Thousands of small businesses on Amazon marketplace have been left worried for their futures after the retailer informed them it would keep hold of sale proceeds for over a week.
UK and continental Europe marketplace sellers were told Amazon would no longer immediately credit their accounts once an online sale was made.
Instead, it said they would receive the money a week after the product had been delivered.
Previously Amazon sellers would typically only wait up to three days to receive their money, but could now be left waiting 10 days after the delivery to be paid.
In a letter viewed by The Guardian, Amazon explained: “You may experience a one-time cashflow disruption”.
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Speaking to the newspaper, businesses said the change could cause them to go bust. While some had thousands of pounds held back, one had just over £100,000 “locked in Amazon”.
According to the publication, around 15%, or about 33,750, of Amazon’s small and medium sized businesses selling across Europe and the UK could be impacted.
However, an Amazon spokesperson said: “This policy was introduced in August 2016, and there will be no impact for over 85% of sellers in Europe.
“This process will standardise reserve policies for European sellers to ensure they have sufficient funds to cover any financial obligations, like product returns or customer claims”.
They continued: “We recognise it may lead to a one-time cash flow disruption which is why we notified affected selling partners three months in advance to them to help prepare for this change”.
The news comes after the online giant proposed changes to the way it treated third-party sellers on its marketplace in July to address concerns raised by the Competition and Markets Authority.
Etsy also recently made headlines as it faced criticism from sellers for placing 75% of their earnings on hold for a period of 45 days.
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