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Amazon accused of paying suppliers late

News   •   Apr 21, 2019 10:00 +08

A screenshot of Stewart Golf's storefront on Amazon

Amazon has been accused of taking 90 to 120 days to pay one of its suppliers. Stewart Golf, a British maker of electric golf trolleys accused the world’s biggest online retailer of "institutionalised theft".

The company said Amazon would make deductions for damaged products, even after delivery when they were being stored in the retailer's own warehouses. Stewart Golf said Amazon’s management of stock was poor and claimed that its French division recently had returned about £30,000 of golf trolleys and then had charged about £5,000 for "co-operative advertising" and marketing costs.

Stewart Golf said that when there was an error, such as a discrepancy over returns, it had to try to get its money back after using an online dispute system where communication was poor and often confusing.

The company said Amazon's "reverse provision credit notices" allowed the big company to delay payment on the off-chance that it may need to return goods. In one instance, Stewart Golf was owed £35,000 and had budgeted to receive the payment, but Amazon then issued a reverse provision credit notice for £75,000, meaning that no payment was made.

Robert Hardie, Stewart Golf’s chief operating officer, said this had a damaging effect on cashflow: "The provision itself might then be reversed, but by then you’ve tripped over into the next Amazon payment period and they’ve got another 30 days of credit, leaving your suppliers unpaid for another 30 days," he told The Times.

Stewart Golf supplied Amazon through the vendor central platform, where businesses sell products in bulk to the online retailer, which sets the retail price and sells them on its platform.

In response, Amazon told The Times: "We aim for long-term, mutually successful relationships with all our suppliers and work hard to ensure they can provide our customers with the widest selection of quality products. All terms are agreed in advance with suppliers and are commonly used throughout retail.”

In Germany, Amazon's second-biggest market, the retailer is under investigation by Germany’s antitrust authority into whether it is exploiting its market dominance in its relations with third-party retailers who use its website as a marketplace.

Germany’s Federal Cartel Office said that it had received many complaints from traders about the business practices of Amazon, including a lack of transparency over how it ends relations with merchants, delayed payments and shipping conditions.

Amazon's third party platform, Amazon Marketplace, houses six million sellers such as Stewart Golf who make their living off Amazon's infrastructure, and rules, which are hard to understand and known to change anytime.

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