Amazon Seller: Surviving the Corona Virus

As a result of the corona virus break out in December 2019, most Chinese businesses have been closed or on extended leave since the Chinese new year. Although we have started seeing some suppliers operating in late February, some are not planning to go back to work until 9 of march or possibly later.

Although most experienced Amazon sellers would have stocked up on their amazon stock before the Chinese new year. With the expectation of factories being closed for the Chinese Public Holiday period, and delays after. However, due to the extended leave enforced by the outbreak of the corona virus, everyone is starting to get concerned about running out of stock.

Why?

Even if your business has enough stock for the next 2 months, you are still likely to feel the knock on effect.

As sellers are entering a panic stage, they are likely to order more stock than needed (good for suppliers and factories). This unexpected increase will take impact on:

1: Suppliers and Factories

There are likely to be more delays from factories as they will all be working hard to fulfil more orders than they are capable.

2: Logistics

Increase in orders will introduce delays in logistics, and as there are already plenty of shipments from factories that were produced and not shipped in January, we are likely to see more delays from shipping companies.

3: Customs: Import & Export

There is also likely to be a bottle neck at customs, where customs agents will be faced with more shipments than they are capable of processing

4: Amazon Warehouse

Finally even when the goods arrive at the amazon warehouse, we are going to experience more delays where goods are going to be queued for months for processing before they will get checked in.

When Launching a product on amazon platform, we spend hours/days/weeks sometimes longer just to get our product ranked higher to get more sales. Running out of stock can have a devastating impact on our amazon business.

Firstly because we will not be making sales, but this isn’t really the main concern. The main concern is that if we run out of stock, our best seller ranking will drop.

Let say for example, we have a product on page #1 in first spot, best seller rank #1. If we run out of stock, the product will no longer be available to the buyer, or the product may show as available but with a late delivery date. This is bad because the customers will still be clicking on the product, but not buying because it will not be available for fast delivery. This will impact the products conversion rate, and reduce the products best seller rank. As a result, it will impact the products position in the search results. So as you can see, we are starting to go down whats called a “slipper slope: a course of action that seems to lead inevitably from one action or result to another with unintended consequences.”

As a local seller, I can get my supplier to ship a small amount of goods directly to my address and dispatch by myself. However, this is not practical in most cases. Amazon is a global business, and as sellers on the platform we often sell globally.

Although there is no magic formula for teleporting stock to amazon warehouse, we can take some steps to reduce the impact of running out of stock and give our selves the best chances of recovery.

1. Do not let your inventory run out of stock completely

a. Increase price to reduce the number of units sold daily. This way you can get your stock to last longer and make more profit. If you go with this option, you will have to monitor your product on daily basis to make sure that the price increase does not impact your BSR ranking and search position.

b. Close the listing before stock hits 0. If you run out of stock, amazon will close your listing within 24 hours or so. But it will have 2 negative effects: - 1 amazon will mark you down for running out of stock. -2 if your product is visible in search result as available with late deliver date, your click/buy conversion will suffer, BSR rank will drop, search position will drop.

2. Ship stock to FBA by Air if you can

If you can ship all or small portion of your goods to FBA by air. This will get to amazon faster, and your item will be back in stock quicker.

3. Do not ship everything in 1 shipment to FBA

Since amazon FBA warehouses can work in mysterious ways, I would advise against shipping all your goods in 1 shipment. Break them up in multiple smaller shipments. That way if 1 gets delayed, others may get there quicker. This can also help with delays in customs etc..

4. For Small items, use both FBA and SNL

If your items are eligible for amazon Small and Light (SNL), ship to both FBA and SNL. Ship bigger quantity to the preferred fulfilment centre, and a small quantity to the other. That way, you will have a better chance, in case there is more delay in 1 warehouse than the other.

5. Use PPC for 1-2 weeks after restock

Once your stock is back in amazon, make sure your listing is active (in case you closed it). If the seller rank and search position has suffered, use Amazon PPC advertisement for the search term you want to recover.

For example if you were on first page for “Yoga Mat” search term before, and now you slipped to page 3. Use Amazon PPC on search term “yoga mat” for 1-2 weeks to help your listing get back to the top.

6. Sales and Promotions

You can also reduce price through promotions to boost your sales and get your product back to its previous BSR Rank and Search Position.

I hope that you find this information useful.