Payday Loan Services for Online Businesses

Deep Dive Cases: Payability

Costs and Metrics to Consider When Selling on Amazon

Selling on Amazon can be an incredible opportunity for entrepreneurs and creators of great products.  Amazon’s power lies in its established trust, credibility, and instant traffic to get exposure to millions of visitors every day.  This can be  a profitable channel for big brands, new startups, creators, authors, and much more.

However, the allure of big profits and “passive income” with little effort creates a breading ground for scams and companies ready to take advantage of sellers.  It is essential that you understand the fees associated with selling on Amazon so the total costs are clear.  The true Amazon revenue potential, scalability, and, most importantly, profitability can get obscured quickly.  The #1 reason companies fail on Amazon is not understanding fees and using instant payment companies like Payability.com 

BBB Open Complaints for Payability

Visit the BBB to see the overwhelming complaints regarding erroneous and fraudulent charges on Payability’s deceiptive hidden fee structure

The BBB is taking aggressive action to stop and inform consumers at riskPayability increasing taking more pressure from BBB & FTC on erroneous charges

What are Amazon Selling Fees

Amazon charges different fees for FBA and merchant fulfilled orders.  First, sellers can chose between a professional seller account or individual plan.  

Start by understanding a professional account versus an individual plan.

Payday Loan Companies to Avoid and Why

Just like the physical world has credit schemes stacking the odds against the small business with high interest loans and hidden fess, so does the digital world of onlline businesses.  Companies like Payability should be avoided at all costs

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Case Study:  Payability & Instant Amazon Payments

With Amazon’s two-week payment delay, you’re likely going to have cash flow challenges starting out and, sometimes, ongoing on a regular basis.  Like in regular business and life, there are financial services that prey on people and organizations in these positions.  One company we tested to see if it really delivered on their advertised promise of only 2% of sales (as pictured below), is Payability.

Google ad for payability.com showing their fee structure

How do transaction or merchant fees impact your bottom line?

First, it’s important to understand the impacts of only a 2% fee, although Payability.com’s fee is much higher than their clearly advertised.  Here’s an example:

 

Find the real Truspilot Reviews with Substance and Verified

 

Case Study:  Payability & Instant Amazon Payments

With Amazon’s two-week payment delay, you’re likely going to have cash flow challenges starting out and, sometimes, ongoing on a regular basis.  Like in regular business and life, there are financial services that prey on people and organizations in these positions.  One company we tested to see if it really delivered on their advertised promise of only 2% of sales (as pictured below), is Payability.

Google ad for payability.com showing their fee structure

How do transaction or merchant fees impact your bottom line?

First, it’s important to understand the impacts of only a 2% fee, although Payability.com’s fee is much higher than their clearly advertised.  Here’s an example:

Scenario 1:  You have $1000 in sales on Amazon

To keep this example simple, we will not cover all the intricacies of referral fee tiers based on categories, closing fees, return fees, etc.  On average, we will assume that are products were sold through Amazon FBA (we shipped the items to Amazon and they fulfilled the orders).  On average, about 15%-20% of the total sale will be fees plus the FBA fulfilment charges.  In this case we will say our items were about $30 per item and light weight. In rough numbers we would pay about $250 in selling fees and $135 in fulfilment costs for a total of $385 paid to Amazon.  Noted below as selling fees.

Next we look at Cost of Goods Sold (COGS).  I am including again for simplicity, the amount we paid for the items and how much it costs us to get them to Amazon. We will use the minimum recommendation for reselling products (sell for at least 3x purchase cost) so our COGS for our 33 items sold at about $30 would be about $330

Assuming everything was perfect (no returns, mishaps, damages, expenses for supplies, etc), the last cost to add is the “Instant Funds” service from Payability.com.  If we took it at face value, that would be 2% of $1000 or $20.  Doesn’t sound like a lot, right?  Well if it were only 2%, it might make sense for some products but let’s look at all the costs thus far.

Amazon Fees:  $385
COGS:  $330
Payability:  $20
Total:       $735

Ok, keep in mind we are leaving out a lot of expenses here and not including returns, shipping supplies, office equipment, labels and much more.  Your $10 item that you were able to sell for $30, netted a profit of only $265.  Even if Payability really only charged 2%, when you look at your net profit, that’s almost 10% of your profits and we are looking at items being sold at a 300% markup!  

Here’s where it gets interesting.  1.  Payability does not give you instant access.  They give you only 75% of your proceeds less the amazon fees.  so if you sold this $1000 over 10 days or $100 a day, you only get $19 a day instantly released.  This is because, Payability.com charges you 2% on gross sales, releases only 75% of the net proceeds of that sale, and that is based on the average amount that amazon doesn’t hold in reserve too.  So if Amazon on average holds 30% of your sales in reserve for return and cover any associated costs, you can get as little as $10 per day for using this service.  2.  Here’s where the hidden fees come in – Payability charges you 2% when the sale occurs, another 2% when the Payability reserve is released (the 25%) and again when Amazon eventually releases their reserve amount from the initial transactions of that $1000 in sales.  Sounds confusing, right?  Well that’s how they engineered it.  What you need to know is this – when it’s all said and done, you end up paying Payability.com about 6% in fees after the double charges from reserves being released (for sales that already occurred) and being charged again on that amount.  This is how they almost triple their fees.

Complaint from a verified seller in 2020:

Payability fee structure is deceptive and fraudulent. After over 9 months of using the service for standard payments (if you research real reviews you will see the payments are not next day or instant), I discovered the actual fees were almost 6% of gross sales on. Many people think it’s similar to a regular merchant where they take 2% off the net that is sent but it’s actually gross plus hidden fees. The hidden fee structure works like this – Say you have $1000 in sales in 5 days, automatically you are charged 2% on that ($40), next you get 75% of the net sales of that $1000. So if you paid $400 total in shipping fees and amazon fees, you would get 75% of $600 ($450) but before that, Amazon reserve amount is taken into consideration so it is actually even less but here’s where the trick is:

payability.com and their hidden fee scam
When Payability releases the 25% of their reserve from that period of sales you get charged another 2%, when amazon releases funds to Payability, you get charged another 2%, and finally when your reserves are released from amazon, you get charged another 2%.

During my time with them, I had $83,000 in gross sales, netted about $43,000 from Amazon, and Payability took over $4600. So the reality of Payability is 5.6% of gross sales and, in my case, over 33% of all profits. Because remember, Amazon paid out $43000 but that hasn’t factored in the Cost of Goods Sold.  As you see to the left, they falsely claimed that the seller had over $150,000 in sales when they only had $83,000 in sales!

This is similar to a payday loan company and they have load of complaints with the BBB and everywhere else. They are just really good and reputation management (and hiding fees)

This seller exported and went through every transaction during the time they used Payability.com (almost 5,000 transactions) finding the hidden fees

Categories:

Kristen Blackburn
Kristen Blackburn
2021-03-07
Heart broken:( I am a single mother of two and received bad advise from a Facebook group about improving cash flow to buy more inventory for my Amazon home business. Payability.com advertising and promises on the phone (which I recorded one of the last conversations and will be posting on YouTube, that there fees are SIMPLE, FIXED, and FLAT – WRONG, WRONG, AND WRONG. I discovered that the daily payouts never had any discernable correlation to actual sales, you get charged the 1-2% when any sale occurs for the full sales amount (shipping, amazon fees, etc as this is not like PayPal so don’t be confused) but that’s not even the worst of it.Payability.com has a clever way of charging you twice. This occurs when the amount that Amazon releases from their 25-30% reserve hold (that they normally place on your balance after any payouts) is finally released to Payability. When this happens – you are charged again another 2%. Keep in mind, you already paid gross sales when the original transaction occurred so this is the first illegal hidden fee that they charge but it doesn’t end there. Remember, when a sale occurs (whether it gets returned or anything else), you already pay the 2% “instant release fee.”**Here’s where it get’s even more fun. PAYABILITY.COM takes 25% for themselves as a reserve balance and, as you might imagine, you are charged again when that is finally released in an arbitrary way and ends up in your bank account.As an example, let’s say you found a nice item that meets all the criteria:1. Your purchase cost is $8/item and you bought 250 –Total spend for inventory+ SH = ($2025) 2. Best case scenario you sell all units and the category has one of the lowest return rates which is about 10%. You will have sold about 200-225 units or let’s just say 215 x $24.99 = $5,372.85. Hmm doesn’t seem to awful yet but lets keep digging 3. Payability gross sales fee .02 x $6,247.5 = ($124.95) remember, returns, damages, etc do not matter. You pay Payability for any and ALL TRANSACTIONSBefore we get to the Amazon fees, let’s see where we are at. We bought $2025 of inventory to send to Amazon, our sales came out to $5372.85, and so far we paid Payability $124.95. So far, we are still positive $3,347.85. But, let’s not forget about the Amazon referral fees, shipping fees, possible storage fees, reships, money spent on other useless tools, possible PPC advertising, etc. To keep it simple, we will just look at the basic Amazon fees for each sale and dive into these instant payouts. Let’s continue! Proceeds so far: $3,347.504. A good round number for a $25 sale on Amazon will have total fees of about $10 for each individual sale. In this case, we sold 250 items x $10 so there’s another $2500 gone to Amazon. Proceeds so far: $847.85 uh oohhh getting a little slim yikes!! But, as you may have guessed, we are not done. Let’s keep going!5. The instant payments, Amazon reserves, and Payability reserves. Yes payability reserves – as confusing as that sounds being its the whole point of the service, this is how it works. We already paid 2% on gross sales of all the orders (.02 x $6,247.5 = ($124.95) but Amazon held 25% back and payability did the same (still doesnt make sense why they do that) but in any case, guess what happens when the 25% is released from amazon AND payability? You probably guessed right – hello another 2% charge! In this case Amazon releases the money ($1561 over the course of a month or two while new sales takes the reserves place), gets released to Payability, they AGAIN take another 2% and bye bye another $32. Finally, don’t forget, your instant payments (by the way they are just random numbers that do not match to any sales data, is in Payability’s reserve and goes without saying another charge for that :).Let’s recap. You invested $2,025 in hopes of about $6000 in sales or about $300 in gross profits. What you get: about $600. How much did you give the great people at Payability. At least $200 of that or about 30% of ALL YOUR PROFITS!! now add zeros to all those numbers assuming your an active Seller and payability.com will be the biggest mistake of your ecomm career. They’re fees come out to 6% of all gross sales and about 30% of your profits. You don’t see a lot of review from this company because when you agree to use your service you enter into an agreement which gives them the rights to your accounts receiveables (your Amazon Payouts) so you can’t avoid it once your in their trap. Best thing to do is drain down your sales and switch to eBay before quitting them or message the guy on Instagram that goes by @bleepingamazon
Brianna
Brianna
2021-03-04
Great! Really helped me out when I truly needed it.
Evgeny
Evgeny
2021-02-25
Great company! Russ is the best ! Satisfied with cooperation
John
John
2021-02-23
Very happy with the service and the fast turnaround times. Highly recommend Payability for any fast-growing ecommerce business.
BJ Blackburn
BJ Blackburn
2021-02-12
Payability fee structure is deceptive and fraudulent. After over 9 months of using the service for standard payments (if you research real reviews you will see the payments are not next day or instant), I discovered the actual fees were almost 6% of gross sales on. Many people think it’s similar to a regular merchant where they take 2% off the net that is sent but it’s actually gross plus hidden fees. The hidden fee structure works like this – Say you have $1000 in sales in 5 days, automatically you are charged 2% on that ($40), next you get 75% of the net sales of that $1000. So if you paid $400 total in shipping fees and amazon fees, you would get 75% of $600 ($450) but before that, Amazon reserve amount is taken into consideration so it is actually even less but here’s where the trick is: When Payability releases the 25% of their reserve from that period of sales you get charged another 2%, when amazon releases funds to Payability, you get charged another 2%, and finally when your reserves are released from amazon, you get charged another 2%.During my time with them, I had $83,000 in gross sales, netted about $43,000 from Amazon, and Payability took over $4600. So the reality of payability is 5.6% of gross sales and, in my case, over 33% of all profits. Because remember, Amazon paid out $43000 but that hasn’t factored in the Cost of Goods Sold. Google Payability Fees to see their advertised fees and compare it to our case study at sitelead net This is similar to a payday loan company and they have load of complaints with the BBB and everywhere else. They are just really good and reputation management (and hiding fees)Edit 2/16/2021: Per Payability’s website and listing on Google, their financial services are simple, fixed, and a flat fee. This is simply not true. Here is the exact text from their Google listing and website:“Payability charges a simple, fixed flat fee typically between 1% and 2% of your gross sales. For example, if you are an Amazon Seller who qualifies for a custom fee of 2%, and your gross sales are $10,000 in a payment period, you will pay a $200 fee to receive daily, next day payouts.”There is no confusion. I have audited over 4,000 transactions from Amazon including everything from canceled orders and returns to charge backs and it doesn’t even come close to what they charged me for. Since the entire time I have sold on Amazon, I have never even sold as much in Gross sales as they claimed. Stay far away from this company.Also, I have not communicated my account information to Trust Pilot until after Payability’s response so it’s interesting how they would know the exact account this review is connected to.
Toys Collectibles
Toys Collectibles
2021-02-11
Brandon Ellison did a great job very friendly explained with ease and was very happy with service and this service is better than PayPal thank you Payability for providing my bussiness capital.5 stars
Jessica Kresha
Jessica Kresha
2021-02-10
Don’t let them lie to you they do go off your credit report
Damion
Damion
2021-02-09
Fantastic quick team to help add some $$ to grow our business quickly!
Steven
Steven
2021-02-02
Easy Peasy Fo ReasyI think that was more then 10 characters

What to do if you have been scammed by Payability

Contact your local Better Business Bureau here
File an official compliant with the FTC here
Payability.com Corporate Contact Information:

Payability, LLC 524 Broadway, 10th Floor
New York, NY 10012
http://www.payability.com
(646) 494-8675

Submit your complaint to bj@bjblackburn.com and learn more about the class action lawsuit 

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