UPDATED April 7, 2020.
This article has been updated to reflect Amazon’s most recent policies and procedures.
Coronavirus (COVID-19) is impacting the world. The health scare is also impacting travel, work, and consumerism. While taking care of yourself & family, as well as following quarantine protocols to prevent spreading the disease, how do you continue to run an effective eCommerce business?
What Can You do to Stay Safe?
During the state of emergency this pandemic is causing, we advise caution. Taking care of yourself & family while preventing the spread of disease is of the upmost importance. Also make sure to check your local news sources and government agencies for regional details and restrictions. Some areas are impacted more severely than others. Even if there are no reports of the virus in your area, it is still a good idea to practice basic precautions.
Remote Working Where Possible
Many freelance and remote working groups are calling this a social experiment in remote work. While that may sound tongue-in-cheek, self-quarantine is the most effective method to help contain the virus. The ability to work remotely is quickly becoming necessity.
eCommerce may in essence be digital, but there is a lot of physical and in-person labor that goes into maintaining a successful eCommerce business. If possible, we advise workers to log in from home instead of the office. While many business need some on-site staff, especially for logistics & fulfillment, allow your workers to use their best judgement in whether they should come in or stay home.
Quarantine or Shut-Down if Necessary
If your employees or their family test positive for COVD-19, allow them to stay at home for at least 2 weeks. If remote work is possible, again allow & encourage it. Many companies we know personally are preparing for a mandatory 2 week period of remote work company-wide after any confirmed cases in their employees, their families, or partner companies whom they come into physical contact with. If this is feasible for your company, it is sound advice to follow.
Cleaning & Decontamination
When it comes to warehouses & inventory, follow precautions. Our friends in China have been shut down for weeks and while some factories are getting back to work, be prepared for inventory delays. While international ports are conducting inspections and following protocols to prevent the shipment of contaminated goods, be prepared to run through your own checks or go through internal procedures to ensure inventory received in or traveling across the United States is safe.
If you do need to shut down due to a confirmed case of COVID-19 at your location, make sure to deep clean offices and warehouses. Also take steps to ensure any product on hand is decontaminated or destroyed. In most cases, after 2 weeks there should not be any traces left of the virus, but make sure to keep up to date on the most recent scientific findings. Unfortunately there is still a lot to be learned & losing a little bit of product or time is much better than perpetuating the spread of this disease.
How Do We Prepare for the Growing Pandemic?
Ironically, the pandemic may boost eCommerce sales. Obviously nobody looks forward to profiting off something so serious, but with hand washing (with soap & water) and self-quarantine being some of our best methods to contain the spread, online ordering is very likely to increase. We’ve already seen stores running low on toiletries, sanitary items, and bottled water. These items are likely to see an online boost, but even other purchases are likely to see an increase due to more people trying to stay home.
Boost Inventory & Optimize Logistics
To prepare for this potential influx, checking your stock and fulfillment methods is advised. Obviously, stock levels may be out of your hands if you are awaiting international shipments. The more you can prepare and automate, the better. Adjust processing times if you think you will run out of stock.
Come up with back-up plans such as 3PL, Amazon FBA, merchant fulfillment, and more to help you fulfill inventory across the country should your warehouse need to shut down. Options away from the coast may be more helpful, if possible. The advantage to using Amazon FBA is that they move your inventory around based on purchase behavior, so your inventory will not be in 1 single location.
Utilizing Multi-Channel Fulfillment may also help you manage off-Amazon sales in the event your warehouses need to shut down. However, even if MCF isn’t a feasible option for you at this time, boosting your Amazon stock still is still a wise move. More and more stores and non-essential business are shutting down, so providing an alternative purchase location for your customers is beneficial.
Review Advertising Campaigns
This is also a time to take a hard look at your ads. It may sound crass, but this is a realistic area for concern. If you have an essential product, you may see a boost in sales & may be able to optimize ads for better performance. On the other hand, you may see elevated ad spend for related search terms that are just costing you money.
It is also worth considering how much inventory you have available & will be able to restock. If you know your numbers are low, pausing advertising to prevent running out of stock is another option to consider. Not only will this help keep your sales more steady during potential shut down & quarantines, but it will also help you maintain rank as out of stock products start to drop in their Amazon ranking.
Amazon has released a FAQ for advertiser’s to help you navigate campaign optimization during the COVID-19 pandemic. Some of this may be review for seasoned sellers, but there is helpful information non keyword restrictions,as Amazon is trying to keep PPE items available for hospitals.
Consider Vacation or Holiday Mode
If you are at a point where you are restricted from FBA & don’t think another fulfillment method is a valid option at this time, you can put your account on Vacation Mode (or Holiday Mode in Europe). This will deactivate your non-FBA listings until you change the setting. This method is much easier & quicker than manually deactivating each listing. By using this setting, you won’t get hit for messages over 24 hrs SLA, and you don’t have to worry about OOS impacting any of your metrics.
You can also take advantage of this time to take care of other non-sales related tasks. Is your Brand Registry up to date? Do you have content optimization that needs to be done? You can still improve your account and keep employees active, even if you are unable to fulfill orders.
What Are Amazon’s Procedures?
Amazon is taking the virus very seriously. In areas of quarantine, no FBA or FBM shipments are being sent or received. They are adhering to government issued quarantines without question. Italy in particular has been impacted very hard by this policy, and we can expect to see similar orders followed if necessary.
Employees & Quarantine
In terms of employees, Amazon is following the same advice we shared above. Office workers who can work from home are encouraged to. Warehouse workers are not being penalized for staying home either. On March 19, Amazon reported it’s first confirmed case in a New Jersey warehouse. The warehouse is being temporarily shut down for cleaning & decontamination, as well as to allow employees the chance to get checked out themselves & self-quarantine if necessary.
This is not likely to impact Amazon’s ability to deliver. To help keep everything up & running, Amazon is in the process of opening up 100,00 full- & part-time warehouse positions in fulfillment centers across the US along with a $2/hour raise for warehouse employees. This will both help keep shipments flowing if employees need to take time off, and help compensate for increased orders as more consumers buy online during self-quarantine.
Amazon has also taken an official stance on price-gouging, which is wonderful. We understand that in a time like this, it is very tempting to increase your price with demand, and even moreso if your supply is likely to deplete. However this is an unethical practice, and in horrible taste during a state of emergency such as this. Price gouging already violates Amazon’s Terms of Service, and Amazon has officially stated accounts caught following this practice will be suspended.
Inventory & Logistics
As of March 17, 2020 Amazon will be temporarily prioritizing products going into fulfillment centers. This means shipment creation has been temporarily disabled unless you fall under household staples, medical supplies, and/or high-demand products. Since this is a rather vague categorization, we have received clarification that most products in the following categories will still be able to ship in inventory:
- Baby Products
- Health & Household
- Beauty & Personal Care
- including personal care appliances
- Industrial & Scientific
- Pet Supplies
These restrictions are being placed on sellers & vendors alike in both the US and EU, so that Amazon can ensure they are able to quickly receive, restock, and deliver these most-needed items to customers. This does not impact shipments already in-transit or created prior to March 17. This also does not impact inventory already at FBA Fulfillment Centers. Amazon is also working to put measures in place to ensure your IPI scores do not fall or are recalculated.
These restrictions are in place through April 5, 2020. As Amazon fills their newly opened warehouse positions, it should help facilitate the influx of inventory & sales for all categories. After April 5, Amazon is going to continue with prioritizing, but is expanding the products that can be shipped in to FBA. You can check your product’s eligibility using the new Restock Inventory Tool or but pulling a Restock Inventory Report.
During this time, order fulfillment may take longer than usual. This is both related to Amazon and carrier overload. Amazon will make sure extended delivery promises are both displaying on the website and communicated to customers.
Removal orders may also be delayed or paused in some areas, in order to help prioritize fulfillment of important orders. TO make sure this does not negatively impact sellers, Amazon has paused Long-Term Storage fees in April for the United States, United Kingdom, Germany, France, Italy, Spain, Poland, and the Czech Republic
Please note: At this point Amazon is not accepting cases if your shipments are not processed. They are determining the products that can be shipped in based on internal algorithms using customer behavior and category. It is also a violation of Amazon policy to change your category to try and work around these restrictions. If you attempt to change your category, your put your account at risk of suspension.
At this time, Amazon is trying to ensure PPE items make there way to the places needing them most, like hospitals and government organizations. This means you may notice a decease in sales, inability to advertise these products or use keywords for PPE in your campaigns for related items. To help out the sellers of PPE products, Amazon is eliminating referral fees through June 30.
You are also still able to sell products already listed through FBM. If you are already enrolled in Seller-Fulfilled Prime, that is another viable option, although new seller enrollment is not available at this time. While vendors may not have access to these features, they can still leverage drop-shipping to make up for the pause in POs.
There are 2 ways for you to activate FBM:
1. Convert Your Existing Listings
This takes a manner of minutes to initiate & does not cause issues with your listings. You can easily keep a listing on FBM while inventory is in-transit once restrictions are lifted.
Pros: Quick & easy to convert. The best chance of letting you sell out of FBA inventory before switching fulfillment methods.
Cons: Timing may be a concern. If you run OOS overnight or on the weekend, your listing may be down for a few hours until discovered. To combat this, we can switch over before completely running out of inventory, but storage fees will still apply. Expiration dated products are at minor risk should restrictions be extended, but still only likely to be a concern for slow movers (in which case, we could leave FBA active until OOS).
2. Duplicate Your Existing Listings
This process takes a bit longer. You essentially have to duplicate your entire catalog & edit all existing variations.
Pros: You can have both offers active simultaneously, so that when FBA runs OOS FBM is already available.
Cons: Potential catalog issues (this can oftentimes create duplicate ASINS, variation problems, content mis-match, or Brand Registry issues). For accounts that have had a history of catalog or variation problems, this can take a while to reconcile and have active offers. You also need to be prepared to fulfill FBM orders immediately, as consumers may choose FBM over FBA normally, and moreso with potential delivery delays.
Normally, we would recommend flipping listings if possible, as it is quick and there are far less complications to deal with. Regardless of which option you choose (or potentially a mix), you need to be prepared for fulfilling these orders before making the switch:
- Make sure you know your handling time & extend that if necessary in Seller Central
- Make sure your warehouse can handle processing these orders
- Make sure any third party tools or APIs are set-up & working properly before transitioning
- Research & update your shipping fees
- Be prepared for this to have a potential impact on sales if you can’t offer free shipping
- Remember that if you aren’t already approved for Seller-Fulfilled Prime, you will not be able to qualify at this time & listings will lose the Prime badge
- If you are already approved for Seller-Fulfilled Prime, make sure you have your Prime shipping calculated
- Use regional Prime if you have to in order to keep costs down
Please note that Amazon is predicting an increased volume of FBM orders while they prioritize essentials under FBA. As such, it is very important you go through this checklist before activating FBM offers.
While Amazon is communicating extended delivery to the customers, they are not changing the handling time within your portal. Amazon is not looking to penalize you for shipping delays or cancelled orders, but you still have a responsibility to be proactive:
If you expect delays, extend your handling time. If you have carrier updates showing a delivery will be late, alert customers as soon as possible.
Amazon is recommending regular contact with your carriers, in addition to closely monitoring your pick up schedule and internal operations.
If your carrier is performing normally, continue to ship per the program requirements. Continue closely monitoring carrier performance in-case this should change.
If your carrier is experiencing delays, make adjustments to your SFP settings: use other carriers that can meet requirements, disable SFP until you are able to meet requirements, or turn on Regional Prime.
Out of Stock
If you are unable to process any customer orders, activate the Vacation or Holiday setting for your account. This will deactivate FBM offers, but FBA offers will remain active until they sell out.
If you should be unable to fulfill a confirmed order, cancel as soon as possible and inform the customer.