Amazon has informed 3P sellers that it will cease receiving seller inventory to its FBA program in the US and Europe outside of key medical or household essentials categories, as demand pressure on the retailer increases in the wake of the coronavirus outbreak. In addition, it appears that similar initiatives are being taken on the first-party vendor side of the business, with many vendors not receiving purchase orders.
Between medical and hygiene-related items for virus prevention, and household essentials for individuals stocking up for long periods of time at home, retailers are now seeing above average sales volumes. To keep up with volumes, Amazon has already announced 100,000 new job openings in its warehouse and delivery operations, while it is receiving demands from workers to clean and disinfect its warehouses.
Suppliers should focus on working with Amazon to determine which parts of their product portfolio are in critical categories, and support the added volume there while pulling back with other SKUs. Staying in stock will be the top challenge through this time, and better informed vendors with more dynamic supply chains and manufacturing capabilities will be best equipped to serve the evolving sales volume demands.
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