Amazon is quietly allowing more third-party sellers to restock their wares even though it hasn't formally announced the end of its non-essentials ban
- Amazon's policy of banning non-essential items from its warehouses was supposed to be lifted last Sunday, but instead of an outright end date, the company has been slowly allowing more items in.
- Amazon told sellers 10 days ago that it would start allowing some of them to send non-essential items to its warehouses and has been quietly keeping its word, one industry watcher tells Business Insider.
- The types of non-essential items it has prioritized first seem to be related to the stuff people need while obeying stay-at-home orders such as cookware and games.
- Despite fears of how the ban might hurt sellers, many may have recorded record sales in March and April, even if Amazon ran out of stock and these sellers had to ship their items from their own warehouses, says Greg Mercer, CEO of Jungle Scout.
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April 5 has come and gone, and Amazon has not officially rescinded its ban on stocking non-essential items in its warehouses that was to end that day, sellers tell Business Insider.
However, the company has slowly begun to accept a wider variety of items, as it said it would in its last major communique to sellers on March 27.
One industry expert predicts that if it stays this course, in a matter of weeks, Amazon's warehouses could be back to an almost normal stocking policy.
"Each day they are allowing more and more shipments," says Greg Mercer, CEO of Jungle Scout, software that helps Amazon sellers manage their inventories. "They haven't clearly said this, but from what we can see inside accounts, instead of one hard cutoff [i.e. return to normal stocking] they are starting to accept more shipments so they don't get bombarded all at once."
An Amazon spokesperson said about as much to Business Insider, telling us that the original reduced shipment policy, as well as phasing back into allowing more items to be shelves in its warehouses, was done to protect its warehouse workers. Safety measures mandated by COVID-19 meant that workers had to engage in social distancing while in the warehouse, which limited the number of workers any given fulfillment center could have in any given spot at a time. And that, in turn, limited Amazon's ability to restock.
As to what it will stock and what it won't at this juncture, "That's not super clear-cut by any means," Mercer said.
But in addition to food, health, cleaning and safety items, it has begun to restock things like games and toys, cooking and household goods, the types of things that people who are stuck at home want.
"First it stocked items to stay healthy, and now, it's 'ok kids need something to do,' Mercer says, saying that's why the company allowed a seller to restock last week, for instance, a cornhole game, he said.
If there's a silver lining, it's this: While sellers feared that being banned from Amazon's warehouses for a while could have hurt their businesses, most are actually seeing record sales, Mercer says.
That's because online sellers could still sell via Amazon but had to ship their items from their own warehouses. Normally, Amazon shoppers don't love to buy that way because it involves forfeiting the benefit of free two-day Prime shipping. They have to either wait longer for free shipping (if a seller offered it) or pay for shipping.
But during the COVID-19 crises, buyers have been forced into waiting for longer for purchases across the board for just about everything, essential products and non-essential products alike. Therefore, longer shipping times hasn't been a barrier to sales for the past few weeks.
"I'm confident that on average over March and April, almost all sellers would probably tell you they did more revenue this year than they did last year, even though it was more rockier, more peaks and valleys," Mercer said.
In fact, one seller told us her sales have been up this year compared to last year, even though she does not sell essential items and was not allowed to refresh her stock.
"As far as how my personal Amazon business is doing, I'd say its better than I had expected. We do not sell any essential items so have not been able to restock anything but we were in alright inventory shape before the lockdown," says third-party seller Carlee Peszko. "We do have a few items running low or out and one brand new item we have not been able to launch yet due to the inventory freeze. We are sitting on more inventory than normal that is unable to be transferred to Amazon's warehouses."
But all told, her sales year to date are up 11% over the same period last year, she says.
Mercer thinks Amazon's third-party sellers could continue to see elevated sales throughout the year, even once COVID-19 stay-at-home mandates have been lifted, because a large number of people will likely still choose to avoid crowded stores when they can.
On the other hand, Mercer doesn't believe that COVID-19 has given consumers a lasting new-found patience for long ship times.
"People are more forgiving on slower shipping now but a few weeks from now, I imagine people will go back to, 'I want this tomorrow' again," he says. And that means that sellers will be back to wanting to keep their shelves full at Amazon warehouses, so that their items will continue to qualify for Prime shipping.
Amazon sellers continuously complain that the company isn't great at communicating its changes, or at giving them much time to adjust to a new policy. But an Amazon spokesperson says that, in this case, the company is communicating with sellers on its shipment policies as it adjusts them in a number of ways, including new tools in on Sellers Central pages that lets them check if their Amazon will accept their products again.
"As we begin to selectively bring in more products to our fulfillment centers while maintaining health and safety measures, we have launched new tools for sellers to check which products are eligible on an item-by-item basis. We are also hiring over 100,000 positions across the U.S. to help us meet growing demand from people who need critical supplies and assist employees in our fulfillment centers," Amazon says.
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