Amazon is a strange place to be right now. We’re currently living through the biggest event in eCommerce history – perhaps even in history itself. When even Jeff Bezos is struggling to adapt, you know it’s bad [1].

The tidal wave of changes brought about by COVID-19 has seen shipping restricted for all but the following “essential” items:

  • Groceries
  • Health & Household
  • Baby Products
  • Beauty & Personal Care
  • Industrial & Scientific Products
  • Pet Supplies
  • Books

None of this is good news, but the sellers who’ve been hit particularly hard are those who’ve seen an uptick in demand yet have been unable to restock due to the restrictions. The options sellers have been left with are necessarily drastic.

Do you raise prices to slow the outflow of your limited inventory, and risk being accused of price-gouging [2]? Use third party listings? Close listings altogether?

This dilemma has been widespread in niches like video games, puzzles, home-schooling supplies and kitchen appliances – niches that aren’t strictly “essential,” yet which have boomed in popularity as consumers have adjusted to living under lockdown.

These are unprecedented changes, and they’ve left many a seller wondering.

What next?

There’s no getting around the fact that this is a period that’s going to be challenging. You only have to look to Amazon France, which has shut down FBA fulfilment altogether, for a premonition of how bad things could get [3].

With that said, it’s often the case that challenge presents an opportunity. Napoleon Hill famously opined that “every adversity brings with it the seed of an equivalent advantage.”

So, what’s the secret to making sure that your brand comes out of this crisis not just unscathed, but enriched?

Are your products restricted?

First and foremost, don’t panic until you’ve established that Amazon have restricted shipping for your products. The easiest way to find out is to check the Restock Inventory page, which can be found within Seller Central [4]. Amazon are slowly easing restrictions, so it pays to check this regularly if you haven’t gotten the green light yet.

With reports that they’ve been reinstating Prime badges and removing the “We’re prioritising products that customers need most…” banner from detail pages, there are signs that the light at the end of the tunnel might be coming into view.

Essentials: The new normal

If you haven’t been able to resume shipping, then it might be time to take a step back and refine your longer-term strategy.

COVID-19 is going to change the game indefinitely, so now is the time to be thinking ahead of the curve. What’s the landscape going to look like in a few months? A few years? Estimates on how long the lockdown is going to last range from June to October. By all accounts though, a second wave of infections is something we all need to be prepared for.

One emerging theme in eCommerce is the shift away from “shiny objects” and more towards functional everyday necessities. This is borne out in the renewed popularity of niches like gardening [5], home cooking and DIY. Driving this trend are two common factors: fear, and the need to keep busy. Consumers’ newfound interest in functionality at the expense of luxury is likely to continue for as long as this sentiment prevails.

Challenge presents opportunity

That being said, remember that you’re in business for the long run, not just for the next few months. The fact that no-one’s buying party equipment and luxury shoes shouldn’t blind you to the fact that the nice-to-haves will be back in vogue once the crisis is over. With that in mind, the best approach may well be to bide your time and diversify your product offering.

There’s a golden opportunity here. You probably have niches you’ve always wanted to expand into but that are traditionally too competitive. Now that sales have taken a nosedive, there’s likely to be a new generation of winners within these categories when the dust settles: those who use the crisis to lay the groundwork for when they are popular again.

So, diversify while the opportunity’s there. If you come out of the coming months with 30 more SKUs to your name, in niches you never previously had the opportunity to consider, you just might look back on this period as the best thing that ever happened to your business.

David vs Goliath

Much has been made of the impact that COVID-19 has had on small businesses, with fears that many of them may not recover at all [6]. This isn’t unfounded. The economic impact of the virus has been as far-reaching as it has been devastating, with high streets reduced to graveyards and many previously successful sellers all but squeezed out of the game.

But the changing landscape presents another opportunity for entrepreneurs willing to pivot and adapt. While it can seem like the deck’s stacked against smaller companies, the multi-billion-dollar heavyweights of the eCommerce world are subject to a well-established law of nature: the bigger it grows, the slower it moves. Sellers can leverage this to pivot and adapt to changing market conditions – an ability that large companies don’t have.

Corporate megaliths with hundreds of thousands of staff on their payroll are just too unwieldy to be able to change their product selection and logistics overnight.

Sometimes Goliaths are too slow to move. In the Darwinian arena of Amazon, where survival of the fittest reigns supreme, the ability to adapt quickly can put you at a great advantage.

Diversify your platforms, not just your products

The conventional wisdom is not to put all of your eggs in one basket. It sounds like trite advice, but seldom have the risks of being confined to a single platform been highlighted so pointedly.

The benefits of being a multi-platform business extend beyond risk management. Having your own website doesn’t just guardrail you against economic downturns – it also gives you boatloads more data to work with. In an industry that was built on data, being able to accurately pinpoint who your customers are is no small thing. Richer analytics open the door for you to more effectively leverage Facebook, Google and other off-platform PPC ads. Furthermore, it represents a step towards attaining the Holy Grail of business – building a brand people love.

Get customers engaging with you on your own website and they’re building a relationship with you, not just transacting with you.

We live in an era in which everyone can copy everyone. Shopify, eBay [7] and even Google Shopping [8] (which, notably, is now free to use) are all good places to start. Ultimately, look for the marketplaces that have made it easy for sellers during this difficult time. These platforms are likely to be rewarded in the long run.

If you want to succeed by building something that no-one else has the technical ability to replicate, you’re 30 years too late. A popular brand is the last bastion of company uniqueness, and the only asset your business can have that someone in Taiwan can’t recreate more cheaply.

Spring-clean your Pay Per Click

People are using the extra free time in a slew of creative ways, and some not-so-creative ways. One of the great clichés of the COVID-19 era, “fixing up the house” is sure to get a few eye-rolls.

Why not use this as an opportunity to do some Amazon-related spring cleaning instead? Those PPC campaigns you never seem to get around to optimising? Here’s your chance.

It’s almost certain that some of your products will have been affected by the situation. Make the most of it by doubling down on those campaigns that are profitable and culling those that aren’t. If there’s demand for the product then focus on lowering ACoS. While everyone else is pruning their gardens, prune those keywords and campaigns that aren’t performing so well.

And while we’re on the subject of pruning, why not use this time to re-optimise the detail pages of those slower selling products that have been on the back burner for a while? Using a market feedback tool like PickFu [9] is a great way to split-test what shoppers really love, rather than using the ‘spray and pray’ approach employed by the majority of sellers.

What not to do

Sellers sourcing from China are understandably concerned. The common knee-jerk reaction has been to look to other countries and change supplier, but you’re best off saving yourself the upheaval.

The pandemic has spread all over the globe. At this stage in the game, China is largely back to doing business as usual. It doesn’t make sense to tarnish supplier relationships that have worked for you so far.

Ignore the doomsayers. China was the world’s manufacturing powerhouse before the crisis, and that doesn’t look set to change any time soon.

Damage limitation

We’ve established that the sellers who emerge from this crisis strongest will be those who adapt, take a long-term view, keep a level head, and use the time to double down on work.

But if you’re still stuck in the no man’s land of restricted shipping, what can you do in the immediate term?

Hijack your listing

One easy win is to ‘hijack your listing’ by creating two different variants: one FBA, and one FBM.

The upshot of this is that if Amazon brings in future restrictions (or you ever run out of stock), you can fulfil orders directly from your own warehouse or 3PL. While you should bear in mind that you’ll likely need to charge for FBM shipping, it’s also more likely that you’ll pick up the Buy Box [10].

A side-note here:

To avoid mistakes, simply create a new SKU from an existing ASIN, sometimes referred to as an MSKU (short for Merchant-Fulfilled SKU). The end result should then be 1 ASIN with 2 SKUs that you can deploy whenever needed.

The key takeaway is you want to leverage your existing reviews and avoid having to manually switch between FBA and FBM (or create a new listing altogether).

To 3PL or not to 3PL?

The question of whether to ship to a third-party logistics provider (3PL) or hold out for Amazon to relax shipping restrictions is oft-debated. It’s important to think laterally about your options here.

Perhaps you’re sourcing from China and don’t need your stock in the short-term. If so, can you cut costs by asking your supplier to keep hold of it? Alternatively, can your freight forwarder offer free storage in their bonded warehouses at port?

Following a similar line of reasoning, another option to keep your listings active is to sell on a merchant-fulfilled basis from China. This one will divide opinions, but provided that you take account of the longer transit and shipping times, it’s one way to escape the purgatory of deactivated listings.

Lastly, be mindful that if you decide to ship to a 3PL, they’re only as secure as the economy. There’s no guarantee that a week from now, the government won’t announce another wave of restrictions which render them non-operational.

Seller-Fulfilled Prime to the rescue?

We’re entering the realm of speculation here, but there’ve been suggestions amongst the seller community that Amazon should relax SFP requirements (currently closed to new registrants). Pristine seller metrics remain a barrier to entry to the program. Notably, Amazon mandate a 99% On-Time Shipment Rate [11].

The argument is this: due to the disruption, Amazon Prime isn’t currently hitting this target themselves.

That being the case, why not ease the burden on fulfilment centres by making SFP more accessible? The move would enable thousands of paralysed sellers to get back into the game without exacerbating the FBA bottleneck. We live in hope.

So why the reluctance? We can merely speculate, but there are a couple of plausible explanations. It’s possible that Amazon’s overburdened logistics team simply don’t have the capacity right now. With reported delays of up to a month on Prime products [12], perhaps they don’t want to overstretch themselves by taking on more SFP sellers, which would mean having to provide logistical assistance to them.

Secondly – and just as plausibly – perhaps they’re wary of long-term damage to Prime’s immaculate reputation. Delays of this length (indeed, delays of any length) are unprecedented in the eCommerce giant’s history. By associating the hallowed Prime label with more products that they know can’t deliver, they’d be eating a reputational cost that they may have judged would overshadow any logistical benefits.

The view from here

So, what is Amazon – and eCommerce in general – going to look like in a post-COVID-19 world?

Again, there’s a silver lining here.

The global closure of high street stores has forced many consumers to make the move to shopping online. Crucially, this includes those who wouldn’t have made the switch by choice. Notable among these are our older third generation, who have traditionally relied on shopping local.

It’s likely that this culture of online shopping will endure far beyond the circumstances that necessitated it. Ultimately, what this means for you as a seller is more potential customers. Many more. How many of those potential customers become paying customers is up to you.

Whatever your approach to dealing with the crisis, you won’t go far wrong by remembering this:

Limits on shipping shouldn’t limit your prospects as a business, and every challenge sows the seeds of opportunity.

 

[1] https://blog.aboutamazon.co.uk/company-news/2019-letter-to-shareholders
[2] https://www.forbes.com/sites/reneemorad/2020/04/20/5-ways-to-avoid-coronavirus-related-price-gouging/#25c669394922
[3] https://www.theguardian.com/technology/2020/apr/15/amazon-to-close-french-warehouses-over-coronavirus-concerns
[4] https://sellercentral.amazon.co.uk/restockinventory/recommendations
[5] https://www.amazon.co.uk/gp/movers-and-shakers/outdoors/ref=zg_bsms_nav_0
[6] https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business
[7] https://sellercentre.ebay.co.uk/business/COVID-19
[8] https://www.blog.google/products/shopping/its-now-free-to-sell-on
[9] https://www.pickfu.com/
[10] https://deliverr.com/blog/covid-19-amazon-buy-box-algorithm/
[11] https://services.amazon.co.uk/services/seller-fulfilled-prime/how-it-works.html
[12] https://www.ft.com/content/970597f4-7882-4a72-8560-55fd4a7778ce
Co-author: Armine Ansari
Armine is an eCommerce Payments Specialist at WorldFirst. He started selling online five years ago and is on a mission to optimise eCommerce payments processes for fellow merchants across global marketplaces.
Co-author: Arabella Redford
Arabella is founder and CEO of Brand Dot. With a cutting-edge approach to content optimisation and conversion-driven marketing, she is passionate about driving brand success through voice assistants and voice-first consumer experiences.