Order Processing Flow
Let's say I'm a German customer who added your product to my cart, selected the delivery method, and paid for the order. At this point, the following operations occur:
As a buyer, I receive a notification confirming successful payment for the order, including the estimated delivery date (as set by the seller).
Amazon charges the customer's payment card for the price of the sold goods and transfers the amount to its virtual account.
Amazon notifies you (the seller) of the received order.
You dispatch the goods.
You confirm the shipment and enter the tracking number for the package.
Upon entry of the tracking number, Amazon transfers the sales revenue from the order to your virtual account.
The sales revenue accumulates in your virtual Amazon account. If you have good sales metrics, the funds are transferred to your bank account at 14-day intervals, minus Amazon's fees. It's also important to note that Amazon typically retains approximately 10-30% of sales revenue as a reserve to cover potential issues with orders. (For the first 4-6 weeks, this reserve can be up to 100% of the generated turnover). This measure aims to reduce the occurrence of fraudulent sellers. Amazon provides detailed information on the reserve policy at this address.
Accounting Relationship
It's important to understand that when you offer your products on Amazon Marketplace, it is always you who sells to the end customer. It doesn't matter whether you use the FBA service (storage in Amazon's distribution centers) or ship from your own warehouses. The contractual relationship is always between you and the end customer.
Payment Receipt
The Amazon shopping environment is designed to provide customers with all the important information in one place. Any issues with an order (inquiries about products, returns, etc.) are handled by customers through the Amazon interface, where the complete order history is kept. Therefore, in most cases, customers do not require a payment receipt (non-VAT payers). You don't need to include it in the packages you ship; it's sufficient to record the sale in your accounting and submit the sales data to EET when issuing the receipt.
Typically, accounting is handled internally within the e-shop, even if the goods come from your warehouse or an Amazon distribution center. Customers who require a tax receipt for payment usually request it additionally through messages. Tax receipts are typically requested by foreign companies (VAT payers).
Amazon Fees
Selling on Amazon involves two different fees: a monthly account maintenance fee (€39) and a commission on sales (7-15%). Amazon issues a tax invoice for these fees, which is sent to the primary email address monthly and can also be downloaded from Seller Central.
This invoice is used for VAT deduction on the fees and serves as an important document for your accounting.
Payment Reconciliation in the Accounting System
From the above description, it is clear that sales revenue from sold goods can be received in your bank account at different times. To better understand the payments, consider the following:
Revenue is transferred every 14 days.
The revenue is reduced by Amazon's fees and reserves.
Amazon issues a monthly invoice for the fees.
The fees indicated on the Amazon invoice, together with the transferred revenue to the bank account, constitute 100% of the order value.
Overview and Reporting
To help you navigate better, Amazon provides a "Payment Report," which captures all orders received for the given settlement period (typically 14 days). It also clearly indicates the sales revenue and the commission for each order. The procedure is illustrated in the following image.
Additionally, Amazon offers sellers an "Order Report" (ORDERS - ORDER REPORT) and a "Tax Report" (REPORTS > FULFILLMENT BY AMAZON > TAX). The diagram below provides an overview of the data contained in each report.
💡 With the transition to API2, Amazon stopped providing VAT number details for customers in B2B orders. This information is only added after the order is confirmed, and there can be a delay of up to 48 hours. Therefore, it is advisable to adjust internal processes to allow for the retroactive transfer of the customer's VAT number from the EXP APP to your system.
Accounting
The goal is to match the respective payment (the payment from Amazon based on the transaction report) to the invoice payments, similar to how you process cash on delivery in an online shop. This involves:
Matching the payment to customer invoices (issued invoices)
Matching the payment to Amazon's invoice (received invoices)
It's important to remember that when you sell your products on Amazon Marketplace, it is always you who sells to the end customer. This is true regardless of whether you ship the goods using the FBA service (storage in Amazon's distribution centers) or from your own warehouses.
In Terms of the Contractual Relationship
The contractual relationship is always between you and the end customer.
Each sale must be recorded separately, and an invoice must be issued to the customer.
This must be done regardless of the current payment status (all orders from Amazon are already paid, but Amazon transfers the money with a delay).
It is not necessary to send the invoice to the customer (you may include it in the package if you wish), but it must be recorded in your accounting.
Amazon or our application can import individual orders (as a basis for creating invoices).
In Terms of VAT
OSS registration is required if you reach 10,000 EUR turnover from EU countries.
Local VAT registration is necessary only when using FBA (if products are stored, for example, in Germany, you need a German VAT).