Amazon Net 30 Review
In the past few years, Amazon has revamped its model for Amazon Business accounts. One of the changes is the introduction of a Net 30 option known as “Pay by Invoice.”
Although it sounds like just a regular purchase and pay process, the invoices option is the result of an approved credit line. It also has the benefit of allowing you to save credit cards for purchases from places other than Amazon.
Our Amazon Net 30 Review
Amazon’s Net 30 option, known as “Pay by Invoice,” can be a solid way for businesses that utilize Amazon for supplies, materials, and inventory to manage cash flow effectively and efficiently. The policies and terms are straightforward. However, qualification requirements and application processes are a bit clouded.
- Wait to Pay Business Line
- No Interest Credit Line
- On-Demand, Digital, Itemized Invoices
- Use the Business Line to Offer Flexible Payment Options
Wait to Pay Business Line
The first and most obvious feature of Amazon’s Pay by Invoice option is the ability to delay payment for items your business orders from Amazon. This is not an option that every business has, but it is something to be desired.
In many cases and for a lot of items, Amazon has the most competitive price. Not only that, but the ability to research products by reading thousands of reviews allows businesses to make the best purchase decisions possible.
Still, for many, the choice becomes less about where can I get the best price and more about where can I afford to purchase items right now. With Pay by Invoice, a business can get the best of both worlds.
Imagine being able to take advantage of special promotions like those offered on Black Friday or Prime Days and not worry about immediate payment!
The ability to buy now and pay later makes budgeting and tracking easier. Payments can be made at one time for multiple invoices, reducing the number of transactions during the month. This not only saves time but reduces the potential for mistakes.
It has been noted that the payment process may be a little complicated. It seems easy enough, as they accept payment via ACH from your bank account, wire transfer, check, or credit memo.
These are the only ways to pay, and they make it clear in their terms where to send payment by check. Scammers have been known to request payments in other ways through communication that looks official, so be careful.
Amazon will not request payment by email, and they will certainly never request cash.
No Interest Credit Line
While it is technically a business line of credit, the Amazon Business Pay by Invoice option functions like most Net 30 accounts. As a result, as long as the invoice is paid within 30 days, there is no interest.
This is huge, but it’s important to note that it is more of a benefit of a net 30 account, and most tier 1 business credit vendors, in general. However, it seems that being approved for the Amazon account is more similar to the process for tier 3 or tier 2 business credit vendors.
By nature, a net 30 account does not have interest. In most cases, however, they do offer a discount for early payment. That is the “net” part of a net account.
For example, some accounts offer a discount, maybe 10% off, if you pay the invoice within 10 days. Or, you can wait the full 30 days and pay the full amount. However, it’s not clear from Amazon that this is the case with their Pay by Invoice program.
So, while the Pay by Invoice option for businesses does allow businesses to extend payment for up to 30 days, and there is no interest, it doesn’t appear that there is a discount for early payment as is the case with many other net 30 vendors.
You could get the same effect with an American Express credit card, but that would likely be much harder to get.
On-Demand, Digital, Itemized Invoices
One big benefit to businesses that can take advantage of extended payments through their Amazon Business account is that they have flexibility in how they manage invoice payments throughout the month.
Account administrators can request invoices sent to one or more emails and access them at any time through their Amazon account. Invoices are issued when products ship. The fact that they are itemized means that reconciliation is easy and efficient.
As a result, accounting for Amazon purchases takes less time, which saves money in addition to the potential for lower prices.
Use the Business Line to Offer Flexible Payment Options
In addition to more control over their cash flow, Amazon Business Pay by Invoice customers can be a little more flexible with their customers when it comes to payment terms.
The result is they may get business that would potentially go elsewhere were it not for the pay-later option.
The ability of a small business to offer this is huge, and it isn’t all that common. Amazon Business’s net 30 option allows eligible small businesses to offer what many cannot, and thus grow stronger in a shorter amount of time.
Of course, as with any business credit, it can be either a great benefit or a huge burden. It is vital to manage it responsibly. Paying after the due date can mean negative marks on business credit reports.
It’s always important to closely monitor and reconcile invoices so you know which of your customers have paid and which have outstanding accounts. This is important for ensuring your business doesn’t fail and that your business credit doesn’t suffer.
Since users can access detailed, digital invoices whenever necessary, reconciling as you go is easy and convenient. As payments come in, simply mark them as pain on your invoice and send the complete invoice payment to Amazon at one time.
How to Qualify for Amazon Business Financing
Qualifying for this credit line is somewhat of a mystery. Amazon makes it clear that this is an invitation-only program. Each new Amazon business account is evaluated for qualification. If approved, the account holder will be given the option to activate the program on their account.
However, the only mention of what they consider for qualification is that approval is subject to a credit check, so credit history comes into play.
There is also no mention of whether they report late payments to either business credit bureaus or personal credit bureaus.
It’s a safe bet they report negative payment history to one or the other, meaning your personal credit score, business credit score, or both will be affected by paying late. This can affect your ability to get a business loan in the future.
They also state that if not immediately invited, the business should continue to build its purchase history with Amazon and manage its Amazon Business account responsibly. Accounts are evaluated regularly for approval to participate.
There is no mention of whether they check personal or business credit reports or a minimum credit score requirement. They do not state a minimum time in business requirement or annual review minimum.
That being the case, the best thing to do is run your business responsibly. Do build your purchase history with Amazon.
But also, make sure to pay both personal and business obligations responsibly and keep an eye on both types of credit reports to monitor progress in that area.
The longer you’re in business and the stronger your business and business credit report grows, the more likely an invitation becomes.
The Amazon Pay by Invoice program is a Net 30 account offered by invitation to certain Amazon Business customers. Some digital products and Amazon web services, such as gift card purchases, Amazon Music, Amazon Photos, and more may not be eligible.
Amazon Prime members may have the option to extend payments beyond 30 days to 60 or 90 days.
This a great way for those who qualify to take advantage of Amazon’s extensive inventory and competitive prices on office supplies, materials, and even inventory for resell, and have the option to extend payment on their Amazon Business purchases for up to 30 days,
The same could be done with a business credit card, but not without interest or an annual fee. Using the Pay by Invoice for Amazon purchases also allows you to keep space free on your credit for purchases from elsewhere.
