It's time for my annual post!
As in most sectors, selling on Amazon with Coronavirus around has been different and has presented its problems and challenges. Thankfully, as opposed to many sectors, there has also been a push for more online shopping so while the challenges are there, opportunity abounds for those who are able to take advantage.
In my business I have seen both the challenges and the opportunities. I want to walk you through them and how I've tried to deal with them and hopefully that is helpful for you.
Problems:
1) In March, Amazon started falling behind on FBA orders. Prime shipments for non essential items were delayed a month or more and amazon started severely limiting how much of any particular non essential item you could send in.
2) There were lots of suspensions for price gouging on essential items as they came under short supply. There wasn't a lot of logic to what caused a price gouging warning or suspension but it caused a lot of fear among sellers.
Solutions:
1) More FBM - This is not a solution that I was able to implement in my business (for reasons I'll explain) but if you switched to fulfilling items from your warehouse you could take advantage of the lack of supply of prime and you could even deliver the items significantly faster than prime. Many times, Amazon gave the buybox to a more expensive FBM over FBA because FBA delivery was so slow.
2) This was the time I was able to get rid of a ton of excess inventory at Amazon. Items that been a problem with way too much inventory, all of a sudden, I didn't have enough. The speed of sales of some specific items switched extremely fast and you knew that other sellers couldn't send in very much to meet the demand.
3) Switch to essential items. I've had to pivot my business many times over the years so this is pretty natural to me. Instead of the usual items that I sell, I started switching to other items temporarily like food, feminine hygiene products, etc. Inventory of these items were not limited and if you could somehow find them prices were excellent and you couldn't buy enough to meet the demand.
On the other hand, once things got back to normal, a lot of these items got overbought by everyone and now the prices have unsurprisingly plummeted.
4) Avoid Personal Protective Equipment (PPE) during a crisis. I had many, many opportunities to buy various types of masks and gowns and gloves in the height of the crisis. I've been around long enough in the selling community to know I didn't want to get anywhere near them.
I would recommend avoiding them always unless your supplier is 100% legit. The last thing you want is for someone to buy a faulty mask from you and you are responsible for that person's health. Besides that, during a crisis Amazon has, is and will continue to crack down on items needed for that crisis (think water during a hurricane). It's just not worth it. Yes, you can make thousands or tens of thousands of dollars, but you can lose your business and have the attorney generals's office going after you..
Problems
1) During the crisis, many local business voluntary shutdown or were forced to shutdown. This meant that your warehouse may no longer be available to you. That could completely shut you down. This happened to my local warehouse until they got an exemption because they were considered an "essential business."
2) People got sick. In one of the warehouses that I used, quite a few employees got sick, some even had to go to the hospital and this was during the thick of the pandemic in NY/NJ. It was a really scare time. The warehouse, which normally had 1.5 employees per day working on just my stuff, now had 1 person 1x a week sometimes and sometimes no one was available at all. I complete understood but it doesn't change the fact that it basically shut me down for a while, at least from them. This is essentially the reason I could not pivot to FBM, see above.
3) Need for Social distancing. Even after people returned to work and were healthy again, the employees needed to socially distance. You couldn't have as many people working at the same time so again I went from 1.5 employees per day to 1 employee 2x a week. This lasted for a couple of months and they are still limited in how many people work with my stuff and it is thankfully unrelated to anyone actively being sick.
Solutions
1) Be understanding with your warehouse, it is a pandemic after all, but be flexible and get access to more warehouses. I don't use just one warehouse. I have 2 that I often use and 1 that I rarely use. I was able to pivot from 90% at my main warehouse to almost 100% at my secondary warehouse for a while. This allowed my business to continue functioning. We are now back to about 60% primary and 40% secondary.
2) Pay your employees better. During Covid, the same job took a lot longer and couldn't be shared among employees. In addition, prices on Amazon went higher on my products. I temporarily increased the commission I paid to my buyers (who certainly needed the money) to reflect how much longer to took to do literally the same thing. This was especially important for those who lost significant income from their regular jobs.
The challenges of Covid have been real and numerous but if you are able to be flexible in your product choice and your warehouse choice, the demand for online shopping can more than make up for the challenges. These can be some of the most profitable months you will see for a while so take advantage if you can.
What challenges did your business go through? How did you overcome them? I would love to hear from you in the comments
As in most sectors, selling on Amazon with Coronavirus around has been different and has presented its problems and challenges. Thankfully, as opposed to many sectors, there has also been a push for more online shopping so while the challenges are there, opportunity abounds for those who are able to take advantage.
In my business I have seen both the challenges and the opportunities. I want to walk you through them and how I've tried to deal with them and hopefully that is helpful for you.
FBA Inventory Limits
1) In March, Amazon started falling behind on FBA orders. Prime shipments for non essential items were delayed a month or more and amazon started severely limiting how much of any particular non essential item you could send in.
2) There were lots of suspensions for price gouging on essential items as they came under short supply. There wasn't a lot of logic to what caused a price gouging warning or suspension but it caused a lot of fear among sellers.
Solutions:
1) More FBM - This is not a solution that I was able to implement in my business (for reasons I'll explain) but if you switched to fulfilling items from your warehouse you could take advantage of the lack of supply of prime and you could even deliver the items significantly faster than prime. Many times, Amazon gave the buybox to a more expensive FBM over FBA because FBA delivery was so slow.
2) This was the time I was able to get rid of a ton of excess inventory at Amazon. Items that been a problem with way too much inventory, all of a sudden, I didn't have enough. The speed of sales of some specific items switched extremely fast and you knew that other sellers couldn't send in very much to meet the demand.
3) Switch to essential items. I've had to pivot my business many times over the years so this is pretty natural to me. Instead of the usual items that I sell, I started switching to other items temporarily like food, feminine hygiene products, etc. Inventory of these items were not limited and if you could somehow find them prices were excellent and you couldn't buy enough to meet the demand.
On the other hand, once things got back to normal, a lot of these items got overbought by everyone and now the prices have unsurprisingly plummeted.
4) Avoid Personal Protective Equipment (PPE) during a crisis. I had many, many opportunities to buy various types of masks and gowns and gloves in the height of the crisis. I've been around long enough in the selling community to know I didn't want to get anywhere near them.
I would recommend avoiding them always unless your supplier is 100% legit. The last thing you want is for someone to buy a faulty mask from you and you are responsible for that person's health. Besides that, during a crisis Amazon has, is and will continue to crack down on items needed for that crisis (think water during a hurricane). It's just not worth it. Yes, you can make thousands or tens of thousands of dollars, but you can lose your business and have the attorney generals's office going after you..
Local Business and Warehouse Shutdowns
1) During the crisis, many local business voluntary shutdown or were forced to shutdown. This meant that your warehouse may no longer be available to you. That could completely shut you down. This happened to my local warehouse until they got an exemption because they were considered an "essential business."
2) People got sick. In one of the warehouses that I used, quite a few employees got sick, some even had to go to the hospital and this was during the thick of the pandemic in NY/NJ. It was a really scare time. The warehouse, which normally had 1.5 employees per day working on just my stuff, now had 1 person 1x a week sometimes and sometimes no one was available at all. I complete understood but it doesn't change the fact that it basically shut me down for a while, at least from them. This is essentially the reason I could not pivot to FBM, see above.
3) Need for Social distancing. Even after people returned to work and were healthy again, the employees needed to socially distance. You couldn't have as many people working at the same time so again I went from 1.5 employees per day to 1 employee 2x a week. This lasted for a couple of months and they are still limited in how many people work with my stuff and it is thankfully unrelated to anyone actively being sick.
Solutions
1) Be understanding with your warehouse, it is a pandemic after all, but be flexible and get access to more warehouses. I don't use just one warehouse. I have 2 that I often use and 1 that I rarely use. I was able to pivot from 90% at my main warehouse to almost 100% at my secondary warehouse for a while. This allowed my business to continue functioning. We are now back to about 60% primary and 40% secondary.
2) Pay your employees better. During Covid, the same job took a lot longer and couldn't be shared among employees. In addition, prices on Amazon went higher on my products. I temporarily increased the commission I paid to my buyers (who certainly needed the money) to reflect how much longer to took to do literally the same thing. This was especially important for those who lost significant income from their regular jobs.
Conclusion
What challenges did your business go through? How did you overcome them? I would love to hear from you in the comments
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