So we finally signed the LOI to sell our Amazon FBA business. Buyer is paying a decent multiple, everything looks good. Then our broker casually mentions that Amazon will freeze all disbursements for 2-4 weeks during the account transfer process. Weeks. The buyer is already asking who covers the working capital gap during that time. Did anyone else get blindsided by this? How did you structure the deal around it?
ecommerce
Why Amazon account transfers freeze up cash payouts for weeks
Yes, this is standard. Amazon's Account Health/Transfer team treats any ownership change as high risk. They hold disbursements while they re-verify bank details, tax info, etc. It's not negotiabl.
we went through this in 2022. Money was stuck for 19 days. Buyer freaked out, wanted a price reduction. We ended up doing a 50/50 split on the gap with a holdback. Not ideal but got it done.
Wait Amazon actually lets you transfer accounts? I thought you had to sell the entity itself and keep the seller central login the same.
You can do either, but Amazon still freezes funds when beneficial ownership changes. Even if the legal entity stays the same, if the person behind it changes, they want to verify everything.
OP, check your purchase agreement. Did you carve out 'cash and cash equivalents at close'? Because if the frozen disbursements are technically your money sitting in Amazon's pocket, you should argue it's included in the working capital peg. Buyer mIght push back but worth reading the fine print.
SprocketInTheSky makes a good point. The problem is Amazon doesn't care who owns the cash in your contract. They just hold it. So you need the buyer to agree to treat the frozen amount as a receivable and reconcile post close.
Just sell the whole company, not the account. Then the account never changes hands. Amazon might not even notice for a while. This is not legal advice.
Not legal advice but definitely terrible advice lol. Amazon's terms explicitly require notification of ownership changes. If they find out later they can suspend and hold funds indefinitely. Bad idea.
One more thought: you can often speed things up by submitting the transfer request with a clean 'letter of authorization' from both parties and pre-verified bank account details. Still won't be instant though. 2-3 weeks is realistic.
Didn't realize the ownership change triggers a freeze even if the LLC stays. That changes our leverage. We're going bcak to the buyer with a specific reconciliation mechanism for the frozen disbursements. Appreciate the specific examples, especially the holdback idea.