Leaked emails show Amazon is moving full steam ahead with this year's Prime Day shopping extravaganza, even as it grapples with the coronavirus pandemic
- Amazon is inviting sellers and vendors to submit deals for this year's Prime Day, its annual mega shopping event, despite the supply chain issues it's facing amid the coronavirus outbreak.
- One email said vendors should be ready to ship their Prime Day inventory to Amazon warehouses by May, as purchase orders will be placed from as early as March 31.
- For special Lightning Deals, limited-time offers that get featured on Amazon's deals page, the deadline to submit is May 8 and an extra $500 per deal is required, one of the emails said.
- The invitations show some parts of Amazon is already working on future events, signaling anticipation of its supply chain possibly normalizing within a few weeks.
- But some sellers are skeptical of Prime Day taking place as scheduled and expect it to be pushed back to a later date, as they are still dealing with a number of supply chain issues that aren't expected to be solved right away.
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Amazon Prime Day, the company's annual shopping extravaganza marked by frenzied sales of TVs, sneakers and other items, would seem like an event destined to be scrapped amid the deadly coronavirus outbreak, alongside industry conferences, film festivals, and the Summer Olympics.
But according to Amazon's message to merchants, it's full speed ahead.
Amazon has been inviting merchants to join this year's Prime Day, which traditionally takes place in mid-July, and instructing some of its top partners to be ready to ship Prime Day inventory to Amazon warehouses by May, according to recent emails obtained by Business Insider. The preparations for the massive consumer sales event come as Amazon scrambles to respond to the pandemic, overhauling its supply chain to prioritize essential items and shuttering warehouses in which workers have tested positive for COVID-19.
A spokesperson for Amazon declined to comment on the emails and said, in a statement, that Amazon has not made "any announcements about Prime Day."
"We remain focused on ensuring the safety of our associates and serving our customers, while naturally evaluating future plan," the statement said.
Still, the emails to merchants viewed by Business Insider suggest the company is moving forward with plans for a July Prime Day, even if it might ultimately decide to postpone or cancel the event.
Holding the event in July would be a massive undertaking for Amazon at a time when the pandemic has strained its operations. And Prime Day's celebration of unfettered consumption amid the hardships of the coronavirus risks creating bad optics for the company.
On the other hand, Prime Day could provide a much needed boost for businesses if the spread of the disease has abated by the summer. And with worries of a virus-triggered recession mounting, Amazon's Prime Day could provide an early indication of the resilience of the consumer and the economy.
"All deal inventory should be ready to ship"
Amazon often calls Prime Day the biggest shopping event of the year. In 2019, it sold over 175 million items, surpassing the combined sales of the previous year's Black Friday and Cyber Monday.
The way the event works is that suppliers wholesale their products to Amazon, which resells the goods at a markup. For third-party sellers, they can directly sell their products on Amazon's marketplace.
In emails sent as recently as this week, Amazon told its suppliers, known as first-party vendors, that they should be ready to ship their Prime Day inventory to warehouses by May. Amazon will start placing orders for those products from as early as March 31.
"Amazon is carrying on as if Prime Day will still happen in mid-July as it has for the past few years," said Jared Bucci, founder of marketing agency Stay Hungry Digital.
In a separate email last week, Amazon attached a note titled "Amazon Prime Day 2020 Vendor Operational Preparedness," which says all deals for Prime Day should be submitted by April 17. For Prime Day Lightning Deals, a limited-time promotion that gets featured on Amazon's deals page, the deadline is May 8 and an extra $500 fee per deal is required.
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Perhaps because of the logistics issues caused by the coronavirus, Amazon said that vendors will get eight extra days to ship Prime Day products to Amazon warehouses this year "due to the increase in order volume."
"All deal inventory should be ready to ship by mid-May to reduce risk of out-of-stock on Prime Day," one of the emails said.
Meanwhile, another note posted on Amazon's internal message board for third-party sellers this month, seen by Business Insider, says "Prime Day is quickly approaching," with instructions for sellers to submit deals for the event.
Some sellers expect Prime Day will be delayed
Prime Day has taken place in early to mid July every year since it began in 2015. The first event lasted for 24 hours but Prime Day was extended to 48 hours last year.
It's unclear when exactly this year's event will take place. In one of the emails to sellers, Amazon said this year's Prime Day will be held around the same time it was in previous years, without specifying an exact date.
"We have not confirmed or announced the date of Prime Day, however we expect that it will take place within a similar time frame as years past," the email said. "A definitive date will be announced as we get closer to the event."
Some sellers expect Prime Day to get pushed back this year. Bucci said he wouldn't be surprised if Amazon delayed it, given all the challenges facing the company. Besides the shipping delays and inventory restrictions, Amazon is also dealing with a growing number of coronavirus cases at its warehouses, leading to some facility closures. If the current pandemic goes on for longer than expected, it's hard to imagine many sellers and vendors being ready for the July event, Bucci said.
Multiple sellers have told Business Insider that Prime Day is the last thing on their minds right now. While demand for emergency products, like hand sanitizers and toilet paper, are jumping through the roof, sellers of most non-vital products are seeing steep declines in sales as discretionary spending has dropped. The recent shipment delays and restrictions around inventory are making some sellers worried about even staying in business.
Alan Adams, who runs an e-commerce consulting agency called Navazon, said the Prime Day invitations seem ill-timed. He said it's possible there's a disconnect between Amazon's upper management and rank-and-file employees, as the whole company is scrambling to get through the coronavirus.
"I think mid-level employees are not in sync with senior management on Prime day communication," Adams said. "Prime Day is likely on hold."
In a letter to employees last week, Amazon CEO Jeff Bezos warned "things are going to get worse before getting better." He said he'll be spending most of his time on solving the biggest challenges related to the coronavirus.
"My own time and thinking is now wholly focused on COVID-19 and how Amazon can best play its role," Bezos wrote.
A test case for economic recovery
Even with infections yet to peak in the US, there are signs that some parts of Amazon already appear to be preparing for normal operations - signaling possible supply chain improvements within a few weeks.
On Friday, for example, Amazon told sellers that it's loosening the restrictions put on products coming into its warehouses, just 10 days after saying it would give priority to more vital items, like medical supplies and household staples, to make storage space for them.
This year's Prime Day has the added significance of serving as a potential testing ground for the broader economy's purchasing power. Since the event typically takes place in July, the volume of sales it generates would be a good indicator of the level of economic recovery the country sees by then.
To make Prime Day a success this year, Amazon appears to be readying for a massive marketing blitz. In one of the emails, Amazon said that sellers should expect a variety of marketing and promotions.
"This year Amazon will supply a wide-range of marketing, both on-site and off-site, for Prime Day that could drive customers and sales to your truly amazing deals," the email said.
That means this year's Prime Day could be a huge opportunity for Amazon sellers to make up for some of the lost revenue and momentum caused by the coronavirus pandemic, according to Gabe Ray, cofounder of Evolved Commerce.
"I can see Amazon using Prime Day as more than just 'Christmas in July' this year," said Ray. "Sellers and vendors need to be aware of the opportunities to help recover."