Amazon FBA in the Time of COVID-19: An Essential Overview
The success of Amazon is crucial for the global economy
We all want to see major economic players like Amazon succeed during these hard and trying times. This is true no matter where you stand in matters of capitalism, online e-commerce, and Bezos.
Already a go-to for home and living essentials prior to the pandemic, its buyer base is seen to grow exponentially. More so as we continue to deal with COVID-19 and head into the new normal. In the US alone, there are at least 95 million Amazon Prime members.
In the context of this article, Amazon is a considerable source of income for thousands of online sellers and partners. As of 2018, the number of third-party sellers on the platform has been responsible for more than 50% of total Amazon sales.
This means any issues in its operations come with a significant economic impact not only to buyers but also to sellers and their families.
Let’s dive into the essentials of where the tech behemoth stands now. And then go deeper into what current and would-be Amazon FBA sellers might expect in months and years ahead.
What are the top-selling products/categories in Amazon during this pandemic?
Amazon is getting a big share of the pie in increased consumer spending during COVID-19. According to a Digital Commerce 360 survey, 42% of seller respondents would categorize their bump in sales in Amazon as “some growth” while 22% say they have experienced “significant growth” so far.
Here’s a general list of what’s selling/trending these days in Amazon as a direct or indirect impact of the global health problem.
- Protective face masks, personal protective equipment, protective eyewear
- Best selling appliances include, among others, chest freezers and washing machines
- An increase in home activities has also caused a rise in demand for arts and crafts products and toys
- Home and living products such as groceries, and baby diapers, and wipes, among others
- A lot of home baking going on has caused higher sales in Yeast
How has Amazon as a company responded to COVID-19?
As one would expect from a large, well-organized corporation such as Amazon, we’re seeing a calculated yet thorough response to the crisis from the e-commerce giant.
The company has framed its COVID-19 reaction to influence and help its employees, its customers, as well as the communities that are affected by their global operations.
❖ Amazon has invested at least $14 billion in health and safety initiatives thus far. While active frontline employees and partners have received bonuses totaling around $500 million.
❖ While free masks are provided in physical stores, buyers are given additional time for returns wherever appropriate.
❖ Jeff Bezos himself donated $100 million to Feeding America while the company provides much-needed cash to other initiatives such as COVID-19 research.
Albeit not without backlash from the media and special interest groups, there’s no doubt Amazon is contributing actively rather than passively to this crisis.
How has this global pandemic affected Amazon sellers?
Fear and uncertainty.
As mentioned above, a majority of sellers have seen growth in sales over this period from the time global lockdowns started. However, uncertainties still dominate the current Amazon selling climate.
While largely temporary, the biggest impact on Amazon FBA sellers has been restrictions on what could be stored at the warehouses.
This has eased these days but during the early days of the pandemic, Amazon only allowed inventory storage for the following: health and household items, baby products and pet supplies, groceries. This was also the case for beauty and personal care items, and some industrial and scientific supplies.
Recent developments have the company instituting quantity restrictions, this time for third-party sellers who use the US warehouses. Citing COVID-19 along with upcoming holidays, this is seen to affect sellers through the end of 2020 and perhaps even during the 1st quarter of 2021.
Amazon selling in the new normal – moving forward together
Is there a reason for sellers to be hopeful and positive amid the growing crazy happening around us? Certainly.
While the current struggles are all too real, the looming recovery will be huge.
Use this time to learn and prepare.
Whether a 5-year veteran in Amazon FBA or you just got started prior to the pandemic, this is a time to push through. Consume as much content as you can to learn and test a little here and there.
If you’re looking to get started, sure, why not? It takes time to really learn the ropes in Amazon and you’ll want to acquire as much knowledge as possible to multiply opportunities later on.
Demand will continue to increase. Prepare to pounce!
Continuing from above: Fail now, fail early. Fail during the toughest time in Amazon selling history. Get rookie mistakes out of the way. By the time this is all over, demand will have increased manifold.
While essentials are the most popular items these days, what were traditionally high-selling would be seeing a return no doubt. So be on the lookout, too, for opportunities here.
We’re not out of the woods but the worst is probably over.
Lots of sellers with partners in China got the brunt of this whole e-commerce downtrend. But the worst is most likely over with that part of the supply chain slowly but surely going back to previous stability.
What’s more, suppliers are looking to get back into the thick of things after having had canceled contracts these last two quarters. It certainly spells the right set of circumstances to start researching products and looking to start and build relationships ahead of better times.
What are your thoughts on the future of Amazon FBA operations? Are you as optimistic as us?
Other articles from the eGrow E-Commerce Blog:
⇒⇒⇒ AMZ Seller Conferences During the COVID-19 Times 2020-2021
⇒⇒⇒ How To Build A Social Audience For Your Amazon Channel In 2020?
⇒⇒⇒ How to Discover a Profitable Product to Sell on Amazon in 2020!