After last week's exponential surge, the cumulative number of confirmed cases in the United States has now reached 360,000, and the death toll has exceeded 10,000. The number of newly confirmed cases in a single day has exceeded 30,000. Although the increase has slowed down compared with the previous week, the epidemic in the United States is actually far from reaching a turning point. Prime Day delayed until at least August According to foreign media reports, due to the new coronavirus pandemic, Amazon's plan in 2020 is to postpone Amazon Prime Day from the normal July to at least August.
It is reported that the company expects to lose $100 million in revenue due to the postponement of the event, and even $300 million in the worst case scenario. The main reason is that many seasonal products have too much inventory and need to be sold at a large discount after the peak season. Prime Day postponed, Amazon sells goods at low prices Whenever Amazon has a big shopping event, it sells its devices at deep discounts to make up for the losses. The Echo Dot and Fire TV Stick are typically the best-selling items across the entire Amazon marketplace, and customers can often get them on Prime Day for around half of their normal retail price.
Amazon is willing to offer deep discounts on these devices, and more Amazon device users means more Amazon service users. In addition, device sales do a great job of attracting customers to Amazon.com and getting them to buy merchandise. On Prime Day, when both Amazon and third-party sellers are offering deep discounts, this leads to a lot of additional purchases. The challenge Amazon faces right now is that promoting its own devices won't result in additional sales because supply is constrained. Amazon has no room in its warehouses for nonessential items, it has told third-party sellers to stop sending high-margin products, and in some cases suppliers are constrained from making enough merchandise to fill Amazon’s virtual shelves. Amazon can’t delay the device promotion, which would cost it more money to store the merchandise and give up warehouse capacity for higher-margin items. Amazon would rather take the $100 million hit and make up for it with extra sales. Prime Day is confirmed to be delayed. Is this a good or bad thing for sellers? The postponement of Prime Day will also affect third-party sellers. According to Amazon, during Prime Day in 2019, third-party sellers contributed at least $2 billion in sales to Amazon sites in 18 countries. During the outbreak and subsequent prevention and control period, people have experienced a long time, but have no idea how the epidemic will develop, when it will subside, or how consumer sentiment will change. It is difficult for sellers to assess whether consumers are fully prepared for Prime Day. Despite this, people are very dependent on e-commerce for daily necessities. According to Adobe data, e-commerce in the United States has grown by 25%. Among them, sales of fitness products have increased by 55%. Toilet paper sales have increased by 231%. Sales of laptops and other computers have increased by 40%. BOPIS (buy online and pick up in store) orders have increased by 62%. The foreign media news came from an internal Amazon letter exposed by an employee, which also stated that the turning point of the epidemic has not yet appeared, the suspension of restocking of non-essential goods and the surge in sales of essential goods have made it difficult for Primeday to operate normally, and the losses from postponing Primeday have amounted to hundreds of millions of US dollars. The email also stated that Prime Day would be postponed until at least August, and might be further postponed if the epidemic is more serious than expected. This promotional festival specifically for Amazon Prime members has been going on for several years. It is held every year during the prime time in mid-July, and this year will be the first time that Primeday has been postponed. Amazon's postponement means that it is not optimistic about the current epidemic situation in the U.S. Many sellers are worried that the postponement of Prime Day will also lead to further delays in FBA replenishment and recovery. Amazon announced in mid-March that it would hire an additional 100,000 workers in the United States and temporarily increase wages for existing employees by another $2 per hour. Because Amazon needs thousands of part-time and full-time delivery and fulfillment center employees, Amazon also said that it would temporarily suspend the receipt of non-essential goods in warehouses in order to reduce the burden and protect workers. Currently, Amazon has reached 80% of its recruitment goals nationwide. The reason for the postponement is that Amazon speculates that there will still be a large demand for epidemic prevention products until July, which will seriously affect the sales of non-essential goods. It is not suitable to hold a full-category promotion festival such as Primeday at this time.
Therefore, the postponement of Prime Day does not mean that the labor situation in FBA warehouses has become more severe, but it is more of a consideration on the demand side. You don’t have to worry about FBA restocking for the time being. In fact, many sellers have reported that there are more SKUs that can be restocked in the past two days, which also shows that Amazon is gradually relaxing the restocking threshold for third-party sellers.
Postponement is not a bad thing. It is not impossible to create another Primeday sales record by avoiding the period of low demand during the epidemic and seizing the opportunity when the epidemic situation improves and people start revenge shopping. This will depend on further news from Amazon. The news of the postponement of Primeday will definitely be announced to everyone later. For now, it will not affect our sellers. During this period, everyone should pay more attention to the issue of replenishment. Now those who have inventory in FBA can have a small boom.
Source: SellerGrowth |
