Coronavirus: How It Impacts Your Amazon Business

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Update 23rd April: Most products can now be sent to fulfilment centres again, although quantities of some items are being limited

What Amazon Has Done

Today (17th March) Amazon UK announced that it is prioritising the products that it accepts into its fulfilment centre. The COVID-19 – Coronavirus – outbreak is being cited as the reason for this new temporary measure.

Amazon has stated:

“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 prioritising household staples, medical supplies and other high-demand products coming into our fulfilment centres 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 fulfilment centres.”

This means that between 17^th March and 5^th April 2020, Amazon UK is no longer allowing sellers to create new shipments containing products other than household staples, medical supplies and high-demand products.

29th March 2020 Update: They have since stated: “While we will continue prioritising the products we can receive beyond April 5” without confirming when it will carry on until.

This is what we do know:

• This impacts Amazon FBA sellers, not FBM sellers
• Any products already at a fulfilment centre, or in transit to a fulfilment centre will not be impacted
• Will be place into April 2020, but we have yet to find out when it will end
• It impacts Amazon UK sellers, as well as those that trade in international markets too

This is a very significant development for Amazon sellers. I’m a full-time Amazon seller and I don’t think I sell anything that will qualify for FBA during this time frame. For the majority of third-party Amazon FBA sellers, this means a near-three week pause in sending in new product shipments.

29th March 2020 Update: Since the original email, they have since gone on to state that restrictions will be lifted on products being classified as ‘priority'. In the Restock Inventory page > Restock report, sellers can find out which items they have sold previously which qualify for FBA shipments. This may give a little wiggle room to generate sales for some sellers, but a lot of them are still going to struggle with the state of play.

The following are considerations you will need to make to attempt to reduce the impact of these measures on your business.

Cut Back Costs

There’s not going to be a better time to reduce your outgoings. During this time you should be reducing the amount of budget you allocate towards stock (unless you have a great supplier for hand sanitiser).

If you employ a team, you may have to have some difficult discussions ahead of you. If you don’t have any work for team members – especially those tasked with shipment preparation – you may have to talk about reducing hours, or requesting that they help with other areas of the business.

The same goes for virtual teams. If you plan on reducing the amount that you spend on new stock, it’s highly likely that you’re going to need to request that any VAs work less hours, until this period passes.

Adjust Sourcing Options

Looking at the way other countries have been heading, we can only assume that it won’t be long before some sort of lockdown takes place in the UK. Whether or not it’s enforced, a lot of businesses are going to reduce their hours and bring in temporary closures. For those that buy products to resell from physical stores, it’s going to become a lot harder to get stock (if at all).

I’ll be honest and say it’s been at least a couple of years since I’ve gone out on hunts for items in this way – either in traditional shops, charity shops or at boot sales, so that doesn’t change things for me. I specialise in online arbitrage. I buy things from online businesses (and a few wholesalers) and as long as businesses are still delivering, I’m able to get stock.

For those that know their way around Amazon but see this as a reason to alter their game plan, online arbitrage may be a more suitable option. If you do decide to go down this path, there are a range of services which will find and locate deals for you. I use Tactical Arbitrage for this. Other use deal-finding services such as Online Arbitrage Deals.

This has definitely told taught everyone to diversify in every way that they can.

Dealing with Reduced Sales

This is going to be the biggest concern to sellers, and there’s very little way to get around it. Amazon closed the doors to new FBA shipments without notice, so there will be plenty of people that hadn’t fully stocked ahead of this period.

For those that have Amazon Lending loans, note that they have suspended all payments between 26th March and 30th April. This alleviates a little pressure until May, but obviously depends on sellers' ability to reignite sales in April.

Based on the SKUs I sell and the margins I aim for, my first course of action to spur on more sales is to adjust my Bqool repricing rules. I’m willing to dip my prices a little lower than usual and get a little lower towards closer to the Buy Box price, so long as I’m still making a healthy profit.

Next I would manually go through all of the ones that aren’t within Buy Box eligibility – even though that number may go into the hundreds – and see which ones need to placed into a different pricing rule bracket.

I know it will be out of the question for many sellers, but remember that FBM is an option too.

I’m going to be doing everything I can think of to get more sales going. I may even do a bit of advertising to get slow sellers moving. In spite of all of this, I know that I haven’t got enough stock to maintain consistent sales by early April. Thousands of other sellers are in the same position.

I can’t be sure, but we can only hope that most Amazon sellers will be eligible for the Coronavirus Business Interruption Loan or Self-Employment Income Support Scheme. Details are likely to change, so I’m just going to leave the links here and let you find out for yourselves if you qualify for a cash injection –

Check out this page for Coronavirus Business Interruption Loan information. Click here for Self-Employment Income Support Scheme.