and the payment is received during the next designated day of the week. EasyShip orders are usually settled within 7 days from delivery.

From experience, we usually advise sellers not to worry too much about WHEN the order will get paid. Amazon systems are strong and reliable, they WILL get paid eventually. We provide a visual dashboard which allows the seller to see all his orders of a month and which ones are paid or not.

FBA (Fulfilled by Amazon) orders will usually get paid fastest, because they will get in the hands of the customers the fastest. This is attributed to the items being stored in Amazon’s own inventory/warehouse resulting in a quicker dispatch and delivery. Payment for FBA orders can be settled as quick as 2 days from order date! That’s one strong reason to use the FBA service.

Is there a different process for FBA (Fulfilled by Amazon), FBM (Fulfilled by Merchant), Seller-Fulfilled Prime and other systems? 

How do 3rd-Party Tools (non-Amazon) help sellers get their money? 

3rd-party tools are usually more specialised in what they offer since they offer a subset of all that Amazon’s platform offers and thus are often better in consuming that subset of information. Here are some of the benefits that Browntape brings to the table:

What else is important for Marketplace Sellers to Know? What are some mistakes to avoid?

Watch your SKU-wise profitability

Every month, the seller should look at the average deduction percentage of each SKU along with their cost price. The deductions for 2 orders of the same SKU could vary because of:

  1. FBA/FBM 
  2. Shipping distance 
  3. Discounts 
  4. Order returned or not.

Over a period of a month, the seller can understand the average deductions and hence the profitability of selling each SKU. This can influence the pricing decisions for certain SKUs.

We have also seen sellers set up a different packing process for certain SKUs to reduce the return rate and increase profit. It can impact the online selling strategy of a merchant/seller provide opportunity to reduce overheads/cost.

Return Claims

If Amazon is handling your shipping and the reason for product return is “breakage”, the seller could raise a claim with Amazon and recover a percentage of the selling price. However, claims need to be raised within 5 days of the products return. We have seen sellers setup a process of photographing all their returns and submitting claims. This has helped their profitability and saved time when amidst busy schedules.


WHEN the payment comes through is not of grave importance with Amazon. Sellers should shift their focus to HOW MUCH profit they are currently making per sale and how they can maximize/optimize that.

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