Chapter 1: What significant change is happening with Amazon ad payments?
Your credit card points are about to expire as an Amazon seller.
Chapter 2: How will the new payment system affect seller cash flow?
My name is Steven Pope.
Chapter 3: What rewards and benefits will sellers lose with this change?
I'm the founder of My Amazon Guy.
And in this video, I'm gonna be walking through some breaking news with Amazon, telling everybody that in the next two weeks, you can no longer use a credit card to pay for your Amazon ads.
Chapter 4: How does the promotional credit work for Amazon sellers?
This is a huge announcement with a very short time period. And now they're just gonna pull out of your Amazon account.
Chapter 5: What are the implications of cash flow delays for Amazon sellers?
This sucks for a variety of reasons.
Chapter 6: Why is Amazon removing credit card payments for ads?
It's penny pinching galore.
Chapter 7: Is selling on Amazon still a viable option for sellers?
This is private equity getting profits out of Amazon.
Chapter 8: What strategies can sellers adopt to adapt to these changes?
This goes to show just they are thinking creatively about how they can get every fee imaginable out of Amazon sellers. So why did this maybe come about? Well, credit cards can be delayed payment 30 days. Credit card points, that can add up. That's a 2.1% or worse deal that they're having to pay MasterCard or Discover or Visa and all these other Amex players. It's even worse, I suspect.
And so Amazon's like, well, we could just turn this off and make more money. And since advertising is now their largest form of income that's easy for them to do, it just kind of made sense. So this is the memo that they just released today. Beginning April 15th, your advertising costs will automatically be deducted from your retail proceeds.
So instead of them getting paid in a 30-day rolling timeframe where they charge it and get paid from the credit card companies, now they're going to get it automatically from the payments out of your seller proceeds, which they also have like a 30-day hold on, seemingly. It may not be that long, but it feels that way. And so... It's a double whammy for the Amazon sellers. Think about this.
Imagine you spend $50,000, $100,000 a month on Amazon ads. That was an extra $1,000, $2,000 in your pocket every month. And times that by 12, that's $10,000 to $20,000 a year that you just literally just lost all of a sudden. Crazy. crazy amount of change for Amazon sellers to just absorb. This is on top of their surcharge for taxes for $4 a dollar a gallon in taxes.
And it hit at the same time, the same day. They probably didn't do that on purpose. I bet this change was thought about like six months ago and they finally enacted it and they had to program around it and get rid of the option to use a credit card. But like, man, this hurts. I have a 2% credit card cash back.
And I'm telling you as a business owner operating nearly $20 million in annual top line revenue and my expenses are substantial on my credit card. Like I got a 200K limit on my credit card just for perspective. And... I make bank on points. And as an Amazon seller, I was using that too.
And I think some people even double dip with like Amex's special perk for Amazon, for advertising to get extra points on it. And that's going away too. So ouch, ouch, ouch, all the way around. We're gonna see a lot of people upset by this. We're gonna see a lot of people crying some tears and wondering, you know, How are they going to make bank on Amazon if every single benefit and perk is gone?
I don't know what's left at this point. What is the perk of being an Amazon seller at this stage? This is like the straw that breaks the camel's back. I've got to find my right metaphor. And so they're selling this to us as no manual payment required, better flow for cash management for them, not for you, of course, and uninterrupted service.
Well, yeah, I mean, if your credit card bounces, they pause you, kind of. I'm pretty sure they could have just transferred it over to the account when the credit card bounces anyway. They're most definitely not doing this because of paused credit cards in the system. No, this is about fees, but...
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