Amazon Freezes Non-Essential-Product Shipments from Its Third-Party FBA Sellers

UPDATE

As of April 6, Amazon has not removed its temporary freeze on non-essential items, which it originally stated would end April 5. 

In its FAQ, Amazon states: “Given that the impact of COVID-19 is still developing, we do not have an exact date when operations will be fully restored. Instead, whenever possible we will allow more products to be received, while still ensuring our fulfillment centers are able to process high-priority products.”

Follow here for more news updates:

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On Tuesday, March 17, Amazon notified its US and EU sellers that it would no longer be receiving non-essential shipments of Fulfilled-by-Amazon (FBA) inventory. The freeze for those marketplaces runs through April 5, 2020.

This is in response to the worldwide coronavirus outbreak and will presumably allow Amazon to focus on fulfilling the essential health, safety, and household products consumers are demanding. 

According to Jungle Scout’s data, at least 53% of Amazon sellers are affected by this freeze. Nearly all third-party sellers sell through Amazon FBA, and only select sellers sell in the currently allowed categories.

Amazon sent the following notification:

Temporarily prioritizing products coming into our fulfillment centers

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 also stops delivery of non-essential goods in France, Italy, and India

On March 21, Reuters reported that Amazon would stop the delivery of non-essential goods from its French (amazon.fr) and Italian (amazon.it) marketplaces.  

In a statement, an Amazon spokesperson said, “We will temporarily stop taking orders on some non-essential products on Amazon.it and Amazon.fr. This lets fulfillment center associates focus on receiving and shipping the products customers need most at this time.” (Reuters). 

And on March 24, Amazon further announced that Amazon India (amazon.in) would only ship essential goods to consumers following Prime Minister Narendra Modi’s announcement that India would enter a 21-day lockdown.

Currently, there is no word on when these restrictions will be lifted.

What does this mean for US and EU Amazon FBA sellers?

As of this writing, Amazon FBA sellers in the US and EU markets will not be able to create shipments to be received at Amazon’s fulfillment centers through Seller Central. Until April 6, Amazon will only accept essential items such as household staples and medical supplies.

Currently, the categories Amazon is currently accepting are as follows:

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

Note: Not all products in these categories qualify as essential.

However, if FBA sellers correctly classify a product but still can’t make a shipping order, then Amazon is not prioritizing the product in question.

And while many Amazon sellers sell in multiple of Amazon’s 27 physical product categories, many will still be out of luck for not selling in the six allowed. 

How many Amazon sellers sell in the allowed product categories?

• Baby – 17%
• Health & Household – 20%
• Beauty & Personal Care – 20%
• Grocery – 12% 
• Industrial & Scientific – 9%
• Pet Supplies – 15%

In addition, sellers in the French and Italian markets will not be able to sell products out of those categories, even if “grandfathered-in”. (22% of active sellers in the French marketplace and 23% of active sellers in the Italian marketplace have no other income than their Amazon business. Not only could this move affect the seller’s business, but may leave them without a stream of income during these trying times.)

Aside from Italy, India, and France, Amazon still receiving and shipping “grandfathered-in” inventory as planned

If you created your replenishment order before March 17, Amazon will still receive it. And while essential items will be given priority, Amazon will still pick, pack, and ship non-essentials — with the exception of France, Italy, and India.

However, in markets where non-essentials are still available, non-essential orders may ship more slowly than normal, especially as shipping carriers feel the strain of increased shipping during the coronavirus outbreak.

Amazon FBA sellers can still use other methods of fulfillment

Amazon encourages sellers who typically sell FBA to use their own resources and carriers for shipping products, and to sell Fulfilled by Merchant (FBM).

What are the differences between Amazon FBA and FBM?

Fulfillment by Amazon (FBA) is a method of selling on Amazon in which a seller (or a seller’s supplier) sends their products directly to Amazon’s warehouses. Amazon then stores the inventory and ships it directly to the customer (often through 2-day Prime shipping) and manages customer support.

Fulfillment by Merchant (FBM) is a method of selling on Amazon in which a seller lists their products on Amazon, but manages all storage, shipping, and customer support themselves (or through another third party).

Approximately 94% of all third-party Amazon sellers sell through FBA; 66% sell only through FBA, while 29% sell through both FBA and FBM.

How will this affect Fulfillment by Merchant (FBM) sales and sellers?

So far, there is no change for Fulfillment by Merchant (FBM) sellers who pick, pack, and ship their own goods for orders sold on Amazon. Amazon sellers are still able to create and list products.

FBM-only sellers account for just 6% of Amazon’s third-party sellers.

Can sellers still sell non-essential products?

Yes, in all markets except for Italy, India, and France, both FBA and FBM sellers can still sell products that are non-essential. The only change for those sellers is that FBA sellers cannot send non-essential inventory into Amazon’s fulfillment network.

Therefore, sellers must ship any inventory that is not already a part of Amazon’s FBA supply chain themselves. Or, they can use another third-party fulfillment network.

In the French, Indian, and Italian marketplaces, sellers can still list and sell non-essential items through fulfillment my merchant.

However, FBA sellers who hoped to have inventory stored at Amazon’s fulfillment centers returned to them (in order to sell it FBM) are — for the time being — out of luck. Amazon recently sent out an email stating that removal operations are being paused temporarily in some of their fulfillment centers.

But, that doesn’t mean sellers can’t still submit removal orders. It just means that fulfilling those removal requests will take longer than usual. Auto-removals are also going to be held up due to this interim stoppage.

On the plus side, Amazon is waiving the long-term storage fee for April for sellers in the US, the UK, France, Italy, Germany, Spain, Poland, and the Czech Republic.

Can sellers sell essential products?

Sellers can still sell essential products as long as they are able to create listings for it. But, sellers looking to list products in one of the six essential categories may need Amazon’s approval. Amazon has “gated” some of the categories.

Furthermore, Amazon has started to crack down on price gouging practices for essential goods like hand sanitizer, toilet paper, and protective face masks. Listings with high prices are being taken down and in some cases Amazon is even threatening prosecution.

How are sellers reacting to the news?

Some Amazon sellers reacted positively, congratulating Amazon for this move. 

“I hope it is for the best, 2020 is a nightmare,” replied one seller to Amazon’s notification in Seller Central. 

However, most sellers have reacted negatively, afraid that the decision will affect their business. 

“Amazon just put tons of businesses out of business,” replied one seller. “Destroyed thousands of jobs amidst a crisis. Horrible joke. Absolute joke. No warning. Expect major lawsuits coming from sellers who now will go bankrupt.”

Meanwhile, other sellers are asking Amazon to suspend in-house loan payments. They’ve also asked for professional subscription fees and other costs associated with selling on Amazon to be put on hold.

So far, there is no word whether or not Amazon will suspend those costs. 

What does this mean for consumers?

Overall, this is good news for self-isolating consumers who are still trying to get much-needed supplies during the coronavirus outbreak.

With Amazon’s 750,000+ employees focusing on essential items, and another 100,000 being hired in the US alone, goods may still ship on time and reach those who need it most.

Plus, Amazon’s moves echo similar actions taken by Chinese suppliers JD.com and Alibaba.

In February during the height of China’s own outbreak, JD.com hired an additional 20,000 drivers. And Alibaba created an employee-sharing scheme that allowed those who work in entertainment, hospitality, restaurants, and other businesses impacted by China’s lockdown temporary employment during the outbreak.

For more information, please contact [email protected].

 

*Disclaimer: We updated this article on March 25, 2020 to reflect Amazon’s announcement about the change to amazon.in and non-essential goods.