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How Brands On Amazon Are Being Impacted By The Coronavirus Pandemic

As things change day-to-day in the world, so are things changing in the world of e-commerce, specifically Amazon. Here are some of the latest updates and our thoughts on them:

Amazon Only Allowing New Inbound FBA Shipments In Select Categories

On March 17th, without notice, Amazon restricted the creation of new inbound shipments into Amazon’s warehouses to items only in the Baby, Health & Household, Beauty and Personal Care, Grocery, Industrial & Scientific, and Pet Supplies categories. This restriction is currently in place until April 5th. If shipments in other categories had already been created before this date but not yet sent in, they can be sent and will be received. No matter if the April 5th date gets extended or not, brands need to have shipments ready and standing by to send in. There will be a crush of incoming shipments all hitting Amazon at the same time leading to more delays of inventory getting into the warehouses.

Prime Deliveries to End Customers Facing Severe Delays

Due to increased order volume and non-peak staffing levels at fulfillment centers, Amazon has been struggling to get orders out the door in a timely fashion. The latest estimated delivery dates on most items are anywhere from a few weeks to a month or more. In our experience, Amazon always under-promises and over-delivers on these dates, sometimes with the original estimates cut in half. However, with things changing rapidly, it isn’t easy to tell if that will be the case here. Last week Amazon announced that they are hiring 100,000 full and part-time positions in the US, but obviously, it will be weeks before the effect of such a hiring blitz is realized.

To Merchant Fulfill or Not to Merchant Fulfill

With significant delays at FBA, brands may be wondering if now is the time to activate offers on their products to have inventory sent directly from their business, warehouse partner, or 3PL. For those whose stock is already running low and are also affected by current the FBA shipment restriction, it may make sense to do this. Keep in mind that if you are going to merchant fulfill orders, Amazon will still hold, you, the seller, responsible for meeting the promised ship-by and delivery-by date estimates in your shipping templates on Seller Central. These can be adjusted by you the seller, so definitely revisit them before activating any FBM SKUs. Not meeting the promised dates for merchant fulfilled orders could mean putting your Seller account at risk overall.

No Seller Central Support by Phone

With increased order volume, changes in policies and procedures, and restrictions on non-fulfillment center employees working from home, Seller Central Support is not currently accepting phone calls, and everything must be done by cases via email. Unfortunately, this equates to “normal” everyday requests taking longer to get resolved.

Delay In Orders Being Sent Out May Lead to Cash Flow Gap

Due to the delay in orders sent out from Amazon’s warehouses, there will begin to be a gap between available inventory allocated for orders and companies not getting the cash from Amazon until the order is shipped. Delays of a few days may not make much of a difference, but when you are talking about a period of weeks or more, it could have a noticeable effect on the cash flow coming from the disbursements in Seller Central.

Amazon Lending Payments Delayed for 1 Month

Late on March 26th, Amazon announced that sellers who have an active loan through Amazon Lending will automatically have their next payment skipped. Loan repayments will begin again on April 30th. Surprisingly, interest will not accrue during this period nor will the skipped payment impact future loan eligibility. It’s nice to see Amazon doing this proactively for all sellers who have loans through Amazon Lending.

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