Less than two weeks ago, Amazon’s Fulfillment By Amazon (Amazon FBA) community was shaken by the online retailer’s decision to restrict the kinds of inventory it’s receiving until April 5, 2020. Shipments of inventory turned away, and many FBA sellers left to fend for themselves during the COVID-19 crisis. Many sellers that still have FBA inventory are panicking after seeing delivery dates pushed to April, and some items would even take a month to deliver. Amazon is struggling to fulfill the spike in orders, causing it to hire 100,000 additional workers to bolster its capacity. However, delays and restrictions might be extended as the virus has hit workers in at least 13 of Amazon’s U.S. warehouses as of Sat., March 29, potentially crippling its capacity further. Having no access to the FBA program and FBA deliveries taking weeks to arrive, many sellers voiced concerns about losing an entire month of sales.
What Sellers Can Do Right Now
- Maintain sales velocity for affected items by converting your FBA listings to fulfilled by merchant (FBM). Make sure your items can remain in stock until you can replenish them after restrictions have been lifted. We anticipate further delays, so realistically plan for longer. If any of your FBA items will be out of stock before you can replenish them, you need a FBM listing for those SKUs. Until last week, Amazon was still giving “Buy Box” preference to FBA offers, even if the shipping time was considerably longer and the price was more expensive. In a welcome change, and for the first time known to most in the industry, Amazon’s Buy Box algorithm appears to now give preference to FBM offers from merchants who can fulfill the order faster.
- Diversify order fulfillment. The situation around COVID-19 is unpredictable, and no one can say for sure when these FBA restrictions will indeed be fully lifted. Relying solely on one party to do all your fulfillment would continue to put your business at risk. Complementing your FBA operations with a combination of your warehouse and outsourced services allows your business to keep running despite disruptions. Sellers should consider firms that connect multiple order fulfillment providers at once and provide agility and flexibility.
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