The numbers linked to the epidemic are growing, as are the sales linked to e-commerce and in detail the sales on Amazon.
The sharp increase in the number of orders on different product categories (for example grocery, basic necessities and games & toys) and the new rules for warehouse management (for example the minimum distance to be respected between logistics operators) have caused slowdowns in deliveries and inefficiencies in the proven Amazon logistics system. Just think that at the moment Prime deliveries are completed in 4-6 days while Prime users normally receive their purchases in a maximum of 48 hours.
Yesterday news that the US multinational is working on two fronts to better manage this increase: an increase in staff (the hiring of 100,000 workers dedicated to logistics is expected), and a reduction in incoming orders. In this sense, it has officially communicated to its sellers in Europe and the USA that until April 5, it will not accept new shipments considered “non-essential” for offers in FBA logistics and will reduce vendor orders with a view to prioritizing logistics to favor the categories. Of first necessity.
What are the categories that will be affected by these provisions?
- Products for children
- Health & Home Products
- Beauty & Personal Care (including personal care accessories)
- Food
- Industrial and scientific
- Products for animals
Vendors from other categories will also be protected from this choice because Amazon logistics will have fewer incoming products (from Sellers) and therefore less chance of delays.
Additionally, amazon ungating services confirm that it has removed more than 1 million fraudulent items from retailers and reported that it is pursuing those who are adopting price hike policies, while eBay proceeds with the removal of new products related to disinfectant wipes, N95 surgical masks and disinfectants for the hands.
So what to do?
The main issues to be addressed in this period are: products in stock, supply chain disruptions, increased orders in some cases and reduced orders in others.
In-stock Products: Inventory shipments from China and other countries have been heavily impacted by COVID-19 and have been delayed or not produced. As a result, suppliers and vendors are looking to extend their inventory to meet demand, with ASINs produced locally where possible. In order to stem the supply issues here are a series of tactical moves, which however must be included within a broader strategy:
Cancellation of price reductions, coupons and other promotions for inventory that is expected to run out.
Reduction of advertising investments on out-of-stock ASINs.
Postpone new launches to a more stable period in terms of research and sales, which can enhance the product, especially if it is not in line with trends (i.e. basic necessities).
Supply chain disruptions: As shipments are slowed or paused due to logistical problems, customers may not receive orders on schedule. One of the biggest disruptions right now is, as mentioned, the inability to replenish Amazon logistics for sellers with FBA shipments and the reduction in Vendor orders.
Here are the three possible cases:
Account Vendor : One solution could be to test the dropshiment program and use your own logistics, in this case adjusting delivery times to avoid delays to the customer
Seller FBA: In this case a solution could be to switch the offers of out-of-stock products with FBM logistics. If your logistics partner does not ship to the red areas (eg Bergamo, Brescia, Cremona), avoid entering the products in FBM but communicate this choice with customers via DEM, perhaps suggesting alternative products still in stock (update of 20/03 ). If the warehouse does not have the capacity, you can start evaluating a partner for the future as well.
Seller FBM: If the managed shipments are impacted by courier delays or by the reduction of warehouse operations, the management time must be increased, otherwise the customer will be delayed and the account has a poor quality score. In this case we suggest warning existing customers via DEM that there will be no blocking on their products and they will be delivered, if ordered.
In any of these cases, it is not possible to change the product category to medical or similar products (already deprecated before these measures) as it is no longer a feature available to Amazon in the shared communication to Seller and Vendor account owners:
“We determine if a product is a household staple, a medical supply, or both based upon the listing. At this time we are not accepting requests to re-classify listings. “
Increase in order volume: Many vendors and sellers have seen an increase in customer orders. In this case the suggestion is not to change the pricing policies, increasing it. Amazon for the most sensitive product categories is monitoring prices by suspending fraudulent accounts and removing the offers in question. Similarly, it is not possible to enter false information and keywords related to the pandemic (eg. Hand sanitizer against Coronavirus), under penalty of possible exclusion of the product from the listing.
Decrease in the volume of orders: if there are drops in the channel’s turnover, there can be many reasons. First of all, it is suggested to verify whether it is a generic contraction of the product category or the reduction in turnover volumes is due to
aggressive promotional activity by competing players. The activities to be undertaken can therefore be many:
Activation of cross-selling campaigns to stimulate the rotation of products with higher stock through sponsorship activities to cover the best-selling products in stock outage.
Launch a promotional plan to stimulate purchases on products that have experienced a decline in sales
Avoid a sudden stop in the campaigns but plan a temporary reduction of the advertising investment in the event of a drop in searches and category sales, optimizing only the performance campaigns by strengthening those linked to the Brand keywords.
Even in any case, it is not recommended to cover trending search keywords in this period if they are not relevant to the products in the catalog to try to gain visibility.
For more strategies, perhaps appropriate to your case, our team of experts is at your disposal for advice.
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