Being an Amazon seller has always come with its hurdles, but as the world grapples with the Coronavirus (COVID-19) outbreak, sellers face a new kind of challenge. This guide will walk through what changes have arisen, how all of this affects you as a seller, and what you can do about it.Jump to our recommendations.
The Coronavirus has caused lawmakers at state and local levels to encourage and enforce that citizens stay inside their homes for anything other than essential activities. As the world works from home out of necessity, the eRetailer is the go-to source for delivered goods (the eCommerce giant already owned 52% of all online sales in 2019). Household staples and medical supplies are running low, and Amazon is racing to keep their digital shelves stocked to meet surging demand. “Getting a priority item to your doorstep is vital as communities practice social-distancing, particularly for the elderly and others with underlying health issues,” said an Amazon representative in an Operations blog post.
Amazon has recently made a few drastic changes that impact millions of third-party private label brands. While it’s something to definitely understand, don’t lose hope. There are still options, and you can get through this. You are an entrepreneur, after all. And we are relentless.
Changes that Amazon has made amid COVID-19
With its origins in China, Coronavirus has been on Amazon’s radar since mid-January 2020. The company announced changes to its fulfillment network and workforce in mid-March to address growing concern and meet surging demand.
1. Sellers cannot initiate a new FBA shipment for non-essential products
Amazon sent the following notification to all active sellers:
|Temporarily prioritizing products coming into our fulfillment centers|
We are closely monitoring the developments of COVID-19 and its impact on our customers, selling partners, and employees.
We are seeing increased online shopping, and as a result some products such as household staples and medical supplies are out of stock. With this in mind, we are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers.
For products other than these, we have temporarily disabled shipment creation. We are taking a similar approach with retail vendors.
This will be in effect today through April 5, 2020, and we will let you know once we resume regular operations. Shipments created before today will be received at fulfillment centers.
You can learn more about this on this Help page. Please note that Selling Partner Support does not have further guidance.
We understand this is a change to your business, and we did not take this decision lightly. We are working around the clock to increase capacity and yesterday announced that we are opening 100,000 new full- and part-time positions in our fulfillment centers across the US.
We appreciate your understanding as we prioritize the above products for our customers.
Thank you for your patience, and for participating in FBA.
For third party sellers, this means that you cannot create shipments to be received at an Amazon fulfillment center in Seller Central until at least April 6th. Only essential items will be accepted as inbound shipments. Essential items are listed within the following categories (but not all items are considered essential):
- Beauty & Personal Care
- Health & Household
- Industrial & Scientific
- Pet Supplies
If your inbound shipment was created before March 17, Amazon will check it in. For existing non-essential inventory in Amazon’s warehouses, you can still expect Amazon to pick, pack, and ship your products, but the process will likely be delayed as essential items are prioritized and shipping carriers race to keep up with increased demand.
If you do sell essential items, beware that Amazon has a zero tolerance policy for price gouging. The marketplace has removed thousands of listings and even threatened legal action against sellers seeking to profit from a global pandemic.
2. Amazon is strengthening its workforce to meet demand
With the surge in online shopping, Amazon is experiencing unprecedented labor needs. Because of this, the company is opening 100,000 new full-time and part-time positions in their fulfillment centers and delivery network across the U.S. Amazon extended an employment invitation to those who have been economically impacted in industries like hospitality, restaurants, and travel.
Amazon will also pay their employees an additional $2 per hour worked from their current rate of $15/hour or more, depending on the region, at least through the end of April. The company seeks to keep health and safety a top priority. “We continue to consult with medical and health experts, and take all recommended precautions in our buildings and stores to keep people healthy. We’ve taken measures to promote social distancing in the workplace and taken on enhanced and frequent cleaning, to name just a few,” said an Amazon representative.
How Coronavirus is Affecting Amazon Sellers
Amazon sellers have mixed feelings about the recent changes. Some are angry with the eCommerce giant, convinced that the moves will put them out of business. Others respect the decision and see all of this as an opportunity to pivot and grow. And most are somewhere in between, hoping for the best and making operational changes with each announcement.
Here are a few of the varied Amazon seller comments posted in response to Amazon’s inbound shipment freeze:
- Amazon just put tons of businesses out of business. Destroyed thousands of jobs amidst a crisis. Horrible joke. Absolute joke. No warning. Expect major lawsuits coming from sellers who now will go bankrupt.
- This virus is not a joke, and I am sure Amazon didn’t take the decision to suspend FBA shipments, just because they felt like it. Have you considered the fact that the Amazon employees are affected also? Some of them might even be sick, quarantined, have kids at home because of closed schools? It is not about you, it is not time to be selfish. This is a matter of life and death for many people around the globe.
- It is not doable. Most of us do not have the infrastructure in place. We do not have the boxes or packing material to do this. Amazon should have had the basic integrity to give us a few days notice so that items that were low or out of stock could be sent.
Overall, it seems that Amazon sellers are unsure of how the future will play out. With online sales rising but no opportunity for non-essential products to reach their normal fulfillment avenues, there will definitely need to be pivots made in the short-term for sales to continue.
Many sellers are calling on Amazon to pause inventory loan payments and selling plan fees for those who are ineligible to fulfill through FBA. But because Amazon’s focus is always on the customer, it’s unlikely (though not impossible) that this will be prioritized.
What Amazon Sellers Can Do Now
Because there seems to be new developments every few days, it’s important that Amazon sellers keep an eye on the news and Amazon announcements in the coming weeks. Just as we are all making decisions based on the information we have, Amazon’s executive team is pivoting as needed.
For now, here are a few action steps you can take to sustain your business and prepare for the future.
1. See if your products are still eligible for FBA shipments
Many products in the following categories are still eligible to be sent into Amazon’s fulfillment centers: Baby, Beauty & Personal Care, Grocery, Health & Household, Industrial & Scientific, Pet Supplies. If you sell within these categories, head to your Shipping Queue within Seller Central and attempt to create an inbound shipment. This way you’ll know what products you need to enact (or create) a Plan B for. Please note that many sellers are experiencing hang times when creating shipping plans because of the increased number of people trying to do this in a short period of time.
2. Outline your path(s) forward
Whether it’s pivoting your sales strategy for your existing business, planning for your future product, or even exploring options like dropshipping, you need to understand your options so that you can make an informed decision on how to move forward. It’s okay to wait and see how things unfold in the next week or so, but outline your possible paths forward so that when it comes time to make a decision, you’re ready to act. Big changes like this affect everybody, and someone is going to come out on top. But it’s going to take a dedication to the process and pushing through obstacles for you to be that one.
3. Pivot your fulfillment method
For those of you with non-essential FBA products, you’ve got three options when it comes to fulfillment: find a Prime-eligible third-party fulfillment partner, switch to Fulfilled by Merchant, or pause operations until Amazon opens their fulfillment centers to your products. Again, do your research now so that you can make the best decision for your business. You may find that a third party fulfillment partner is just as cost effective as FBA was, or you may discover that it’s best for you and your family to wait out the storm.
4. Prepare your next product
Although Amazon is only allowing certain products right now and there have been disruptions in the supply chain, this won’t last forever. Now, especially if you have some extra time on your hands, is the perfect time to use historical data to research which product you might bring to market. If you’re an existing seller, keep an eye on how your competition is handling the situation using Competitor Intelligence. And if you’re a new seller, begin the process of sourcing your very first product. The first step of the Amazon seller journey is finding a product that sets you up for success. Product Discovery makes that process incredibly easy, and it can be completed during this time. That way, your product is ready to stock when the shelves are ready.
We’re in This One Together
The fact that this blog post exists means you are not in this alone. There are a lot of uncertainties right now, but there are also new opportunities to take advantage of. Maybe the excuse used to be, “I don’t have time to work on my business.” Many of us now have time, but the circumstances have shifted. If there were ever a time to buckle down and figure it out, it’s right now.
Find out how your products have been affected. See how sales are trending in your market. Map out your options. Dig in and figure it out because that spirit is exactly what got you into this business in the first place. We’ll be here for you along the way updating you of the news. If you want to see how other Amazon sellers are handling the situation, get advice, and stay up to date on the most recent changes, join our community on Facebook: Amazon FBA Data Hunters. We’ll see you in there.
How Viral Launch can help
- Join the FBA Data Hunters community
- Watch how your competition performs and pivots with Competitor Intelligence
- See how sales are trending for your overall market with Market Intelligence
- Find a product that you can launch right when restrictions are lifted with Product Discovery
- 3 Reasons to Start an Online Business with Amazon FBA During COVID-19 - April 16, 2020
- Back in Business: Amazon Sellers Can Ship Nonessential Products into FBA - April 16, 2020
- Amazon Sellers: What to Do About Coronavirus - March 23, 2020