Unprecedented times are prompting brands, sellers and retailers of all sizes to act fast when it comes to managing and optimizing their Amazon presence – whether they sell essentials or not. Here are 5 tips to inject into your strategy right away:
Find an FBM partner and develop a strategy
Many merchants rely on in-house delivery service Fulfillment by Amazon to reach customers quickly and efficiently. Due to COVID-19, brands can expect delivery delays of non-essential goods to extend for at least another month per a recent Bloomberg article, putting sellers in even more of a bind.
Finding an FBM partner in the form of a 3PL provider equipped to handle e-commerce orders or an authorized 3rd party reseller can help prevent a slow-down of receiving outbound shipments. Consumers can continue to buy your products, but they are simply shipped from 3P warehouse.
Ensuring that you have a third-party merchant partner with adequate FBM capabilities is key. FBM offers reduce your reliance on FBA in two ways:
- They act as a stop-gap for regular (non-COVID-19 times) out of stocks
- They allow listings to stay in stock during these crazy times, as Amazon puts restrictions on what is allowed in their Fulfillment Centers.
Long-term, this model may be a fit for you to remove the reliance on Amazon’s distribution and hedge your risk in growing your brand.
Ask Amazon for an FBA shipping exception
Ultimately, brands are still up against Amazon’s algorithm when seeking an FBA shipping exception. Look to open up a discussion with Amazon internally, which can be escalated to their Compliance Team to make a change. This works a lot like restricted products on Amazon where there are a series of steps when opening a case.
The Bloomberg article also references a seller (and software provider) who’s allowed to sell aquarium filters, but not vacuum bags and air filters, so the definition of what is essential and what is not is left up to Amazon’s algorithm. However, opening a case may increase your chances of getting an exception.
Match inventory and pricing to avoid Out of Stocks
The single largest contributor to lost sales – regardless of fulfillment method on Amazon (Amazon Direct, 3P, or Seller Central) – is when a product runs out of stock (OOS). With the changing rules and sales velocities on the platform, original forecasts (even those from 2 weeks ago, let alone 2 months ago) could lead to Out Of Stocks on particular essential items.
Avoid Suppressed Buy Boxes as prices rise
Suppressed Buy Boxes are the second-leading contributor to lost sales. They occur when Amazon lowers the price on an Amazon listing because it is priced even lower at another retailer like Walmart.com or Jet.com. The Buy Box, or the ability to actually click and buy the item, goes away on the Amazon listing, thereby causing the Seller, Retailer or Brand to lose the sale. When this happens, it results in a 30-50% loss in sales for a given product (ASIN) overnight.
Many sellers may be seeking higher margin, but it should be balanced with maintaining a fair market price for the consumer.
Make Amazon a larger part of your future retail strategy
The shift to online shopping will likely have lasting effects on consumer behavior well beyond the end of the COVID-19 crisis. Declining brick-and-mortar sales is likely to continue, but sellers must balance that with supply chain and fulfillment challenges. Over the past two months, the Health & Personal Care Category has seen a 50-70% increase in sales on Amazon prior to COVID-19, with the last week being the highest increase at 70%.
It is more important now than ever before to optimize your Amazon presence and to closely monitor the shifts in consumer behavior and how the channel institutes new policies that impact buying patterns in the short- and long-run.
What is the #1 challenge you are facing on Amazon during these tough times? (Feel free to direct message me if you need any guidance or would simply like to commiserate).