Having started selling, delivering your first orders, and responding to customer tickets, you might already feel more comfortable that the onboarding process is finished. Well, almost there! You still need the most important thing, right? To get paid!
The vast majority of marketplaces collect the customer payments themselves or using a Payment Service Provider. You might remember the KYC procedure we covered at the beginning of the process. The Marketplace operator will use the funds to collect their commission and other fees, as well as cover some customer claims. The rest of the balance will be transferred to your bank account provided during the account registration process. Along with that, the Marketplace will issue documents such as a settlement (describing the transactions for the respective period) and an invoice for the commission and other fees they might have (monthly subscription, advertising etc.).
It’s important to be aware of the following, in order to avoid confusion and lost proceeds from your sales:
- When does an order become payable?
- How often is the marketplace settling due balance? When are the payout dates?
- Is the marketplace holding any funds to cover for customer claims? If yes, for how long?
- How are you getting the settlement documents?
- How can you report an error in the settlement (e.g. incorrect commission fees)?
Let’s cover those points one by one.
When does an order become payable?
Almost all marketplaces will consider an order to become payable when they receive proof of delivery. The more mature and technically advanced marketplaces can scan your carrier tracking links and receive information from the carrier about the delivery status. Once the status becomes “delivered”, the order status shifts to “payable”. This means that they can give you the money for this order upon the next settlement date. Less technically advanced marketplaces simply wait for a particular period of time to expire, and then the order automatically becomes payable. The period serves as a safety buffer – during this time, the customer can file a complaint that the order was not delivered, or there was an issue. In such cases the order will not become payable until the cases are resolved. Some marketplaces allow the customer to confirm reception of the order – this will also turn the order status to “Payable”.
Keep in mind that order statuses can have a dramatic effect on your cash flow. Not being able to receive your hard earned cash is the last thing you want. Make sure order statuses are checked on a regular basis and issues are reported timely.
How often is the marketplace settling due balances?
This is always described in the contract, and can vary anywhere from every day to once per month. Most marketplaces settle balances every 7-15 days, and some give you the possibility to change the settlement frequency. It might seem tempting to receive money every day, but make sure your Finance team is not going crazy checking the numbers 7 times a week.
During the settlement process the Marketplace will generate the respective documents, and will disburse the due balance to your bank account. Your Finance team should be instructed to check documents and bank transfers on particular dates to ensure you are getting paid timely and in full.
Remember that Marketplaces can make mistakes, and they will rarely make corrections without you challenging them.
Is the Marketplace holding any funds as a safety balance?
Some marketplaces want to ensure that they have enough of your money at their disposal to cover any customer claims. So you might discover that they are not paying you 100% of the due balance, but only 80%. The remainder is held for a longer period and disbursed separately.
So make sure you and your Finance team are aware of this – otherwise you might have to waste time on internal conversations about supposedly missing money.
How are you getting the settlement documents?
Usually you will provide a Finance contact during account registration, and the Marketplace will email settlements and invoices to that contact. Moreover, those documents should be available for a download in the Marketplace back-end. Keep in mind that you need to authorize the user account used by your Finance team to have access to that section of your Marketplace back-end.
How can you report an error in the settlement?
If you detect errors in the settlement, for example – an incorrectly charged commission fee, you should be aware of the process to challenge them. Sometimes you can do this via your key account manager on the Marketplace side, but most of the time you need to contact Seller Support to solve your case. Build a solid process to check settlements and report any errors.
Need help navigating the complexity of Marketplace financial flows? Or someone to train your Finance team to check settlements? Reach out to Marketplace Agents.
This sums up the Marketplace Onboarding chapter. Next, you could try doing some Retail Media advertising, or analyze the data provided by the Marketplace.