How Do Amazon Points Work In 2023? (All You Need To Know As A Seller)
As an experienced Amazon seller, I‘ve leveraged Amazon Points extensively to reduce costs and maximize rewards across my business. Here, I‘ll share comprehensive guidance on maximizing Amazon Points from a seller‘s perspective. Whether you‘re just getting started or are a seasoned pro, you‘ll discover tips to boost your earning and redemption strategy.
What Are Amazon Points And Why Do They Matter For Sellers?
First, let‘s quickly cover the basics – Amazon Points allow you to use credit card reward points towards Amazon purchases. You can redeem points from programs like Amex, Chase, Citi, Capital One and more while shopping on Amazon.
As a seller, racking up and redeeming points can save you a ton on common business purchases like shipping supplies, inventory, storage, software, advertising and more. It directly benefits your bottom line.
According to Amazon‘s latest earnings reports, Points redemptions grew by 50% year-over-year. More partners and incentives mean more potential savings!
My Experience As A Seller Using Amazon Points
Personally, I‘ve used Amazon Points for years across my 7-figure Amazon FBA business to reduce overhead. Last year alone, I redeemed 650,000 points, saving me an estimated $6,500 in costs!
Here are some examples of regular business purchases I make through Amazon Points:
- Shipping tape, labels, bubble mailers
- Inventory like books/media to resell
- Storage equipment for our warehouse
- Software subscriptions for accounting, analytics, etc
- Sponsored ads for new product launches
- Inventory scanners and office tech
- Gift cards to take employees out to dinner!
The savings add up. I recommend every seller integrate Amazon Points into their processes.
Which Are The Best Credit Card Programs For Maximizing Rewards?
Not all points are created equal! Here‘s a breakdown of the top credit card programs for sellers to maximize Amazon Points earnings:
| Card | Key Perks |
|---|---|
| Amazon Business Prime American Express Card | 5% back on Amazon Business purchases, 2% back on restaurants, gas stations, wireless bills, 1% on everything else. |
| Amazon Prime Rewards Visa Signature | 5% back on Amazon purchases, 2% back at restaurants, gas stations, drugstores, 1% everywhere else. |
| Ink Business Preferred Credit Card | 3X points per $1 on shipping, internet, cable, phone services (big category for sellers!) |
| Amex Blue Business Plus Credit Card | 2X points per $1 on ALL purchases up to $50,000 annually, no category limitations. |
I recommend having both personal and business cards across these programs to maximize earnings.
Tips For Managing Multiple Cards And Accounts
When juggling business and personal cards, here are some tips:
Set up separate Amazon accounts for personal versus business purchases to simplify accounting. But you can link ALL cards to earn points!
Track points earned from each account diligently using spreadsheets. Determine the best value redemptions.
Only use business name cards for valid business expenses. Don‘t mix personal & business expenses.
Focus your highest spend categories on the cards that earn the most points for those transactions.
Meet bonus minimum spend requirements efficiently by dividing expenses across different cards.
How To Maximize Points While Following Program Policies
While it‘s tempting to rack up points rapidly through high volume, make sure you follow card program policies to avoid issues:
Never buy inventory solely to generate points – this can be seen as "manufactured spend". Mix organic business purchases in.
Don’t cycle through multiple duplicate cards from the same provider – this can flag your account.
Avoid opening too many new cards rapidly – space applications out over time.
Don’t drastically inflate purchase volume on a new card for bonus incentives – increase organically.
Violating program policies can result in points forfeiture, account closure and even blacklisting. Take it slow and steady.
Tax Implications Of Business Point Redemptions
One thing to note – while points themselves aren‘t taxable, redeeming them for business purchases may be.
For example, if you redeem 50,000 ThankYou® Points for $500 worth of inventory, that $500 value may be treated as taxable income by the IRS. Consult your accountant on proper reporting practices.
I track all my points redemptions in a spreadsheet. I report redemptions as Income and then deduct the purchase amount as an Expense to eliminate any tax liability.
Getting Started With Amazon Points As A New Seller
If you‘re just starting out on Amazon, here are some tips to integrate points from Day 1:
Sign up for a card suited for small businesses like the Amex Blue Business Plus to start accumulating points on early purchases.
Take advantage of new cardholder bonuses – put early startup costs on the card to earn 20,000+ points as a welcome offer.
Save points instead of redeeming at first while your account builds. Aim for your first redemption around 25,000 points.
Focus on cards that don‘t have annual fees – you want to minimize expenses in the early days.
Never carry balances! Pay off cards fully each month to avoid interest fees negating any rewards.
Document your points activities from the start. Make tracking redemptions part of your processes.
When To Save Or Redeem Points?
I aim to redeem points as soon as I have enough for a $100 Amazon credit (10,000 points on many programs). This gives me frequent small rewards.
However, if you’re saving up for a big-ticket purchase, letting points build before redeeming may be better. Pay attention to expiration policies – use points at least once every 12-24 months.
Also consider whether you could get better per point value booking travel vs. saving on Amazon. I value Amazon’s convenience and flexibility.
The Bottom Line
Amazon Points are hugely valuable for ecommerce businesses to reduce variable order costs. Almost every seller should participate in credit card rewards programs.
Just be sure to use business cards responsibly, accurately track redemptions, and follow program policies to build your points earning power over the long-term.
