Amazon FBA Suspension: Managing Stock & Fulfilment Services
Due to Amazon’s decision in March to temporarily suspend accepting and shipping non-essential goods to its warehouses, many sellers are now running out of stock of items stored in FBA. Data reveals that less than 80% of the top Amazon sellers offer Prime shipping on more than half of their product range, a reduction compared to 87% a few months ago.
The change in figures is more significant than it may appear, as the top 10,000 sellers on the website contribute annual sales exceeding $1 million. Additionally, across all sellers in the US, the share has also decreased from 55% to 50%.
From FBA to FBM Fulfilment
Before the COVID-19 pandemic, FBA was steadily growing with more sellers offering Prime delivery each year. In 2016, only 56% of Amazon sellers were able to offer Prime delivery, whereas the figures in February before the lockdown were at an all-time high of 87%.
Amazon’s market position is created due to the number of independent sellers with inventory stored in FBA warehouses. The growth of Prime memberships, in addition to an increase of sellers on the platform due to the cost-advantages created by the platform, has made Amazon a one-stop-shop for many users online.
Currently, many sellers are unable to remove their stock in Amazon warehouses as well as unable to deliver to customers. The solution that many sellers have opted for is using alternative third-party logistics to handle warehousing and fulfilment.
Amazon has also altered its Buy Box algorithm to give the preference to sellers offering products that are fulfilled by the merchants as those sellers can fulfil faster than Amazon. Once FBA services return to normal, it is expected that many sellers will return to their regular operations. However, the COVID-19 pandemic has shown that through FBM sellers do not have to rely on Amazon for continued operations. By using a third-party to establish independent fulfilment systems, sellers will be able to function during times of unprecedented changes, as well as being able to offer their products across other marketplaces and integrate all sales processes within the same systems.
To find out more about FBM, establishing fulfilment processes and how it can impact your Amazon store, don’t hesitate to get in touch to see how we can help you.