It is no secret that COVID-19 has had an enormous impact on businesses across the globe, including those selling on Amazon. In spite of its best efforts, the platform has felt the strain of this global crisis and as a result, the Amazon supply chain is struggling to keep up with demand.
On Tuesday, March 17th, Amazon announced the suspension of all shipments of non-essential products to its warehouses, a move intended to help consumers shopping for things that are classified as household staples or medical supplies, such as hand sanitizer and toilet paper. This is just scratching the surface, however, and many sellers are quickly selling out of stock in the fitness equipment, electronics, and office supply categories because more people are spending more time at home.
Unfortunately, in spite of its best intentions, the Amazon marketplace has become difficult to navigate for sellers who rely on revenue generated from “non-essential” items. Many sellers have turned to FBM (fulfillment by merchant) in order to keep their Amazon business afloat during this wave of uncertainty, but even that has its limits, especially if their suppliers and manufacturers have been severely impacted by the restrictions and closures imposed on businesses due to COVID-19.
Having a plan in place in terms of your supply chain is vital during this situation, and we are here to help! Here is a quick guide on how to keep your Amazon business running as smoothly as possible during the COVID-19 crisis.
8 Ways to Keep Your Amazon Seller Supply Chain in Check During COVID-19
Help minimize supply shock by diversifying suppliers and manufacturers as well as looking to domestic production
Amazon sellers may or may not be eligible to still send in FBA (Fulfillment by Amazon) shipments because Amazon is restricting new inventory based on specific categories. However, sellers can still participate in the FBM (Fulfillment by Merchant) program and in the interim.
Additionally, sellers should work with their existing suppliers to create a business continuity plan to help mitigate the effects that the pandemic is having on supply and demand. If you can, look to domestic distributors or manufacturers to ensure that your inventory is as accessible as possible. Overseas production is becoming riskier to rely on as the COVID-19 pandemic continues to disrupt foreign supply chains and as governments all around the world impose restrictions on imported goods.
It is smart to have a backup plan in case even more sanctions are put in place regarding foreign goods and imports. Also, it is wise to start a conversation with your suppliers to make sure that they have a sustainable strategy in place to ensure that enough stock is in production and available for sale to meet the demand.
Manage demand by prioritizing products classified as “essential”
Recent data has shown that sales of hand sanitizer, disinfectant products, surgical masks, first-aid kits and other non-perishables have spiked significantly over the past few weeks, no doubt in response to Coronavirus fears. Now is the time to ensure that you have maximum visibility into your supply chain for these essential items, and have enough stock to meet the current market demand.
If you do not currently have any “essential” items in your Amazon catalog, source or develop products that fall into this category
One of the best ways to continue to generate revenue on Amazon in this current business climate is to pivot and fill the high demand for essential items. If you have any items that you currently sell in this category that are not in your Amazon catalog, now is the time to get them listed and selling through FBM. When Amazon lifts restrictions on FBA shipments, you can then switch these listings to FBA.
Maintain consistent pricing and play by the rules
While it may be tempting to increase prices of essential items at this time, capitalizing on this crisis will get you in hot water with Amazon. Price gouging is against Amazon’s rules and regulations and if a seller is caught raising prices exponentially, Amazon will be swift to take action by suspending your listing and possibly even your account.
Keep lead times as short as possible and shipping as fast as possible
As a result of the massive wave of “panic” buying, Amazon has shifted priorities to fulfilling orders for essential items first, and as a result, lead times for non-essential items is currently pretty lengthy, even up to 6 weeks out in some cases. One way to get ahead of the game is to take advantage of this situation by using FBM and shipping items out quickly to make sure your customers receive their order as fast as possible.
Take advantage of this time to exceed customer expectations and generate new reviews
Exceptional customer service is always important, but even more so now in the current climate. Armed with the information above, you can actually make FBM work in your favor and beat the slow Amazon shipping and delivery times that are currently in place for non-essential items. Customers won’t just be grateful for the quick arrival of their order, but they may even be more willing to leave a review, which can help boost the ranking of your product page in the future.
Use this time to optimize your listings, create cutting edge A+ Content, and build out your Brand Store
Most sellers aren’t even thinking about the way their products are showing up in the A9 algorithm, and you can use this to your advantage! Whether it is doing a fresh round of keyword research and optimizing your product listing copy with updated search terms, building out your Brand Store (finally!), or creating engaging video content to add to your product page. Stay ahead of the competition by using this time to focus on ways to make your products stand out from the rest. There is never “down time” on Amazon!
Embrace the present, but plan for the future
While it might be challenging to see past the current situation, try to think about the marathon, not just the sprint. The restrictions imposed on Amazon sellers are temporary, and your success depends on your ability to see the bigger picture while balancing current demand and delivery.
Moving forward, it is vital for all sellers to create a concrete strategy to keep their supply chain under control during this crisis. Protecting your Amazon revenue as COVID-19 continues to wreak havoc on the global economy is the key to successfully navigating the Amazon platform at this time. During this time you may have to explore a variety of shipping options in order to discover the best channel for your business to continue operating as close to normal as possible. Remember, any movement of your inventory is a positive sign and we are here to help you keep your Amazon business running smoothly while working with the challenges at hand. Here is a quick breakdown of the different shipping options currently available:
Fulfillment by Merchant (FBM)
Right now FBM is your best shipping solution to stay relevant and competitive, even if you currently have products in FBA. If you have the capability or the desire to learn how to fulfill orders via FBM, now is the time to make the shift. Adjust your shipping settings to ensure that you are meeting the shipping times and don’t count on Amazon to be sympathetic to these challenges. Taking control of your shipping times, even if they need to be pushed out in order to maintain a positive standing with Amazon, is imperative during this time.
Right now, FBA is not the place to be if you are selling non-essential inventory (per Amazon’s guidelines) but you can consider shipping FBM instead. This will allow you to keep selling. The most important thing to note is that you need to be 100% sure that you can meet your ship times and metrics for selling FBM. We suggest starting small. You don’t want to ruin your account health - it’s easier to do than you may think.
If you are currently an FBA seller and you have inventory in Amazon’s warehouses but you are selling in a non-essential category, it’s okay. Keep your inventory there and Amazon will still sell it for you under the FBA guidelines. Right now you may even be seeing a spike in sales. However, when inventory runs out, in a non-essential category, Amazon will not allow you to replenish. So, what other shipping options can you set up?
Fulfillment by Amazon (FBA)
Third Party Logistics (3PL)
If you don’t have warehouse or fulfillment capabilities look into a 3PL service. This would enable Amazon FBM but could also be used to fulfill other sales on different channels.
Seller Fulfilled Prime (SFP)
Unfortunately, if you are not already enrolled in this shipping option you can not sign up at this time.
As always, we are here to help you navigate any challenges that you may encounter during this difficult time. If you have any questions about how you can create your own COVID-19 strategy, please contact us - after all, we are better together!