Amazon and Coronavirus: Practical Selling Strategies for Third-Party Retailers and Vendors
The uncertainties surrounding the coronavirus pandemic have drastically changed the supply and demand in the Amazon marketplace. If you are seeing a surge in demand for your products, odds are you will see an increase in sales too. However, the constant policy changes might not automatically bring in more sales for your business.
In hopes to effectively and efficiently serve the global community during the crisis, Amazon is continuously implementing changes to the marketplace. In today’s post, we will guide you through some of the key Amazon selling strategies you can apply to your brand during the COVID-19 crisis. Before we go there, let us first talk about some of the most recent and significant changes in the Amazon marketplace.
On March 17th, Amazon announced a temporary ban on incoming shipments to its fulfillment centers to keep up with the demand on essential items, such as household staples and medical supplies, due to the coronavirus pandemic.
On March 21st, Amazon announced that it would temporarily stop shipping and taking orders on some nonessential goods on its sites in Italy (amazon.it) and France (amazon.fr) as parts of its efforts to contain the spread of COVID-19.
On April 13th, Amazon lifted the ban and allowed sellers to start shipping nonessential products again to its fulfillment centers. While the details have yet to be ironed out, some sellers have already observed changes to the fulfillment restrictions.
In the USA and Europe, third-party sellers have begun shipping some of their nonessential items.
On April 15th, Amazon said that it would temporarily suspend operations in France following a French court order that mandated Amazon to only ship essential goods while it conducts a safety review. A 1 million euro fine was imposed should Amazon fail to follow the court ruling.
Moving forward, it is safe to assume that Amazon will continue to implement changes to better serve its customers during the pandemic.
Practical Amazon Selling Strategies During COVID-19
COVID-19 Amazon Selling Strategy 1: Consider Alternative Fulfillment Options
Although Amazon has opened its warehouses to third-party retailers, it will continue prioritizing essential goods, which fall under any of these categories.
- Baby Products
- Health & Household
- Beauty and Personal Care (including personal care appliances)
- Industrial and Scientific
- Pet Supplies
This could mean that other product categories are deemed nonessential and FBA sellers might experience loss of PO (purchase order) numbers.
According to Amazon:
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.
To keep your sales flowing despite the restrictions in the FBA program, consider other fulfillment options, such as FBM (Fulfillment by Merchant) and Seller Fulfilled Prime.
With FBM, you handle all aspects of fulfillment. You list your products on Amazon, then store, pack and ship them as your customers order them.
On the other note, Seller Fulfilled Prime is a fulfillment program that allows you to deliver Prime products straight from your own warehouse. While the program has temporarily stopped accepting new registrations, you can join the waitlist if you would like to be notified when enrollment reopens.
If you are receiving high demands in your goods but unable to restock since you are not getting PO’s, try these measures:
- Distribute items through your seller distribution network or seller partners
- For 1P vendors who are at risk, consider the 3P side of the Amazon platform. Here are some tips to transition to Seller Central.
- Take advantage of Direct Fulfillment (also known as Dropship) program. This enables you to ship directly from your warehouse to customers.
COVID-19 Amazon Selling Strategy 2: Tap Into Other Marketplaces
If none of the aforementioned alternative Amazon fulfillment options work for you, try other eCommerce channels, such as Google Shopping, Walmart Marketplace, Newegg and Bonanza.
If you have excess inventory and want to turn them into profit, sell them on discovery marketplaces. Unlike in Amazon, customers in discovery marketplaces are not looking for an exact match. Instead, they go directly to the app and pick in a seemingly endless feed an item that interests them most. In discovery ecommerce, 90% of products on the site are purchased without the buyer having actively searched for them. Tophatter is one of the most popular mobile discovery marketplaces today. It offers a unique 90-second auction model, moving products quite fast.
Consignment marketplaces are great options too. Consignment is when a shop sells products for an owner. You can keep ownership of your items until they sell, that is if they sell. As the owner, you need to pay a small amount to the shop as compensation for them selling your products. You can list anything and once an order is made, you can schedule a pickup or ship the item to the corresponding location. In most cases, shipping costs are handled by customers.
If you want to get rid of your inventory but want more control over the sales channel, then consider local marketplaces such as Facebook Marketplace. Facebook Marketplace offers sellers a ton of advantages – such as free listings, real-time communication through Facebook Messenger, and the opportunity to interact with potential customers.
COVID-19 Amazon Selling Strategy 3: Reduce Amazon Ad Spend
With the unpredictable changes in the Amazon marketplace, it only makes sense that Amazon PPC campaigns will change as well.
If you are running Amazon ads, it would be best to turn off promotions for items that are out of stock, facing low inventory, and considered non-essential. Make sure to always track your own spend so you avoid wasting money promoting items that are not selling out or are not available.
Similarly, if you are running external ads to drive traffic to your product listing, reduce or completely cut your ad spend so you decrease the number of customer visits. You would not want to lose customers and get a negative seller rating because you could not meet their expectations.
While some sellers are benefitting in their niches some are hurting.
These niches are experiencing a sudden increase in sales:
- Household products
- Health items (thermometers, medical devices for seniors)
- Essentials for students and home-workers
- Home improvement and decor items
Meanwhile, these niches are struggling:
- Luxury items
- Disposable income products (hobbies, etc.)
With your Amazon ads turned off in the time being, digital channels are great avenues to get your brand in front of your target customers. Use these platforms to communicate, educate, obtain information and understand your customers’ needs and pain points during these unprecedented times.
Wondering what consumers are buying nowadays? We put together the latest coronavirus shopping trends here.
Covid-19 Amazon Selling Strategy 4: Put Your Listing on Vacation Mode
Another wise strategy is to turn on the ‘vacation status’ in your product listing. Putting your account in vacation mode is like locking your phone. Although you cannot used a locked phone, the processes are still running and opening your phone up is easier and faster.
Here’s how it works:
Step 1: Simply login to your Seller Central account and select ‘Account Info’ under the ‘Settings’ heading.
Step 2: Click on ‘Going On a Vacation’ that is in line with the Listing Status on the left side of the page
Step 3: Select the marketplace that you wish to set to Inactive. This will remove all your open listings from sale within 36 hours.
Note: Setting your Listing Status to inactive only removes listings for your self-fulfilled products. All listings under the FBA program will remain active.
Step 4: Click ‘Save’
Step 5: Once you are back from holiday, you can simply click the ‘End Your Holiday’ button and all your listings will reappear for sale.
With vacation mode, instead of closing your account, you just put it on hold for a set period of time. This prevents shoppers from making orders and keep your stocks intact. In turn, you will not get negative feedback from customers and keep your account health in great shape.
As much as we want you to have a smoothsailing Amazon selling journey, the uncertainty surrounding the coronavirus pandemic may put you in rough seas instead. Whether you are just starting out in the marketplace or a seasoned seller, the aforementioned strategies may help you overcome the situation. As the old adage goes, “a calm sea never made a skillful sailor”. So let this crisis be an opportunity for you to stay resilient, develop new skills, grow as an entrepreneur, and ultimately become a well-rounded seller.
While we have no guarantee when coronavirus will end, you can take this time to focus on your brand and overall message. Revisit your website, if you have any, and make sure that your brand is well presented. Use social media to engage your current and potential customers. Master the ins and outs of the Amazon marketplace. So when things get back to normal, you and your products are ready.
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