COVID-19 Limits Seller Capabilities
As concerns over COVID-19 continue to multiply, many companies have been forced to modify their business operations. Amazon is the latest to do so, announcing that sellers who rely on Fulfillment By Amazon (FBA) will be suspended from creating new shipments until April 5.
Amazon has noticed a massive increase in online shopping since the outbreak of COVID-19 and they are quickly falling behind. They have been running low on essential items like medical supplies, groceries, and household staples so they are shifting their resources to focus on fulfilling these types of products.
That means sellers who use Amazon’s storage and delivery network for a fixed fee will no longer be able to ship nonessential products. The same restrictions apply to vendors who wholesale their products to Amazon, who then resells them at a markup. Businesses that use FBA will not be able to ship products and use Amazon’s fulfillment services until at least April 5. This policy has gone into effect for US, UK, and EU markets.
Amazon will continue to accept shipments from sellers of Baby Products, Health & Household, Beauty & Personal Care, Grocery, Industrial & Scientific, and Pet Supplies.
Supply Chain Chaos
Amazon’s supply chains have suffered during the onset of the coronavirus into US markets. Amazon is notorious for its unrivaled fulfillment services, but they are being put to the test during these chaotic times. Consumers have flocked to the eCommerce site in record numbers as they stock up on as many material goods as they can. Amazon’s supply chains have been shocked by the influx and Amazon is struggling to keep up with demand. Shutting down FBA is a drastic move and demonstrates how serious Amazon’s logistical challenges have become. Traditional shoppers transitioned to online buying causing shipment delays, labor shortages, technical glitches, and overall strain on the supply chains.
For businesses outside of these selected industries, we recommend reevaluating your selling methods and begin optimizing other channels. Amazon is not the only online marketplace so brands should be looking at diversifying their selling options during this time.
Response Best Practices
Social media platforms like Facebook, Instagram, and Pinterest offer great opportunities to reach new audiences and acquire new customers. Other larger online marketplaces include Google, eBay, Walmart, and Etsy, each having their own respective pros and cons.
This re-allocation of resources is going to leave many businesses out to dry with no method of fulfillment. However, brands that are used to using FBA are not completely out of luck. Amazon’s marketplace is still fully operational, but brands must complete fulfillment on their own. Self-fulfillment will be the law of the land until corona passes and business operations can return to normal. Transitioning to self-fulfillment will be a hurdle in and of itself, but sellers have no choice if they wish to continue selling on the Amazon marketplace. This news should motivate sellers to explore other channels and other fulfillment options as the situation matures over time.
In light of recent news, Facebook has just announced they are offering $100million worth of grants in marketing dollars to qualifying businesses. Ask Trellis if you need any help to find out if you qualify.
Trellis is officially certified as a premium marketing partner with Facebook, Google, and Pinterest. Navigating and optimizing all of these channels can be difficult, so reach out to the Trellis marketing team if you have any questions.
Many of our clients sell on Amazon’s marketplace and use FBA services. In these tumultuous times, we are advising them to rethink how and where they sell their products. Innovation is the foundation for growth and we will continue to help our clients succeed in any situation.
The full briefing from Amazon can be read below:
Hello from Fulfillment by Amazon,
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.
Please reach out to the Trellis team with any questions or concerns regarding COVID-19 and the effects it may have on your eCommerce business. Stay safe out there.