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Amazon.com suspend FBA for small business sellers

By Chris Dawson March 17, 2020 - 2:51 pm

Amazon.com have taken the unprecedented decision to suspend FBA for all small business sellers, arguably at just the time that small businesses most need Amazon in order to survive. Amazon’s reason is that they are seeing high demand for household essentials and medical supplies and are prioritising those products consumers are most in need of in their warehouses. Sellers will be unable to create new FBA shipments until at least three weeks time with the current date for resumption of normal FBA operations in the US being the 5th of April.

Whilst it may be morally right to ensure incoming shipments are the most needed products by consumers, many of whom if they aren’t already will soon be self-isolating, it’s a kick in the teeth for the hundreds of thousands of small businesses who rely on Amazon for their business.

It’s worth highlighting that Amazon are NOT saying you can’t sell on the Amazon marketplace. What they are saying is that they are shifting the might of the Amazon fulfilment and shipping to bring essential supplies to the millions of households who will be in dire need of assistance. Merchants can still sell on Amazon but will be forced to fulfil orders themselves.

Fufilment by Merchant (FBM) will often be slower than FBA, but in reality if you’re selling puzzle books and jigsaw puzzles to keep consumers occupied while they’re sat at home, they’ll probably appreciate getting their toilet roll and cough medicine swiftly from Amazon rather than vice versa. However it does also mean that as merchants inevitably fall ill, they’ll no longer be able to have their stock sent into FBA and if they can’t fulfil themselves their income will be cut off.

Products in just 6 categories will continue to be accepted into FBA and this news applies to all Amazon UK, EU and US marketplaces.

  • Baby Products
  • Health & Household
  • Beauty & Personal Care (including personal care appliances)
  • Grocery
  • Industrial & Scientific
  • Pet Supplies

Amazon Suspend FBA Announcement

“We are closely monitoring the developments of COVID-19 and its impact on our customers, selling partners, and employees.
 
We are seeing increased online shopping, and as a result some products such as household staples and medical supplies are out of stock. With this in mind, we are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers.
 
For products other than these, we have temporarily disabled shipment creation. We are taking a similar approach with retail vendors.
 
This will be in effect today through April 5, 2020, and we will let you know once we resume regular operations. Shipments created before today will be received at fulfillment centers.
 
You can learn more about this on this Help page. Please note that Selling Partner Support does not have further guidance.
 
We understand this is a change to your business, and we did not take this decision lightly. We are working around the clock to increase capacity and yesterday announced that we are opening 100,000 new full- and part-time positions in our fulfillment centers across the US.
 
We appreciate your understanding as we prioritize the above products for our customers.
 
Thank you for your patience, and for participating in FBA.”

– Amazon

  • Simon E
    1 year ago

    Yeahh, we could do with some more toilet rolls. I have 600 rolls sitting beside the bog and I have only used one this week, so in DIRE need before the inevitable apocalypse arrives and I am quarantined for six months.

    Maybe I could start eating it when the 300 kilos of pasta runs out.

    B-)

  • What hunts.

  • 1 year ago

    We got the same on UK today

  • 1 year ago

    It makes sense, but also shows some of the flaws in their system.

    They’ve pushed FBA and SFP, but SFP is too expensive for many products and once existing stocks run out, FBA will be off the table too. So what happens to those products and the sales?

    I was told many Amazon buyers automatically select the Prime filter when searching, but if buyers aren’t able to find these excluded products with the Prime filter selected, will they de-select the filter in order to expand their search? If they do, will they be unimpressed with Amazon’s predicted Seller delivery times?

    Checking one of my items, Amazon only tell sellers they can have it Fri/Sat, with no mention of shipping upgrades. Ebay says Fri too for the free delivery, but also tells buyers they can upgrade it to Thurs for £1. TBH, they could still get it tomorrow.

    Perhaps this time, Amazon needs to copy ebay and let buyers know when they could actually get those things. If they don’t, they risk buyers going elsewhere.

  • Harry
    1 year ago

    Ehem… looks like someone’s got to spend a ton on sponsor to maintain prod ranking, well played Amazon

  • John pickels
    1 year ago

    Good PR by Amazon claiming to support essential goods, however its far from that black and white

    The majority of products supplied in those categories (which sell at a reasonable rate) by FBA are supplied by Amazon and 3rd party sellers can not get a look in, whether because Amazon dont share the buy button themselves or its impossible to make margin unless you are buying on the scale of a supermarket chain or Amazon.

    Also many sellers business models are based on fulfillment by Amazon as self fulfillment is dominated by the chase to the bottom brigade who work from home and work for no margin or sell at losses so sellers avoid that.

    Also im sure this would not be happening if Amazon were not swamped supplying those products that they dominate in generally, so an easy solution for Amazon is to ditch the third party sellers, frees up capacity.

    End result is on the tens of thousands of businesses whos business is based on FBA their income has just been pulled from under them, third party businesses will go out of business, employees lose jobs, Amazon become more dominant, Amazon is more profitable.

    Also ive no doubt Amazon will still charge them rent for their storage centres.

    Also while amazon will claim the moral high ground, is this not a case of Amazon yet again manipulating their dominant online market place which is a breach of EU law (whether or not you agree or disagree with what theyve done to 3rd Party Sellers and how theyve dressed it up)

    • 1 year ago

      That’s just conspiracy theory.

      Here is an actual fact for you: Amazon have actively been on emails and the phone, chasing my small business this month, wanting to see if anything would sell better in FBA. Various enticements are available, including free inbound shipping, to make it as risk free as possible.

      I was all set to give it a go. We’d gotten as far as selecting products to trial, converting listings so there would be FBA and our normal seller fulfilled running at the same time, so we could see what difference it would make. We got as for as the final upload screen before getting to the labelling stage, at which point, the mysterious “temporarily prioritizing products” screen came up. The FBA guy who was talking me through the process didn’t know anything about it, but after a meeting, phoned back in the afternoon to confirm the situation and apologise.

      FBA won’t be for everyone and it won’t be suitable for all products. Storage costs are reasonable and delivery costs are good, BUT…delivery applies per item. So Amazon will do extremely well if a buyer goes for multiples and they can ship it all from 1 FBA warehouse location, or even 2 locations.

      Looking at examples of past Amazon orders, had they all been FBA, there are many instances where Amazon could have been making £30-£50 profit on the delivery of a single order alone.

      This would have been more than the profit made on the goods themselves and that is not the sort of business you just casually walk away from, even temporarily. They cannot make this delivery profit on their own products, only 3rd party seller FBA.

      So how does that fit into your conspiracy? Amazon are giving up huge FBA delivery profits because…

  • 1 year ago

    Hi, we are a WAPI company. We are not big but already very active in e-comm market.

    We provide fulfillment, courier and financial services. We are working and ready to help you with your parcels during this difficult time.
    20 countries, 48 warehouses.

    You can find more information on our website wapi.ee

  • 1 year ago

    Amazon are doing what we as business people all do. Prioritise the stuff thats selling through.

  • PAUL S
    1 year ago

    I look forward to amazon suspending FBA storage fees.

    • Rob
      1 year ago

      As nice as suspending storage fees would be for us all, it won’t happen. I don’t see storage fees as being a problem compared with the huge impact of not being able to ship any more stock to FBA.
      Any stock we all have currently at FBA wil continue to be listed and sold as normal.
      I have already a phone call this morning from one of my main suppliers offering a massive discount. They are obviously very worried too. The problem is that I only do well with their items through FBA, not through Merchant fulfilled, Ebay or oue website, and they are very bulky, so will have to try and time purchasing to coincide with resumption of FBA shipments.

  • Chris
    1 year ago

    A problem that I have here in France for self -fulfillment (as a temporary alternative to FBA) is that of 17000 post offices in France only 1600 are open – and none near me. So, as well as thinking of changing fulfillment method I’m also thinking of changing transporter.
    Being honest though, I think that if the prioritising is relatively short, it won’t have a huge impact on my business.

  • PAUL S
    1 year ago

    This would be a good time for Amazon to support sellers instead of constantly taking from us. They can afford to do it.

  • 1 year ago

    Two things:-
    1) I thought the issue would be extended to Vendor Central, and there was a notice on VC. However today (Weds) we received a bunch of POs in categories other than the above. So it would seem the article is correct, and that VC POs are more selective. Good for product ranking at least, plus to avoid inventory sitting there not moving.
    2) We have 2 warehouse sites in the UK. Whilst we are not a 3PL as such, we have space and resources in the midlands site for more inventory and have staff to process higher quantities of FBM orders, including Seller Fulfilled Prime, which is your next-best bet if you cant replenish FBA. See percygroup.co.uk for details.

  • 1 year ago

    Amazing how quickly the euphoria of the longest bull run in history is a distant memory now…

    If anyone is struggling due to new Amazon restrictions, we operate a UK based ecommerce fulfilment house in Greater Manchester. We might be able to help you at JustFulfil.

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