Amazon Sellers Face Daily Challenges During the Pandemic

The whole world has changed in a week during the pandemic, and it is hard to keep up with all the news that affects Amazon sellers. This week I looked at the news from the perspective of what will specifically impact sellers and what – if anything – we can do about it.

Amazon Sends Comforting Reassurances to its Sellers

Oh, you missed that? LOL. You have to read between the lines because one thing Amazon did NOT do was send anything like the thoughtful mass email Jeff Bezos sent his employees. Many sellers were angered thinking that – once again – Amazon does not care about its sellers. It didn’t help with the anger that eBay sent a lovely letter to its sellers offering help with fees for 30 days.

The more cynical among us (me) never expected any kind of “we’re in it together” communications. So, where’s the “I love you,” Cynthia, you ask? Well, Amazon:

That’s good news.

Amazon Sends its Sellers into a Tailspin

However, for the many sellers who aren’t selling essential goods, some of Amazon’s decisions have been painful. The company:

• Amazon has a crazy idea of essential goods. Because the shut down was based on keywords, some legit products couldn’t be shipped in and some weird products were still selling. This is slowly being rectified.

• Sellers had to figure out the hard way what Amazon would accept. Besides health, grocery and baby items, toys (at least some of them) are considered essential. Amazon did not provide clear guidelines, so sellers had to argue their cases which sometimes worked and sometimes didn’t.

• Amazon has stopped FBA delivery of ALL non-essential items so even if you had inventory at the warehouse, it won’t be sent to buyers for the foreseeable future. Dates are slipping into May at this point.

• Amazon closed Prime Pantry temporarily. We don’t know when it will be back.

• Sellers lost the buy box across the board. Even those who are able to merchant-fulfill (many can’t because of local lockdowns) are finding their products don’t get the buy box. So, an FBA order that won’t be shipped for four weeks gets the buy box over the MF seller who can get it out in a few days. This recent “oops” article in VOX summed it up pretty well.

• Sellers can’t advertise (no buy box = no ads displayed)

• MF sellers are forced to lower their prices significantly to get the buy box – even when only competing against their own FBA order!

• Sometimes they still don’t get the buy box.

• 3900 sellers were expelled from the platform and turned over to law enforcement for profiteering. OK, maybe that’s a good thing…except Amazon’s own prices for most goods have jumped several multiples. They’re not holding themselves accountable.

• Sellers have to follow the anti-profiteering rules of the strictest state. Because they have no control over where their goods are sent, any state could come after them. 

• Seller acquisition costs have jumped dramatically because of supply chain delays and sellers cannot always comply with the “no more than 20% over normal retail” rules of several states without losing their shirts.

• Sellers are afraid of lawsuits. They are not selling hand sanitizer, wipes, disinfectants, toilet paper, masks and a host of other products because they could have to defend themselves against a profiteering takedown by Amazon or legal action even if their prices are legit. They are sitting on pallets of this stuff with no way to sell it. Not surprisingly, several mainland Chinese sellers have a bunch of knock-off masks for sale on the platform right now because Amazon can’t seem to control them, and they have no consequences for selling fakes.

• Those with the greatest need want donations. Even if sellers are able to sell directly to hospitals, first responders, etc., they are being asked for donations. Many sellers are stepping up to help their communities from their own inventories, but if you have $1M of 3M N95 masks, you can’t donate them all. You’ll go out of business.

• Amazon is semi-price fixing by sending sellers notifications that their prices are too high, by suppressing their listings and by forcing them to compete against EVERY e-commerce site on the internet – even if the seller’s products are following MAP (minimum advertised price) contracts.

• eBay and other platforms won’t allow you to list. Again, you can’t list your hand sanitizer on eBay and some other e-platforms because they forbid any listings for these products.

• Amazon is verifying grandfathered accounts. In the midst of fear and chaos, Amazon adds…more fear and chaos. As I’ve discussed before, verification is serious. A lot of sellers fail for very small details and then they can’t sell ever again.

• Amazon asked buyers to cooperate with a DOJ probe. This is highly upsetting to sellers – especially since we don’t know the exact nature of the investigation. It could be price gouging, it could be something else. It’s worrisome to the whole community.

• Amazon is requiring sellers to update/add/fix listings in luggage and other categories regarding number of attributes on the listing, and additional safety and compliance information (which often requires research). Fixing the catalog is an ongoing obsession for Amazon and we get it, really we do, but NOW? In the middle of a pandemic, we have to review all our listings in particular categories and fix them? Did Amazon think we didn’t have enough to do in our free time?

• Suspended Merch by Amazon, Amazon’s print on demand products. A lot of t-shirt designers are really unhappy right now.

I think that’s it. Whew! Most of this was in the last two weeks. Is it any wonder sellers are stressed right now?

I’m From the Government and I’m Here to Help

Whatever kind of job you think the federal, state or local governments are doing right now, most of them are trying to help. For sellers, there’s good news (yes, from the government!!!!) that should give you hope.

SBA Economic Injury Disaster Loan – this came from the March 5 bill. You can apply for economic relief right now, and they will send you $10,000 in the next three business days even if they ultimately reject your loan request. This is free money for business owners (aka a grant) who have suffered a 15% or greater economic downturn because of COVID-19. Do it. Do it now. Like all things money, it is first-come, first-serve.There’s fine print, but it is pretty straightforward.

Their online system crashed so you have to download forms, sign them and upload them. You can even (gasp!) mail them to the SBA office in Fort Worth.

This money can be used as working capital to pay down debts and for operating costs like buying inventory. If you have collateral, you will likely get a bigger loan. You can get up to $2M. Do you have collateral? Of course, you do! You’re an Amazon seller with tons of inventory! The $10K is quick, but the loan approval process itself is several weeks so get started.

PS. They also have relief for homeowners and renters. You can check it out at the same link if you are having problems on that front.

Payroll Forgiveness Loan – We don’t know yet exactly what this will look like because the bill is in the House right now. Here are more details on the bill that passed the Senate. Things could change, but the idea is that the employer agrees to keep all employees and pay their benefits as usual through June. The money from the loan that is spent on payroll, rent/mortgage, and existing debt is forgivable.   This is a very specific provision designed to keep workers employed and to give businesses time to recover. The bill is expected to pass Friday (today). Keep your eye on this one if you have employees (you do pay yourself, right? You’re an employer).

There is also a tax credit in the bill for distressed or closed businesses. The credit covers 50% of payroll on the first $10K of compensation, including health benefits, for each employee.

I’m so hopeful about this one that it’s painful. Even though it only applies to my US employees, this will help A LOT. Payroll is my biggest expense as a service business. I won’t believe it until the money is in hand, but it sure sounds good.

Small Business Resource Center: COVID-19 Crisis – this non-profit helps small business owners nationwide and has a number of resources on its site. Their free webinars are good. I attended one today that talked about the new bill as well as the SBA Disaster Loan. 

If you didn’t already know, for example, American Express is offering working capital assistance, waiving interest and late fees, and allowing its members to defer payments (with no penalty) for two billing periods. You can find other helpful information like this at the site. 

Facebook has a $100M Small Business Grant Program, too. 

The bottom line is if you are hurting and/or hungry or worried about your employees, there are resources to help you. Intellectually we all know this is temporary. The crisis will end. Amazon is positioned to be stronger than ever. We will be able to sell again. The question is when and how do we make it until then? 

I hope these resources are helpful to you.

Other Amazon News You Might Have Missed

What’s Happening at eGP?

Like everyone, we are trying to roll with the punches that COVID-19 and Amazon are bringing our way. I wrote about our crisis plan a few weeks ago and boy are we glad we had it because this has been a hell of a ride so far.

I’m happy to report that our workers are safely working from home and no one has gotten sick so far. Nor have any of our clients (that we know of) which is also a great relief.

We are working hard to help our clients meet the new challenges from Amazon, keep their accounts clean, and prepare for the day when they can send in inventory again. Our retainer service saved our clients tens of thousands of dollars of reinstatement and project fees in March. Issues that we handled ran the gamut from GS1 UPC codes, bundles, A+ pages and getting unauthorized and counterfeit sellers off our clients’ listings. We got some of our clients classified as “essential” and helped others explain to Amazon that their products were NOT masks, sanitizer or disinfectants. We continued to help with Intellectual Property issues, and we made sure that our grandfathered clients passed verification.

All this is to say, we have the manpower and expertise to handle a wide range of seller problems, and we are constantly learning from the (nearly) daily Amazon surprises. We will do what it takes to keep our clients in the game.

We’ve added crisis planning and beefed up our verification offerings to include account set up and brand registry for brands entering new markets. If you have suggestions for how we can better help the seller community, I’d love to hear them. Please join us on our Facebook Group or ask questions on our Facebook page.

As a new feature, I will be hosting a FB live a business day or two after my blogs come out to answer questions.  We will announce the dates and times in our Facebook group, so join us and stay tuned!

Thanks for reading all the way to the end. This was a lot of information. I look forward to talking to all of you soon and I pray for your continued health and courage during a really crappy situation. Sellers are among the toughest and most resilient people I know, and I’ve been inspired by the courage and resolve I’ve seen in the community. In all my years in business, I’ve never worked with such a tight-knit, smart and connected group of people.

The sheer guts, generosity, and compassion I’ve seen in the past few weeks make me so proud to be one of you.

I’m as scared as anybody about this virus, but I also feel hopeful and stronger because of you guys. We may be bitchers, but we are not whiners. We’re fighters. We are on the front lines in this fight to bring the economy back. Politicians pay a lot of lip service to “small business owners,” but they don’t know anything about us. They have no idea how powerful we really are.

Amazon would fall to its knees without us. But we aren’t going to let that happen. Our families, friends, employees, suppliers, and manufacturers depend on us. We won’t let them down.