COVID-19 and Amazon: A Different World for Sellers

COVID-19 and Amazon
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The man didn’t even make me sign the liability waiver because it would mean touching the same piece of paper as him. There’s a propped up this makeshift, secondary counter space for grabbing sales pamphlets and swiping your credit card—taking the rule of “no less than 6-feet” very seriously. The showroom is nothing but cardboard boxes, moving pads, and trailer hitches. But this virus that broke out on the other side of the world just a few months ago has forever changed the perception of personal space and created terms like “social distancing,” even in my local U-Haul store. It’s even impacting the Internet, where social distancing was pretty much invented! COVID-19 and Amazon is one of the biggest topics circulating lately.

As I type this, I’m waiting to get a trailer hitch installed on my car. And I can’t help but notice all of the little changes in the waiting room—such as the secondary countertop—that have permeated the global landscape. Restaurants and storefronts are dark, with signs taped to the windows that say, “Take Out Only” or just, “Closed.” The phone has stopped ringing in this place; nobody needs a moving truck right now.

So business is changing, we know that. But what does that mean for e-commerce sellers in general? What does it mean for those of us trying to build a business in a time like this?

Well these are the questions I felt the need to address in this article. There is some good news, and some bad news … and if you will allow it, I would like to speak about my personal experiences as testaments to the points I’m trying to make. These aren’t listed in any particular order, just random thoughts. And after each thought, I’ll be sure to include my takeaway.

Thought #1: Amazon is in crisis mode.

If you had inventory in stock at Amazon around the first of March, you probably saw a large increase in sales. I received some solid intel that for most 3rd party sellers, their sales were up an AVERAGE of 50% over the same time last year. As people were being told that they needed to work from home, stop social gathering, and stay home from school, the Internet went nuts.  People were buying online like never before …  Even as people were stripping the shelves in their local stores of bread and toilet paper, so too were the droves of consumers stripping clean all of the inventory online that they could get their hands on. Since then, Amazon has come up with some unprecedented changes and announcements, some of which are listed below:

  • Most categories of products cannot ship into FBA until April 5, but it may be even longer...
  • All Lightning Deals, Daily Deals, Coupons, and Rebates appear to be halted.
  • Amazon lending offers have been revoked, and outstanding loans seem to have been given about a 40-day grace period.
  • Amazon Vendor Central POs look like they've been stopped for the most part.
  • Amazon Merch is not printing shorts in the foreseeable future.
  • Delivery times to consumers of in-stock products are being pushed to promised dates at the end of April for millions of SKUs.
  • Amazon affiliates have been asked to stop pumping traffic to the site.

You may be wondering, “Why is all of this happening?” Well, it’s NOT because Amazon is shutting down. It’s because they can’t keep up! They literally have SO many orders, that they are drowning. They recently announced that they will be hiring 100,000 warehouse workers. 100,000! That’s A LOT of warehouse hands! They wouldn’t be doing that if things were slowing down. No, they’re ramping up HUGE!

On March 13th, I watched President Trump give a live conference, and on the stage with him were the CEOs of Walmart, Target, Walgreens, and CVS. They announced a collaboration between each business and the federal government to provide drive-thru testing sites in their parking lots.

This was a huge and unprecedented action that formed a partnership between the government and private businesses that shared capabilities with each other. At the same time, it was rumored that Jeff Bezos was at the White House.

You can call me a conspiracy theorist, and you might be imagining me sitting in the U-Haul waiting room with a tinfoil hat on, but I suspect that Amazon has also been told they’ll be needed for a large-scale distribution effort. They have, arguably, the best logistics system in the world, so it would make total sense if they were tapped to be ready for something big.

This would lead to another reason that Amazon is throttling-us back in regard to their warehouse capabilities, which is so they have space and manpower freed up for a government-led distribution program through this virus crisis.

Takeaway #1 – What do we do now?

The short answer is to wait. And I know that many of you may be rolling your eyes, cussing me out, and throwing your last bottle of siracha across the room, but hear me out …

I firmly believe that this crisis in the Amazon system is temporary. And if we overreact now, we may do more harm than good. I know some people who can’t send inventory for a couple of weeks and hired full-scale firms to build them websites and sales funnels, trying to ship in all their inventory to 3PL distributors and COMPLETELY change their business models …

So, is now the time to diversify? SURE! But this is NOT the time to upend your entire business. It will cost a fortune and A LOT of time, energy, effort to make a change like that. Just slow down, and let’s see what happens. We should not overreact.

One great option now is to Merchant Fulfill (MF) on Amazon, which may help keep your listing active and cash flow rolling. If all your inventory is in FBA, that’s not an option because Amazon has also stopped removal orders … But if you’re sitting on a garage full of stock, or you have air shipments ready in China, get to your garage, whip out the ole tape gun and hit up an online site like, U-Line (it’s expensive but QUICK!), and get some mailers, small boxes, and turn on that MF machine and start cranking orders!

I know that this isn’t an option for everyone, but I know several sellers that were mostly FBA, and are now shipping THOUSANDS of units a day MF with the help of their kids, spouses, or neighbors. 

Another thing you can do is change your priorities. Can’t ship for a couple weeks, and can’t do new product research since the results are all flipped over now? GREAT! Optimize your current listings! Get in there and do your accounting and find ways to save money or streamline.

Find and interview some virtual assistants for the near future! There are A LOT of things we can be doing that won’t disrupt our business entirely but will keep us moving forward.

This Amazon crisis WILL end.  And when it does, things will get back to a decent semblance of normal and life will go on.  Just Keep Calm and Carry On!

Thought #2: My wife is now an influencer …

… and I DIDN’T see that coming.

When I think of “influencers,” I think of those super models on Instagram promoting luxury brands or the Fyre Festival. But that’s not my wife … she hates bikinis, and she is more likely to be seen wearing fuzzy house shoes, my pajama pants, and a nasty, old t-shirt on the couch with no makeup on and her hair in a ponytail cause she was too lazy to fix it. And that’s exactly how she got ahead of the game …

See, my wife would rather be at home, watching HGTV and playing with the kids then shopping for groceries. This is how she found Shipt! You pay them a monthly service, then their shoppers go out and buy stuff from Walmart, Costco, or your local grocery store and deliver it to your door! It’s cheap, amazing, and was relatively unpopular two years ago when we first heard of it. But my wife has been a diligent believer and practitioner of the concept of ordering online and having someone else bring it to us. It’s like this crazy combination of e-commerce and regular, retail buying.

In the past month, she has posted about it on social media in regard to our recommendations to NOT go to large stores and be exposed to a ton of people. And, let me tell you … people are listening. She makes a simple Facebook post about Shipt, and her responses BLOW UP! People NOW are DYING for a solution to get their toilet paper, Oreos, and 50-pound bags of rice for their fallout shelters! So, why did my wife just sign up more than 200 people on Shipt with her recommendations? It’s not because of her savvy social media presence, but it’s because the world is demanding more e-commerce. Let me say this again … THE WORLD WANTS MORE E-COMMERCE!!!!!

Takeaway #2: The world wants it, and we will deliver it!

This is HUGE! And I could NOT be any more excited. Those sales going through the roof and shutting down Amazon’s inbound shipments, and new signups for Shipt, are all clues that show that MORE people are using e-commerce than EVER before. And they will likely continue to adopt their new love of e-commerce for a long time to come! People have NEVER bought on Amazon are now doing so. People that loved window shopping are now learning how to search keywords. The WORLD is evolving!

Let me also be a “Debbie Downer” for a minute. Last weekend, I wat in a parking lot of a retail center looking at the closed restaurants and the small retail shops that were closed. It was heartbreaking, because I know that tens-of-thousands, and maybe even MILLIONS of small businesses will not survive this crisis—and there are two separate crises, which I will break down further in this article). This is tragic, and I literally weep for these families and business owners whose businesses will not survive. But, let me throw some real talk at you for a minute also … Those stores closing will lead to more people buying online. So, if you want to sell a product, it’s a good thing you have chosen the e-commerce route!

So if it seems like the sky is falling and you’re kept up at night worried about your lack of inventory or some other temporary problem, remember that this is short term, and the world WILL want more e-commerce in the future. This means MASSIVE growth in this sector! My wife didn’t get all those signups for Shipt because she is particularly cool, it’s because the world is changing. And as we adopt to that change, we are put into the driver’s seat as long as we can get through this immediate crisis and not sink the ship!

Thought #3: There are 2 separate issues to be aware of.

As the news is focused on cities being locked down and the hope for a vaccine to this nasty virus, I am also watching the financial news in the background. Airlines have all but stopped, bonds and interest rates are at historic rates, and the stock market is all over the place like a jackrabbit on meth. So, I have started to consider the differences between the news headlines and my brain is starting to separate them. I firmly believe that each should be treated differently in regard to our business and how we act and move forward.

The first crisis is the virus and the effects like lockdowns, shortages of products, Amazon’s logistic issues, and the millions of kids at home driving their parents insane in quarantine mode! This is a real and present issue, and it is causing MASSIVE growth in e-commerce sales for a lot of products, but it is also causing a lot of hiccups in the system. I firmly believe that this crisis will end soon. Whether that is 6 weeks from now or 6 months from now … that is still short in the big, grand scheme of life.

The second crisis is the impact to the economy. I am not smart enough or educated enough to know all the signs and what they mean, but I do know that the stock market dropping, unemployment, and interest rates tanking all point to what can only be described as the inevitable global recession. This could last a few years, but no less than 1-year in my opinion. This is a serious issue and one that you need to consider. Does this mean the world is ending? That we can’t run a business? NO! It means we just need to adjust our plans. So, let me share some of mine.

Takeaway #3: My plan for the 2 separate crises:

The first crisis is the virus and the lockdown of people.  This is shorter ranged, but still serious.  And if we can figure out how to move product, we will move A LOT of it!  I have been selling an educational toy, and when the schools announced closures, my sales of that product went absolutely nuts. Parents needing products to keep their kids occupied were in high demand. As me and the wife spent more time at home, she found more “honey do” items and I found myself on Amazon ordering everything from new fancy bedsheets to cabinet door hardware for the kitchen.  We were at home and wanted to shop.  The world right now is the same.  So, get while the gettin’ is good (as my dear old grandpa used to say) and be BOLD! Stay up all night packing MF orders in your garage. Get your hands on nearly anything you can and sell it.  The e-com demand now is huge, and we as small and nimble businesses have an opportunity to really make an impact, and hopefully make a nice fat profit for our efforts!

 

The second crisis is coming, and it won’t go away as fast. And we, as sellers, need to prepare for it. I know this sounds like a bummer but hear me out. We can’t control this, but we can react to it. And remember that Rockefeller, Vanderbilt, and even Zuckerberg all became titans in repressed economic times. Yes, Facebook boomed in 2008, when the rest of the world was in a recession! They were smart, but they were bold. They were prepared, but they were nimble and ready to make swift changes when needed.

If I were you, I would be thinking about things like product selection for the future. As people have less disposable income, the demand for lower cost giftable items will supersede crazy, lavish gifts. People are less likely to buy a $500 Roomba, and more like.ly to buy a cool, new sweeping device for $40. I would also consider streamlining and cutting costs. Stop selling super-low margin but high-volume items, because the volume may slow down. Find ways to cut costs in your business—like the cost-saving financial tools that PingPong offers! Don’t panic and don’t be disheartened, just get creative and be prepared.

I have no way of saying what the timeframe is for transitioning from action plan #1 to action plan #2, but I am confident that there will be a point in time where we should make that transition. Because I do firmly believe that both of these crises deserve and warrant a separate plan of attack.

Be smart, be informed, be nimble, and be bold.  If we can do those things now, then we are investing in our own future success.

In Conclusion: The World Still Needs Bike Racks

As I wrap up my thoughts, it’s nearing the scheduled time for my trailer hitch to be finished up. Once I leave here, I will head to my local bike shop and look at trailer hitch bike racks (yep, that’s why I want this trailer hitch). I will then likely price shop the same unit online and purchase online if cheaper. Then, I will order a new bike seat (my current one is SUPER uncomfortable) and by this weekend I’ll be heading with the kids to a new bike trail to ride with them.

A trailer hitch for my small SUV isn’t needed. I don’t need a bike rack or a fancy mountain bike. But I want them, and I am buying them. Folks … the world is the same. This period of time sucks. It’s hard. It’s scary, frustrating, and it’s SOOOO exhausting. But I FIRMLY believe that we will all get through it. Just like my trailer hitch, people will keep buying stuff.

At some point, these jokers at U-Haul will get back to normal with a regular sales counter, they will get more moving trucks rented, and the world will go on.  

Try to take this time to relax, enjoy life, and realize that ALL crises will come to an end, just as this one will. And be prepared for every opportunity. Because, as other people are slowing down, we can speed up. This is the time to dig in your heels and stop waiting for other people to give you permission to succeed. Make bold moves in this volatile time. Step up, step out, and remember that the sky is NOT falling down on you. Maybe I’m an optimist. My personal business is struggling right now, too! But when I look past the clouds and take stock of the MASSIVE OPPORTUNITIES in e-commerce right now, I can’t help but smile.

It is STILL the best time in the history of the world to be an entrepreneur.

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