E-Land Technology Driven E-commerce was informed that In response to the coronavirus outbreak, Amazon is already taking steps to avoid disruptions in China's supply chain so as not to affect its 2020 Prime Day promotions.
According to the New York Times, this week, Amazon sent an email to third-party sellers expressing concern over the two-day Prime Day inventory in mid-July. According to one of the reports, Amazon has placed a non-cyclical order with sellers in preparation for a possible supply chain disruption due to recent global events due to the outbreak.
Most of the products that Amazon and its partners sell on the platform are made in China. According to the latest report from the World Health Organization, the coronavirus epidemic in China has killed more than 2,200 people and infected more than 75,500 people. During the riots, factories throughout the country were blocked, workers were isolated, and factories were slow to resume normal production. According to the New York Times, due to the obstruction of the production of consumer goods such as mobile phones, clothing and automobiles, Amazon has been expanding the scale of purchases, and the frequency of purchases is increasing. At the same time, suppliers are cutting back on advertising and promotions so they don't sell out quickly.
Due to Amazon's inventory structure, it is more likely to experience potential shortages than other retailers. The company tends to have less inventory than its competitors, which allows it to operate more efficiently. In addition, because most products on Amazon are sold by third-party sellers, the retail giant has limited visibility into the supply because it only facilitates these sales.
According to the New York Times, some brands have cut their ads on Amazon by 25% to 50% and stopped their planned promotions. Other sellers are considering whether to raise prices to prevent stock-outs.
Many companies have said that the outbreak could cost them money. This week, Apple lowered its sales forecast, and iPhone supply was temporarily restricted. Nike closed half of its Chinese stores, and Adidas has taken similar steps.
Amazon's chaos shows how important Prime Day is to its profits. Last year, the company sold more than 175 million items during the promotion period.