The current pandemic has presented many obstacles for Amazon Sellers. Will you be ready for the challenges ahead? Here are 6 key takeaways Amazon sellers can learn from the challenges created by the COVID-19 crisis.
Logistics
Do not place all your eggs, or in the case of Amazon sellers, all of your inventory in one basket. If your Amazon business got trapped by relying only on FBA to store and fulfill your online orders, resulting in experiencing a decrease in sales, this crisis is a major wake up call.
The takeaway is, make sure to always have your inventory available for online consumers by having the inventory available for fulfillment in a few locations such as Amazon FBA centers, your own warehouse, a 3PL (3rd Party Logistics) center, or even your own home.
A winning strategy for every online retailer is to always have products available for sale and fulfillment at any given time across as many channels as possible. Nothing should stand in the way of a retailer in effectively marketing products to consumers. Your retailing “machine” should be bulletproof if you want to survive and prosper in the retail game.
Finance
If you are an Amazon seller living paycheck to paycheck, meaning, from one Amazon deposit cycle to another, you probably took a major hit. The reason is that you may have relied too much on the idea that things will stay constant, or at least improve with your Amazon income. Therefore, you had no cash available for your business saved for a rainy day. Well, the COVID-19 crisis is proving to be weeks of rainy days, with no clear end in sight.
If your sales got negatively affected by the crisis and you are earning less cash, it would be extremely difficult to keep running your business if you have no access to other sources of cash.
The takeaway is, make sure to reach out to any financial institution that you can think of that will be able to accommodate your financial needs. The Small Business Administration (SBA) is proving to be positively helping an unprecedented number of businesses thanks to a quick stimulus package approved by Congress. Another good option for Amazon sellers to get funding is Payoneer’s Cash Advanced program. This program can provide you up to $250,000 in cash instantly and allows you to pay back the loan using your Amazon deposit.
In addition to securing capital, any unproductive spending should be eliminated. Pay close attention to Amazon’s variations of fees. There are a few ways to reduce them. Once reduced it can do wonders for your profit. Auditing your account for FBA reimbursement is a major factor that assists in cost reduction and boosting cash flow. Make sure to do as much as possible to secure all the FBA reimbursement you are eligible for.
Sourcing
The first crisis signal for Amazon sellers sourcing products from China already appeared near the end of 2019 when the first outbreak took place. Now that the virus made its way around the world, it has created a devastating double round for many sellers trying to source products from China and anywhere else in the world.
The takeaway is, try to find and work with factories or suppliers that have the ability to keep operations going, even when a major crisis such as a global pandemic breaks out. Many suppliers are already taking measures to remain operational during this current crisis. Therefore, they are becoming major winners of the current turn of events. Do your business a favor and reach out and search for such suppliers so you can ensure you are working with a sourcing partner that is an effective winner when challenges arrive.
There may be a chance you are working with a very specific set of suppliers due to the unique profile of the products you sell. If you cannot find a proper replacement, focus on working hand and hand, or even demanding from your suppliers to set up procedures in place to resume operations as soon as possible. In other words, if you can’t replace them, help them!
Marketing
Many Amazon sellers use a myriad of techniques to market and advertise the products they sell. For such sellers, COVID-19 has created a chaotic situation in which many standard marketing methods and techniques are no longer effective. Amazon’s algorithm, which in normal times is the ultimate barometer for ranking product listings, has gone berserk.
The consumer demand on Amazon has dramatically changed overnight due to the pandemic and at the moment, there is great uncertainty on how to effectively position PPC campaigns. Many sellers, as a result, have decreased or eliminated PPC spending. If you are a seller that is heavily reliant on generating sales only from PPC spending, you are in a tough spot.
The takeaway is, much to the same lesson of logistics, don’t place all your eggs in one basket. Now is the time for you to find a few marketing alternatives for generating sales on Amazon besides PPC campaigns. Such alternatives include social media ads, Google ads, influencer marketing, keyword listing optimization, and much more. One simple way to discover the best marketing strategies is to join Amazon seller groups on Facebook and follow the trends. There is an incredible scene happening on social media that is changing the lives of entrepreneurs every day.
Make sure to look into each function and make an evaluation
Operations
Luckily for Amazon sellers, the retailing platform is online; therefore, Amazon storefronts are able to remain active as opposed to being closed like most brick and mortar stores. This is a major win for Amazon sellers that should not be underestimated. Nevertheless, Amazon sellers are faced with challenges of how to remain effectively operational with all the physical restraints imposed due to the pandemic.
The challenges of the physical restrain include maintaining different team members working together in sync remotely and effectively. Amazon businesses need to juggle all the operational functions of running a business such as accounting, finance, logistics, marketing, positive morale, and much more.
Daily Zoom sessions across teams are turning out to be one of the most effective ways to overcome the physical restraints, and for many sellers, it is proving an even more effective way to run the business than before. It will be very interesting to see how many Amazon businesses will keep the remote operational structure long after the pandemic will be (hopefully) gone.
The takeaway is, make sure to set up a remote conferencing system such as Zoom in place and have a daily virtual meeting routine to keep everything running smoothly across all your teams. Integrate task organizing software like Trello or Monday to manage the flow of work for yourself and anyone else in your organization. If you operated your Amazon business in an old school fashion before the crisis, this is your wake up call and it is time to adapt or fall short.
Business Development
After everything is set and done with the COVID-19 pandemic, it is very encouraging to realize that the eCommerce businesses will be the biggest winners. Even if your Amazon business has sustained a hit due to the crisis, make sure to take any action necessary to keep it alive so you can get a chance to taste the fruits of the eCommerce victory.
The turnout of COVID-19 is forcing a massive wave of consumers to shop online and Amazon is the premier platform to do so. Amazon sellers sooner than later will be able to offer and cater products to these newly minted online consumers. This outlook is looking very promising since many of the new online shoppers are of senior age groups with strong financial purchasing power. In other words, old money is finding its way to new money. If you are able to stay in the game, you will enjoy it. If not, you’ll be missing out.
The takeaway is, do whatever you can to make sure your online business survives this crisis. Whether you are offering your products on Amazon on any other platform, more consumers are shopping online than ever before and this is the time to shine as an eCommerce seller.
Summary
I hope that you find this article helpful in getting some clarity on the takeaways of facing the challenging times of the COVID-19 pandemic. If you have any questions, feel free to reach out to us at support@getida.com.
Good luck, and stay safe and healthy out there!
If your sales have been affected by the COVID-19 pandemic, now would be the best time to secure a financial recovery. If you need help securing FBA reimbursements, click on the Sign-Up link for GETIDA below:
