What Amazon Sellers Need to Know to Stay in Business This Pandemic

The COVID-19 pandemic has produced radical changes in terms of online selling. It has affected both Amazon sellers and consumers in unparalleled ways. The pandemic has caused Amazon businesses to create adjustments and adapt to changes to survive. A new type of economy has emerged, which they refer to as a “quarantine economy,” and this economy is a result of businesses trying to persist while currently on self-isolation.

As Amazon sellers, here are some essential things that you have to know about online selling changes due to the pandemic:

Essential vs. Non-essential deliveries

If you are an online seller of essential goods, chances are, your Amazon business this pandemic is probably still thriving despite various adjustments. Since the outbreak of COVID-19, the demand for essential commodities such as milk, toiletries, food, medical supplies, have skyrocketed, and Amazon announced during the middle of March that non-essential FBA shipments from Amazon’s third-party sellers would be on hold.

Amazon has enumerated the following categories as essential:

  • Baby
  • Health and Household
  • Grocery
  • Beauty and Personal Care
  • Pet Supplies
  • Industrial and Scientific

If an Amazon seller’s products are not within the given categories, they will not be able to send their shipments to the fulfillment centers of Amazon temporarily.

On March 31, Amazon offered a waiver for two weeks of inventory storage fees for products stored in selected countries. Eventually, on May 5, Amazon waived long-term storage fees even later than the original May 15 schedule.

Disruption of the global supply chain

Most of Amazon sellers’ goods are from China, which is also the origin of the COVID-19 outbreak. The online selling industry is currently feeling the impact of the coronavirus pandemic. Amazon sellers have significantly seen a decline in sales, and that is why several sellers are looking into other countries for supplies. By searching for other possible areas to source products, this information may help sellers to stay afloat even with the current pandemic.

Sellers will be experiencing out-of-stock issues; that is why Amazon has also extended its returns window. Before the coronavirus pandemic, shoppers have only 30 days to return their purchases. However, due to delays, shoppers have been given until May 31 to return purchased goods and products made between the start of March to end of April.

Reduced consumer spending

The pandemic has also resulted in a decline in consumer spending. Nonetheless, money has been directed towards more essential goods. Searches on Amazon’s essential products have increased, such as rice, bottled water, and toilet paper. Searches on non-essential goods have declined, too, such as office supplies, furniture, and party needs.

More work-from-home setups have increased demand for products such as webcams, computer monitors, office chairs, home gym equipment, learning resources for kids who are out of school, and items related to home entertainment.

How to Survive

There is no certainty on the length of the crisis, but Amazon sellers will have to adapt to changes to survive:

  • Pause or reduce advertising-related expenses on Amazon to cost-cut;
  • Fulfillment by Merchant may be a more viable option to protect your seller’s account health;
  • Modify your business models to lessen the need to have supplies sourced from far countries;
  • Improve your brand even further and learn how to optimize your presence in Amazon so you are ready when everything’s back to normal;
  • Communicate with customers and create promotions to maintain online presence and relationships;
  • Stay on top of all the changes and stay informed.