Another interesting week in the world. Another interesting week in Amazon world.
Straight to the point.
Amazon announcements in the last week:
- Pausing removals (both auto and manual) for most Amazon marketplaces, in the company’s effort to focus on orders delivery and processing of essentials items
- because of the above, Amazon is waiving the April 15 long-term storage fees for inventory stored in the US and Europe
- Waiving the April 15 long-term storage fees for inventory stored in the US and Europe
- Waiving 2 weeks of April storage fees for inventory stored in the US and Europe (most recent announcement)
- Amazon is broadening the list of what they consider prioritized products, on ‘an item-by-item basis.
It seems that Amazon is being generous, but it’s really crumbs of the table, aka making up for all the delays with FBA inventory shipments that sellers don’t have control over.
Red Rocks personal observations:
Based on our own test orders Amazon is shortening delivery times for non-essentials FBA items. Example, a product ordered on March 26th had original delivery date of April 23rd, and is now showing a delivery date of April 1st. An essential category item ordered on March 26th was delivered on March 30th (4 days).
This is anecdotal evidence, but based on what we are seeing Amazon delivering items in less time than displayed on product pages at the time of purchase.
Amazon’s prioritization appears to be the following:
- Prime Essential categories
- Prime non-essentials categories
- non-Prime order
- removals, disposals, multi-channel fulfillments
Of course, a lot also depends on product availability in different warehouses, knowing that is in constant movement it’s hard to predict if items will be delivered before displayed delivery date.
Now, what does this mean to you?
FAQ style, based on the most frequent questions we have gotten:
I can do both FBA and FBM, should I remove my inventory from FBA?
NO. Just like physical human movement, movement of inventory now is a risk.
We are seeing Amazon FBA starting to catch up, but amidst ‘day to day’ mood, Amazon closing a handful of warehouses due to COVID-19, there are still enough wrinkles in getting back to ‘normal’. Additionally, Amazon algorithm still favors FBA in Buy Box choices.
What we DO suggest is to have FBM as a backup scenario. Since you have both FBA and FBM offers on the same product page, as long as you have reliable FBM fulfillment, offering an FBM backup is the best way to mitigate delays and interruptions in getting orders out.
Our products are what Amazon deems non-essentials for FBA. What are the chances of us being able to send inventory after April 5th?
They are getting better! Per Amazon:
‘ While we will continue prioritizing the products we can receive beyond April 5, we are now able to broaden the list. Given our constrained capacity, we are doing this on an item-by-item basis. We have updated the Restock Inventory page and Restock report in Seller Central so you can check which products are eligible for shipment creation’
What that means: a) check Restock Inventory page frequently b) test creating a shipment on a frequent basis.
Amazon is not great with granular announcements, and a lot of changes go under the radar. We anticipate a lot of non-essentials ASINs will be eligible to be sent in before Amazon does a broad announcement.
Our sales dropped, we are a non-essential/luxury/not-toilet-paper brand. What should we do with advertising?
First of, do not completely halt advertising.
Look at what is working now, what changed in the last few weeks. Change in ACOS/ROAS? Impressions? Conversion rate changes?
Laser focus on efficiency of resources, which is advertising money, time, human brain power.
Perry Marshall, a business and marketing strategist both my business partner and I listen to, talks about 120/20 rule:
Everybody knows 80/20 rule, but it really is a 120/20 rule:
20% of your products creating 120% profit, 60% keep your door open, and anything outside of those performing 20% is losing you money.
Approach your Amazon business the same way: what are those 20% ASINs? Give the most attention and money.
What are 60%? Lower bids, budgets, but keep them running.
Outside of that 20% of products creating sales? Be more ruthless with them, potentially stopping, or get really strict with what you spend on them.
Need feedback on how to run Amazon business in times of ambiguity? Let’s chat