Update 3/31 – In the wake of Coronavirus, Amazon announced it will be temporarily prioritizing products coming into their fulfillment centers (FBA). Although the list of prioritized products for FBA has expanded since the initial announcement, their product prioritization deadline has no specified end date. Amazon will continue “dynamically selecting” non-essential items to purchase or accept.

Read on for more information about this developing story.

UPDATE FROM AMAZON (3/27/20):

“While we will continue prioritizing the products we can receive beyond April 5, we are now able to broaden the list. Given our constrained capacity, we are doing this on an item-by-item basis. We have updated the Restock Inventory page and Restock report in Seller Central so you can check which products are eligible for shipment creation. We consider many factors when determining eligibility, including high-demand products customers need now; current inventory levels and inventory in transit; fulfillment center capacity; and our ability to adhere to the latest health guidelines.”

What Does This Mean For Vendors & Sellers?

If you missed Amazon’s initial announcement, here’s a copy of the FBA update on March 17th:

“We are closely monitoring the developments of COVID-19 and its impact on our customers, selling partners, and employees. 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 prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers 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 fulfillment centers.”

Keep in mind, Amazon has also paused coupons for products in the Consumables category. This is also in effect through April 5, 2020.

We spoke with Pat Petriello, Director, Amazon Strategy at Tinuiti to get his take on the recent changes:

“With announcements such as the one this morning that Amazon made with regards to temporarily prioritizing products coming into their fulfillment centers, it is critical that both Sellers and Vendors remain calm and act strategically.”

“To be clear, Amazon is not “suspending sales” on items with this announcement. What it means is that Fulfillment by Amazon (FBA) as a reliable fulfillment option will be temporarily impacted for those Sellers not selling products in the categories listed in the announcement.”

“However, Sellers leveraging FBM (fulfillment by merchant) or Seller-fulfilled Prime (SFP) are not relying or leveraging Amazon’s fulfillment network and can thus continue to operate on their own resources, assuming they are set up to do so. Retail Vendors will not readily have FBM or SFP options available unless and until they are operating as a hybrid with a Seller Central account.”

“For those Vendors, they are still able to leverage dropship fulfillment and outsourced fulfillment as a method to fulfill orders while Amazon is prioritizing health-related products. Retail Vendors should also expect to see a pause in PO’s for products that are not household staples, medical supplies, or other high demand products.”

5 Considerations For Sellers & Vendors Based on FBA changes

Amazon has provided additional resources on which products can still be shipped to FBA and how this will overall impact sellers and vendors. Here’s what you need to know:

1. Amazon is prioritizing household staples, medical supplies, and other high-demand products coming into their fulfillment centers so that they can more quickly receive, restock, and deliver these products to customers. Most of the products they are accepting at this time are in the below categories:

    • Baby Products
    • Health & Household
    • Beauty & Personal Care (including personal care appliances)
    • Grocery
    • Industrial & Scientific
    • Pet Supplies 

If your product is already on its way and/or in Amazon’s fulfillment center, you can continue to sell it.

2. Amazon is taking similar steps for retail products and this is currently being applied to the US and EU marketplaces.

3. All shipments created before March 17, 2020, will be received.

4. Amazon determines if a product is a household staple, a medical supply, or both based upon the listing. At this time they are not accepting requests to re-classify listings. If your product is correctly classified and you are not able to create a shipment, then the product in question is not prioritized at this time.

5. You can still sell non-household staples or medical supplies through merchant-fulfilled channels. Amazon is making these temporary adjustments in order to prioritize household staples, medical supplies, and other high-demand products coming into their fulfillment centers so that they can more quickly receive, restock, and ship these products to customers. You may continue to sell products already in our fulfillment centers. This will be in effect March 17, 2020, through April 5, 2020, and Amazon will let you know once they resume regular operations.

Tinuiti’s Expert Shipping Checklist for Amazon Sellers:

Keep in mind, the new Amazon shipment restrictions will last approximately for 3 weeks (until April 5th). If you have enough inventory to last for 3 weeks (plus shipment time to Amazon Fulfillment Centers), then we recommend you continue business as normal.

But for those impacted by the recent restrictions, Jeff Coleman, VP, Marketplace Channels at Tinuiti is providing a list of expert tips to implement during Coronavirus:

 

 

1. Set up drop-shipping & create FBM listings for all SKUs in your catalog.

  • Prioritize listings with weakest inventory positions
  • FBM conversion rates are lower than FBA, but FBM is better than OOS

2. Stay ready so you don’t have to get ready.

  • Don’t re-allocate all your inventory. Amazon plans on resuming shipments in less than 3 weeks. If you don’t have inventory to fill their POs or ship to FBA, your competitors will and you’ll begin to lose ground.
  • Traffic & sales velocity are key factors in both Amazon organic ranking and their PO algorithm. Everyone is impacted by this shipment restriction. Keep in mind, brands that are not ready to resume immediately will be impacted much more.

3. Evaluate advertising at the SKU level.

  • Weaker inventory positions can scale back to preserve inventory & prevent stock-out
  • Strong inventory positions should not pull back at all – you have a 3-week window to capitalize on the disruption by maximizing sales velocity & organic ranking relative to competitors who might be prevented from getting back in the race

Got questions about your current inventory levels and how to prepare? Our experts are available! Drop us a line here.

 

 

Final Thoughts

Although this is a time of uncertainty, Eric Kauss, Director, Marketplace Operations at Tinuiti recommends brands remain calm and stay focused.

“FBA merchants and Vendors not in the priority categories need to not overreact to not receiving PO at the levels they were expecting. Even with the evolving nature of the situation, the long-term need to have inventory available for Amazon is essential when they return to their normal ordering pattern.”

“If a vendor does not have inventory when POs start again, Amazon will be aggressive trying to find a source. If the issue persists  – long-term demand will eventually decrease which will lead to less PO long-term as traffic will begin to decrease to the detail page (as customers realize the product is not available due to being out of stock). The key component of the PO algorithm is traffic – which is an indicator of demand.”

Additional COVID-19 Updates from Seller Central:

– FBA storage fee waiver (Added March 30) – In light of the evolving COVID-19 crisis, Amazon will waive two weeks of your inventory storage fees for products stored in the United States, Canada, United Kingdom, Germany, France, Italy, Spain, Poland, and the Czech Republic.

– Update on prioritized shipment creation, new tool to check eligibility (Added March 26) – Amazon has updated the Restock Inventory page and Restock report in Seller Central so you can check which products are eligible for shipment creation.

– Removal order delays and long-term storage fee waiver (Added March 24) – To ensure the capacity to receive, restock, and ship high-priority products like household staples and medical supplies, Amazon has temporarily paused removal operations in some of our fulfillment centers.

This story was originally published on March 17,2020. We will continue to keep you updated as this story develops. 

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