Selling on Amazon: FBA Insights During the Covid-19 Crisis

Covid-19: The Great Retail Shake Up 

The impact of the Coronavirus has been swift and far reaching, we are part of a moment in history that will shape how society lives well into the future. Aside from the obvious health issues, the economic impact will ripple for many years to come. How we do business globally is fundamentally changing and continues to evolve as the pandemic shows no signs of slowing. The impact of Covid-19 on the retail industry has been like no other.

The retail industry has been left spinning with enormous spikes within the e-commerce sector and simultaneously complete carnage within traditional bricks and mortar storefronts. According to the U.S. Department of Commerce, consumers spent nearly $212 billion on e-commerce between April and June 2020. An increase of 32%! While physical storefronts close, online sales continue to trend upwards as shoppers take to their computers and phones to buy goods. 

This is especially true for Amazon, where the company reported sales have soared 26% to $75.5 billion through the end of April 2020, up from $59.7 billion the same quarter last year. Join us as we take a look at how the pandemic is impacting e-commerce and how smart Amazon private label sellers can ensure they are on the right side of history once the dust settles. 

Clever Inventory Selection A MUST For Amazon FBA Sellers During Covid-19

The pandemic hasn’t treated all e-commerce players equally. Consumer spending has been geared towards categories such as groceries, office supplies, home decor, and electronics just to name a few. Amazon tripled its year-on-year grocery sales during Q2 2020 with home entertainment closely following. Many households have reined in their spending on non-essential items during this time of economic uncertainty. With nowhere to go and no one to see, some of the hardest-hit sectors have been fashion, luxury, and travel items.

The pandemic has prompted a radical shift in buyer behavior and has ultimately accelerated the brick & mortar retail apocalypse. With people under lock down orders the demographics for online shopping are changing and the opportunity to reach a new or expanding market has never been greater. Sellers who are thriving during these ‘unprecedented’ times have adapted to consumer demands and make smart data driven decisions about their products and services. 

The data doesn't lie! Private label sellers armed with the tools to analyze market trends are quickly capitalizing on expanding niches. Being able to see exactly what is selling, consumer preferences and quickly sourcing manufacturers who can deliver the goods ensures these sellers are primed for success. The statistics show Amazon sellers who deliver high quality, in-demand products are coming out on top and it’s not too late to join them on the podium. 

How Coronavirus Has Changed The Shipping And Fulfillment Landscape.

The global stay-at-home orders have forced people to reconsider their consumer habits. People who have never used e-commerce services in the past are now filling their digital shopping carts on a regular basis. This exponential growth coupled with pandemic supply chain disruptions has wreaked havoc for e-commerce and bricks & mortar retailers alike. A study by the Institute for Supply Management found almost 75% of the 628 businesses surveyed had experienced supply chain disruptions as a result of the COVD-19 pandemic. 

Having the digital shelves empty during a time of peak demand is every seller's worst nightmare. The same study by the Institute for Supply Management found 57% of respondents had experienced longer lead times for orders with suppliers in China. In addition many sellers have been faced with increased transport costs and quarantine delays. 

How Can Smart Sellers Adapt To Supply Chain Disruptions? 

• Communication! Talk to your suppliers early about production requirements and potential delays. Factor additional costs from delays into your financials and if necessary communicate expectations with your customer base. 
• Build inventory & consider using a 3PL. Ensure you have enough stock to see you through peak demand periods. If you’re unsure of demand or have been affected by Amazon inventory restrictions you may consider using a 3rd Party Logistics company who can store excess stock in a centralized location for easy shipment to Amazon when needed. 
• Source a backup supplier. Have you heard the saying ‘don’t put all your eggs in one basket’? Well the same could be true for relying solely on one supplier. We understand the supplier relationship takes time to forge however having a backup supplier, particularly one in a different geographical location can be a lifeline during times of disruption. Let our Easy Source tool help connect you with your next amazing supplier and even refine your search results by location. 
• Temporarily reduce spending. If you’ve experienced a drop in sales due to the pandemic consider reining in your advertising spending. Use this time to become a master of your field and ensure your listing is primed for success for when things return to normal. Is your listing fully optimized, do you have quality images and video? Get all your ducks in a row for a great re-launch. 

Is FBM The Key To Winning The Buy Box?

Whilst the pandemic has been a massive windfall for Amazon it has also caused growing pains for the e-commerce giant. The increased demand has caused Amazon to restrict the flow of inbound FBA inventory to ensure adequate warehousing is available. Amazon is giving preference to essential goods (baby, health & household, beauty & personal care, grocery, industrial & scientific and pet supplies) and imposing severe stock restrictions for sellers outside these categories. In addition, the influx of orders has put pressure on Amazon’s once stella shipment network with many buyers experiencing order delays. 

As a result some sellers are choosing to use FBM as an alternative to FBA. To recap, FBM (Fulfillment by Merchant) allows sellers to fulfill their own orders whereas FBA (Fulfilled by Amazon) relies on the Amazon network for order deliveries. Using FBM allows sellers to control their own inventory levels and utilize a shipping network that may currently be faster than Amazons. The FBM role can be done in-house or even outsourced to a dedicated Amazon FBM fulfilment partner which is perfect for international sellers.  

FBM is also not an all or nothing solution, it can operate concurrently with FBA and ensure that you’re always in stock and ready to swoop when your competitors are hamstrung by current Amazon inventory restrictions. However it’s essential to ensure your FBM logistics network is up to scratch as shoppers have the ability to leave negative feedback based on the speed and quality of your delivery. 

Covid-19 Resources All Amazon Sellers Should Have!

Coronavirus is reshaping the way the world does business, prominent multi-million dollar seller and eCommerce veteran Ezra Firestone shared … “This pandemic will fast forward the growth rate of eCommerce in America and across the world 5 years ahead of where it would have been.”

The ZonGuru team has put together exclusive data-driven documents – each one carefully crafted to provide answers to the question marks that loom in the shadow of Covid-19 (100% Free to Download), simply enter your email address on the sidebar to access the goods. These documents are a must for anyone serious about starting or expanding their current Amazon business. We’ve done the research so that you’re armed with the knowledge you need to succeed in a post Covid-19 world.

“The Biggest Movers”: Unique Amazon keyword data showing which categories are seeing the biggest losses and gains so far in 2020.

“Private Label and eCommerce: Reshaping How the World Does Business In The Covid-19 Era”: The full White Paper with state-of-the-nation and actionable steps to help you grow your online business (field-tested by 7 & 8 figure sellers).

“Perfect Product eGuide”: Our 100+ page guide to help you find your perfect product to sell on Amazon (with 60+ Live examples).

What Does The Future Hold For Amazon Sellers?

The future for E-Commerce looks bright indeed. The pandemic has fundamentally changed the way we live, work, and shop. With global retailer Amazon bringing everything into arm's reach of a mobile phone, third party sellers are reaping the reward of the juggernauts tremendous network and customer base. The biggest misconception is that it’s too late to join the party, it’s simply not true. Third-party sellers launching during 2020 have seen amazing results, with the right know-how, resources, and seller tools these online retailers will continue to thrive post the pandemic era. 

If you’re considering starting an online business, or you’re optimizing an existing online business, then you’re going to want to access the resources on offer. Hear from experts that are currently growing on Amazon (compared to the same time period last year) to learn what they are doing to increase engagement with customers and streamline processes to ensure healthy business growth … because believe it or not … it’s possible to come out on top post-COVID. Simply enter your email address on the sidebar and we’ll deliver the essential resources straight to your inbox.