Since countries began responding to the threat of coronavirus by forcing citizens to stay at home and self-isolate, we have seen a large lift in sales for many of our clients in a variety of categories. FMCG products, home electronics, like laptops, and children’s toys are just a few of our clients’ products that have been flying off the Amazon shelves. This huge lift in sales has put pressure on fulfilment centres globally and Amazon has responded by freezing shipments of “non-essential” products. However, this past Monday Amazon announced they were broadening the list of products they deemed as “essential” on an item-by-item basis.
“We consider many factors when determining eligibiity, including high-demand products customers need now; current inventory levels and inventory in transit; fulfilment centre capacity; and our ability to adhere to the latest health guidelines.
How can brands adjust their Amazon logistics strategy during the coronavirus outbreak?
Whether your product listings are classified as “essential” or not, there is a lot that sellers can be doing during this time to relieve the pressure of missing out on sales. With all Amazon’s changes in place, we have been advising our clients to adapt their Amazon logistic strategies. Our Client Account team have been working tirelessly to find solutions during this concerning period and have provided some tips as to how sellers and vendors can ease some of their worries regarding their Amazon account.
1. FBA sellers should consider new shipping options if possible
FBA brands who have inventory that are not classed as essential may find that their delivery dates have been delayed on Amazon. Although Amazon has tended to ship products before the expected delivery dates, they are keen to under promise and over deliver. Conversion on many products may be affected nonetheless because of the longer delivery times.
Our account managers suggest shifting to other shipment options such as merchant fulfilled or Seller Fulfilled Prime where you will have the capability to manage your own shipment and avoid the possibility of your sales being postponed. This will help improve your delivery estimations on Amazon over your competitors and could possibly be the advantage needed to win the buy-box during this unique time.
2. Keep inventory stocked and forecast
A key issue that many sellers are beginning to recognise is keeping up with the demand caused by self-isolation and country lock down. With many sourcing factories closed due to the outbreak, having enough stock may be an issue. If sourcing has been unaffected or you hold a lot of inventory, ensure that your inventory is consistently being restocked to take advantage of the increased traffic on the marketplace. Amazon has also recently waived storage fees for a period because of the classification of priority orders over inventory. This gives essential-item FBA sellers a bit more freedom and less risk to stock more into Amazon’s fulfilment centres. It might be a good idea to consider shifting your inventory from other channels which are struggling to make sales due to the impact of the coronavirus pandemic such as brick & mortar stores to take advantage of Amazon’s offer.
However, be wary of overstocking. Despite the increase in sales, we may see a lull as consumers began to shift from panic buying to using their bulk bought products as pressures on the supply chain decrease. We should also see an increase in non-essential products as Amazon broadens their list of products that can be shipped . What is evident is that those who don’t forecast will find themselves at a disadvantage against their competitors.
3. Vendors should optimise as much as possible
Since vendors rely on selling to Amazon, it is up to the marketplace to determine how many POs they make. For this reason, Amazon has more control over what vendors can do. However, we recommend vendors to optimise their account, ensuring that all content is optimised, including product listings, Amazon stores and customer questions. This way, when stock is ordered, ASINs will have a higher conversion rate and orders will be increased.
Our trading & growth team are also investigating whether Vendor Direct fulfilment may be a suitable option for our clients to enrol in as well. However, this is an invite-only program where inventory is maintained by suppliers and shipped in Amazon’s name from there. You would therefore avoid Amazon’s fulfilment centre and save space for more priority ASINs.
Pro tip: Check your reviews! We have noticed that high-priority brands that have increased pricing recently are struggling with 1-star reviews being filed with negative comments about taking advantage of the most vulnerable. This form of negativity will affect brand reputation, Amazon SEO ranking and brand affinity. Moreover, Amazon has turned to consumers to report price gouging which may end with your listing being suppressed.
Worried about your Amazon sales since the outbreak?
The coronavirus pandemic has changed the way people consume for the moment. The uncertainty of how long self-isolation and quarantine may last means planning inventory for the future is almost impossible. Brands must be flexible in that they must be able to make changes as soon as possible to their inventory to avoid their business taking major losses.
Molzi’s account managers are constantly looking for every opportunity available for our clients, both vendor and seller alike. Both our account management and PPC teams are using their experience and ingenuity to help brands work towards forecasting based on analysing data and keeping up-to-date on all the information coming out of Amazon. Contact us today to determine what our team can do for your brand. Let us do the logistics while you focus on your brand away from Amazon.