Amazon Vendor Economics · Glossary

Purchase Order (PO)

Updated October 25, 2026

A purchase order (PO) is Amazon's order to a first-party (1P) vendor: the quantities, cost and ship window Amazon wants, placed against the vendor's vendor code, Amazon's supplier number for the brand. Under Amazon's standard terms, "We are not obligated to purchase Products, and you are not obligated to sell Products, until you accept a purchase order." A vendor's own signed edition of the terms can differ.

The PO is Amazon's order; the invoice is the vendor's bill, and the invoice is where deductions land. The standard terms also set no notice period for Amazon simply ceasing to send purchase orders, short of a formal termination. Item-level stops are a separate case, covered by CRaP (Can't Realize a Profit), Amazon's label for a product it cannot resell profitably.

What happens after Amazon sends a PO?

The vendor confirms it, ships against it, and is measured and charged on both.

1. Confirm. For EDI (Electronic Data Interchange) vendors, the PO arrives as an 850 message carrying quantities, cost and the ship window. The vendor answers with an 855 that accepts, rejects or changes lines, and Amazon expects that acknowledgement within 24 hours. That deadline is for the reply, not for delivery. Other vendors confirm in Vendor Central.
2. Confirm only what you can ship. Cutting a quantity after you have confirmed it is charged as Down Confirmed under In Full Delivery, Amazon's chargeback for quantity defects against the confirmed PO. A charge for confirming fewer units at the first acknowledgement is not established.
3. Declare the shipment. The ASN (Advance Shipment Notification) tells Amazon what each shipment holds. Amazon cross-checks the PO, the ASN and the invoice, and a mismatch can produce a shortage claim against goods Amazon did receive.
4. Arrive inside the window. PO On-Time Accuracy, under Reports, then Operational Performance, measures whether confirmed units arrive inside the PO window: for prepaid freight, against the carrier's delivery appointment; for collect freight, against the freight-ready date.

In practice, when a down-confirm looks significant, especially ahead of a peak event, the vendor manager may contact the vendor to understand why, and if it raises worries about out-of-stocks, it could get the vendor's promotions cancelled.

The PO, the ASN and the invoice together are the paper trail the margin recovery audit works from.