How to Manage Your Advertising Receivables on Amazon.com
Hi everyone, welcome to another article on our blog. Today we are going to talk about a topic that is very important for online sellers who use Amazon's advertising services: advertising receivables. What are they, how do they work, and how can you manage them effectively?
Advertising receivables are the amounts that Amazon owes you for the ads that you run on their platform. They are calculated based on the clicks, impressions, and sales that your ads generate. Advertising receivables are part of your total account balance, which also includes your product sales and fees.
Why Advertising Receivables Matter
Advertising receivables are a key indicator of your advertising performance and cash flow. They show you how much revenue your ads are generating and how much money you can expect to receive from Amazon. They also affect your profitability and return on ad spend (ROAS).
However, advertising receivables are not the same as actual payments. They are subject to adjustments, delays, and disputes. Therefore, you need to monitor them closely and manage them properly to avoid any issues or surprises.
How Advertising Receivables Are Calculated
Advertising receivables are calculated based on the following factors:
- The type of ad campaign you run: Sponsored Products, Sponsored Brands, or Sponsored Display.
- The billing method you choose: cost-per-click (CPC) or cost-per-thousand impressions (CPM).
- The currency you use: US dollars, euros, pounds sterling, etc.
- The reporting period you select: daily, weekly, monthly, etc.
For example, if you run a Sponsored Products campaign with a CPC of $0.50 and generate 100 clicks and 10 sales in a day, your advertising receivables for that day will be $50 (100 x $0.50) plus a percentage of the sales revenue (depending on your category and commission rate).
How Advertising Receivables Are Adjusted
Advertising receivables are not final until they are paid by Amazon. They are subject to adjustments based on the following factors:
- The validity of the clicks and impressions: Amazon may invalidate some clicks or impressions that are fraudulent, accidental, or non-compliant with their policies.
- The status of the sales: Amazon may deduct some sales revenue from your advertising receivables if the orders are cancelled, returned, or refunded by the customers.
- The exchange rate fluctuations: Amazon may adjust your advertising receivables if the exchange rate between your currency and the marketplace currency changes significantly.
For example, if you run a Sponsored Products campaign with a CPC of $0.50 and generate 100 clicks and 10 sales in a day, but 10 clicks are invalidated and 2 sales are refunded by Amazon, your adjusted advertising receivables for that day will be $40 (90 x $0.50) plus a lower percentage of the sales revenue.
How Advertising Receivables Are Paid
Advertising receivables are paid by Amazon on a regular basis, usually every two weeks or every month. The payment schedule depends on the following factors:
- The marketplace you sell on: Amazon.com, Amazon.co.uk, Amazon.de, etc.
- The payment method you use: bank transfer, wire transfer, check, etc.
- The payment threshold you set: the minimum amount of money you want to receive before Amazon sends you a payment.
For example, if you sell on Amazon.com and use bank transfer as your payment method, you will receive your advertising receivables every two weeks as long as they exceed $10 (or the equivalent in your currency).
A Breakdown of Advertising Receivables on Amazon.com
To help you understand how advertising receivables work on Amazon.com, we have prepared a table that shows the main features and differences between the three types of ad campaigns: Sponsored Products, Sponsored Brands, and Sponsored Display.
| Feature | Sponsored Products | Sponsored Brands | Sponsored Display |
|---|---|---|---|
| Description | Ads that appear in search results and product pages, featuring individual products. | Ads that appear in search results and product pages, featuring your brand logo, headline, and multiple products. | Ads that appear on Amazon and other websites, featuring your products or brand message. |
| Billing Method | CPC | CPC | CPC or CPM |
| Currency | US dollars | US dollars | US dollars or local currency (depending on the target market) |
| Reporting Period | Daily, weekly, monthly, custom | Daily, weekly, monthly, custom | Daily, weekly, monthly, custom |
| Payment Schedule | Every two weeks (minimum $10) | Every two weeks (minimum $10) |
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