The coronavirus pandemic has caused huge upheavals in everyday life, along with major economic disruptions which will be felt for years. eCommerce retail giants are among those caught up in the impact of the COVID-19 pandemic. The impact of the coronavirus on Amazon has been massive. As a result, the company has had to make plenty of changes, including to its Fulfillment by Amazon (FBA) service. In fact, Amazon experienced a drop of 10% in just one week in February.
Because of this, Amazon was forced to make a surprise announcement on March 18, 2020. Without any warning, the company said that it would only prioritize essential supplies for its Fulfillment by Amazon service.
This left plenty of third-party Amazon sellers - who had been relying on FBA - in the lurch and unable to fulfill orders to their customers. But, just a month later, on April 13, Amazon reversed its decision - somewhat - by saying it would allow third-party sellers to start sending these Amazon FBA restricted products to its warehouses again.
The above demonstrates how tricky the current situation is for eCommerce retailers who use Fulfillment by Amazon to get orders to customers. That’s why it’s essential that you have backup options for shipping.
Don’t forget that Easyship can be useful for handling coronavirus-impacted Amazon shipping. We integrate directly with Amazon so you can easily find cost-effective shipping solutions for your orders. In this article, we’re going to take a deep dive into how the coronavirus is affecting Amazon and Amazon FBA sellers, how you can pivot your business during the pandemic, and whether the service is still a good choice.
Coronavirus Impact On Amazon Sellers
The COVID-19 pandemic took a major toll on Amazon sellers when the company announced that its Fulfillment by Amazon service would no longer be able to ship non-essential supplies.
Because of this, third-party Amazon sellers with non-essential products had to find a new solution for shipping. Nearly a month later, Amazon seems to be loosening its restrictions, but it remains to be seen exactly how the move will affect its sellers.
Amazon FBA’s Shipping Restrictions
Under the “essential goods only” restriction, FBA is only accepting shipments of products in six categories. All other products are considered Amazon FBA restricted products. Among the things you can ship now are:
1. Health & household goods
2. Industrial & scientific products
3. Beauty & personal care items
4. Baby products
5. Pet supplies
6. Groceries
Sellers from the US and the EU marketplaces are the hardest hit by these restrictions, with Amazon locked in a battle over its warehouses in France and slowing deliveries in these regions. UK sellers have also been affected, while India’s total lockdown has changed the company’s operations, too.
The coronavirus restrictions for Amazon have caused huge supply chain disruptions, and third-party sellers dealing in non-essential products have more or less been left to fend for themselves. If you already have products in Amazon warehouses, you can of course, still sell and ship them - but they will be majorly delayed.
However, these FBA restrictions don't apply to sellers who use third-party shipping services like Easyship, so they will be able to keep their revenue streams running and their customers satisfied.
What Does This Mean For Consumers?
Fulfillment by Amazon is struggling with a spike of orders from the essential categories - so much so that they’ve been forced to hire more than 100,000 workers in the US alone.
That means consumers will experience delays with deliveries. Customer deliveries on non-essential FBA inventory have been pushed out by up to a month. As of March 29, Amazon had seen workers in at least 13 of its US warehouses hit by the virus, meaning there could be even more delays in customer deliveries, or more restrictions on sellers going forward.
4 Ways Sellers Can Pivot Their Business During The Pandemic
Being turned away by FBA should not mean the end of your Amazon FBA business. Now’s the time to look for alternative Amazon FBA solutions to run your business during the COVID-19 pandemic. Let us discuss some options that are available for you.
1. Use Seller Fulfilled Prime
An obvious solution that will help you increase your sales on Amazon FBA business during this pandemic is to use Seller Fulfilled Prime if you qualify for it. Although its costs may be different from Amazon FBA fees and you may be required to use specific carriers, it is a good option to keep sales moving and the Prime badge visible on your products.
2. Sell On Other Platforms
You can expose your products to new customers if you consider selling on other marketplaces such as Etsy, Amazon, or eBay (spoiler: Easyship integrates with all three platforms!). This is a great option for FBA sellers who sell only on Amazon.
Although different sites such as eBay use different listing methods, it’s an excellent way to attract new sales and counter slower sales velocity on Amazon. Listing on more platforms will also help you if you lose your Prime eligibility after converting your listings to FBM rather than FBA.
3. Use Third-Party Selling Assistance
Trading assistants like StuffUSell can come in handy during this COVID-19 pandemic, especially if you don't have a warehouse to store your incoming stock. Trading assistants will allow you to take your stock directly to their warehouse and save you the hassles of listing and selling your stock on platforms such as eBay. This is a better option than having to wait until Amazon FBA opens its doors again or liquidating your stock.
4. Use Couriers Or Postal Services To Self-Fulfill Orders
Since Amazon is not restricting sellers from listing products, you can fulfill orders your Amazon orders yourself using other couriers or postal services. You can convert FBA listings to Fulfilment by Merchant (FBM). This will ensure your items remain in stock and listed on Amazon until FBA restrictions are lifted.
If you don't have a warehouse or carrier agreements, third-party fulfillment options like Easyship will help you streamline the shipping process with their courier relationships. Easyship can be a great alternative to FBA right now, especially since we’re offering 90-days free access to our paid plans if you sign up for a new account before June 30.
Is Amazon FBA Still Worth It During The Pandemic?
One advantage of Fulfillment by Amazon is that it handles the whole post-purchase process. Sellers can ship inventory directly to Amazon warehouses, which will then handle the packing and shipping of products to customers; they’ll also handle customer service and returns.
Pros of Amazon FBA
- It allows you to ship goods directly to their warehouse and handles the picking of inventory, packaging, and shipping, saving you a lot of hassle
- Provides customer service and handles returns
Cons of Amazon FBA
- Many goods are currently restricted on Amazon FBA
- Right now, you can't replenish your stock with Amazon FBA
- Amazon FBA fees range from $39.99/month or $0.45 - $1.35 per unit, which is expensive for most sellers
- You can’t ship non-essential products to your customers with Amazon FBA during the pandemic period
The COVID-19 pandemic is unpredictable and maybe around with us until a vaccine has been found - which could take a year or more. That may mean continued restrictions and delays with Amazon FBA, which can in turn negatively affect your business.
Amazon FBA and COVID-19
The COVID-19 pandemic has already taken a toll on Fulfillment by Amazon, forcing it to slap restrictions on sellers specializing in non-essential products. For savvy sellers, now’s the time to explore new ways to manage your fulfillment process to keep your business running and customers satisfied. There are plenty of alternative Amazon FBA ideas out there, you just have to find the right one.
Easyship could be a good choice, even after the pandemic. Our shipping rate calculator tool can help you estimate shipping costs, which will effectively keep your shipping overheads low during this period. In the meantime, we’ve created a great resource page to help you navigate the uncertainty of the COVID-19 pandemic - and we’re constantly updated it, so keep checking back!
