cashflow

Amazon’s new terms

Eoin Purcell

All’s fair
On the face of it, Amazon’s latest ploy is a fairly decent deal for publishers. For only 2% extra discount you can get paid after 15 days. That’s wonderful, it reduces the time between selling a book and receiving the cash and hopefully therefor makes a publishers cash-flow work better.

But think it through, firstly this is THE PUBLISHERS Money. Secondly if you opt out here is what will happen:

Those publishers who do not offer the extra discount will see their payments made on Amazon’s “standard terms”—effectively 60 days. This means a publisher who sells a book through Amazon in April would not be paid until the end of June. Under the revised terms, a publisher would be paid on 15th May—a full 45 days earlier.

Ouch. That 60 day window is fairly significant.

And I have another fear. If amazon get you onto this 2%-15 days option, what happens in two years time when they make it 2.5%. Once you are on a 15 days cycle, you’ll not want to come off it, especially if Amazon is a significant customer.

Yes, I’m not sure this is a good idea. Far better to accept the longer trade terms and savagely manage the cash-flow issues it presents I think!

Weather is changing this evening,
Eoin