Velocity Sellers, Inc

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Amazon FBA Sellers, Here’s How to Prepare for a COVID19 Fall
August 13, 2020

It’s no secret that the COVID19 pandemic has changed the game for retail, especially those on the Amazon platform. At the peak of the virus response, Amazon’s FBA (fulfilled by Amazon) and Amazon Vendor Central program screeched to a halt [except what they deemed essential], impacting millions of businesses.

In a few short months, the peak fall/winter season will begin, so our experts at Velocity Sellers came together to provide a few important tips for planning your inventory management to reduce potential challenges. 

1. STOCK HEAVY INVENTORY ON TOP SELLERS

During the first wave of the pandemic, Amazon closed its warehouses to non-essential businesses, making it impossible to add inventory for all other sellers. When warehouses opened again they were flooded with shipments, creating backups lasting days or weeks. Getting additional inventory into the warehouse early can keep your products in stock through the 4th quarter.

  1. FBA orders are being divided among many warehouses across the country due to the company’s warehouse FC transfer system being overloaded.
  2. Prepare for 60-90 days or more of stock depending on the turn rate of the item. Having that amount of stock also improves your A9 algorithm ranking.
  3. Although you cannot control order volume on Vendor Central, you can use two programs to increase stock. Typically we are leary of accepting bulk buys as they can erode cost pricing long term. However, during this pandemic, if the discount is within range we are suggesting that you accept all bulk buys. 
  4. Another program called “Born to Run” can also be utilized on top-performing asins to build stock since you are guaranteeing sell-through, this should only be an option for top-performing products. This can help when Amazon misses sales spikes due to seasonality. 

    Note: the computer looks at the numbers and places bulk orders. Sometimes you can move faster than the system can see because they don’t have enough sales history to keep track of. With this program, you’re guaranteeing that if they don’t sell they can send them back. They are willing to buy more because you take the risk.

  5. Even if your main channel is Vendor Central we suggest always having a Seller Central account open in case of a vendor shut down. We have seen these shutdowns twice in the last 12 months for different reasons and we expect others can occur. We also feel that vendor central wants to focus on larger businesses with more volume at 5 million per year and above (check this).

2. FOCUS ON YOUR CORE BUSINESS

While the market for products like protective gear, masks, and cleaning supplies has grown, sellers on Amazon will find it challenging to get into these categories. Due to liability issues, Amazon has blocked the sale of COVID19 related goods and created an approval process to validate sellers in these categories. Because of this, it’s best to stick with your core competencies to avoid being stuck with inventory that can’t be sold.

  1. In order to sell these items you will have to get approval in a new category called personal health and safety. In addition, Amazon has created a subcategory called PPE (personal protective equipment).
  2. When a seller tries to create a new listing they will have to fill out a new item creation form letting Amazon know that they want to sell this type of product. Three months into this pandemic we have seen very few approvals coming through. 
  3. At this time Amazon is limiting sales to the brand owners, those who created the initial listing.

3. TAX CONSIDERATIONS FOR 2021

We are anticipating that the final states that Amazon does not collect sales tax for will be on board with Amazon in 2021. In addition, we are thinking about state budgets. If so much of the sales volume has shifted to online, sales income tax could become an issue as states try to cover their losses from brick and mortar. 

income tax

To provide better protection against COVID19 in Amazon’s facilities, the company has changed its shipment methods, reducing transfers between warehouses. This means instead of purchase orders going to just one warehouse, it may go to four. This is just one of the many changes being made that impacts the distribution of products. 

Profiting from your Amazon business requires staying aware of changes, being aware of seasonality, and predicting the right moves to make based on the economic and political environment around us.

COVID19 response will continue likely into the first quarter of 2021 when we expect vaccine availability. If the first three months of this year give us any indication of what’s to come, a second wave, everyone shopping online and carriers get overrun, etc. Prepare for the uncertainty that could impact your business and hedge for those potential challenges.

There can always be pitfalls including stock issues, carrier issues, etc. and sellers need to be prepared.

If you’re not sure how to best plan your inventory going forward, please
schedule a free consultation session here for no-obligation advice from our professional Amazon experts. 

To your success,

Jake

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Peter Sims

Sales Executive & Brand Evangelist

Pete has been on Amazon for 3 years now and is very happy to found a home at Velocity Sellers. In his free time Pete is an avid hiker, runner, and bowler. He also enjoys reading any book he can get his hands on and making some tea to go along with it.

Arlind Hoxha

Creative Manager

As the Creative Manager at Velocity Sellers, Arlind leads with expertise honed over many years in creative agencies. He brings a wealth of experience guiding designers and excelling in ecommerce-focused endeavors. Beyond his professional prowess, Arlind is an avid gamer, seamlessly blending creativity and strategic thinking.

Florence Palahang

Administrative Manager

Holding a BS in Accountancy from Davao City and boasting seven years of experience as a Virtual Assistant, Florence has established herself as a valuable asset. With a background spanning 95 clients worldwide, she has found her niche at Velocity Sellers, focusing on Amazon marketplaces. Beyond work, Florence enjoys reading, crochet, and baking. Her collection of plants adds vibrancy to her mornings, and witnessing her family enjoy the outcomes of her efforts brings contentment to her universe.

Kiley Forche

Treasurer

An MBA graduate specializing in Finance, boasting 11+ years of expertise. Joined Velocity Seller in 2018, contributing to our growth. Outside work, treasures family time, exploring new destinations, and passionately supports Buckeye Football

Miljan Milev

Sr. Project Manager

Seasoned project manager adept in data and e-commerce projects, collaborating globally. Outside work, finds joy in traveling, cherishing moments with family and friends.

Camilla Messmer

Sr. Project Manager

University of Arkansas grad in Supply Chain Management, excelling in eCommerce project management. Enjoys baking, travel, and writing, adding a touch of creativity to every endeavor.

Zach Taylor

Director of Logistics

Zach, a graduate with a Sociology and Environmental Science degree from the University of Montana, has consistently found himself drawn to running businesses and improving business systems, logistics, and operations throughout his professional journey. In his free time, he enjoys cycling, running, and spending quality moments in the mountains with his family.

Chris Prall

Director of Advertising

A former chef turned Geomatics graduate. While studying, he delved into managing PPC campaigns for Amazon agencies and e-commerce clients, uncovering a passion for data-driven strategies. A maestro in crafting successful PPC campaigns, he’s fueled by driving client growth, from startups to 8-figure brands. Beyond work, Chris savors cooking, vinyl collecting, camping, and embracing the great outdoors

Steffanie Morrison

Director of Sales, Sr Marketplace Analyst

Steffanie brings a rich e-commerce background since 2013, selling products and advising brands. An analytical mind with degrees from Northern Illinois University and the University of Hartford, she resides in New Hampshire, relishing family moments, travel, and outdoor adventures like hiking and skiing with her husband and kids.

Eric Peterson

Director of Brand Onboarding

Master’s in marketing, film degree from Minnesota State University-Moorhead. At Velocity Sellers, he crafts brand value, excels in client service, and loves problem-solving. An advocate for animal welfare, he enjoys cooking, classic movies, and time with his dogs.

James Dee

Director of Brand Management

Over 20 years in e-commerce mastery, specializing in Amazon. Proven brand builder and business owner. Outside the office, a proud parent to five, including a Division 1 soccer player. Enjoys family time, the outdoors, and all things soccer.

Lisa Zajdel

Executive Director

Results-Driven Executive Director. With two decades of expertise in merchandising and retail, including a successful tenure as Kohl’s Private Label Buyer & E-commerce Manager, Lisa brings over 14 years of invaluable experience on Amazon. Her dedication to delivering results is unparalleled, ensuring a strategic, seasoned approach to optimizing your business for success.

Andrew Warner

CFO

Andrew Warner, Velocity Sellers’ CFO, occupies a central role in our financial triumph. His sharp fiscal oversight guarantees our operational efficiency, ultimately empowering our team to deliver unparalleled services to a global clientele, consistently setting high standards in the industry.

Jake Schwarzbaum​

CEO

As the Co-Founder and CEO of Velocity Sellers, Jake Schwarzbaum co-launched the company while supporting his father, Nathan, during leukemia treatments. His dedication to helping brands succeed on Amazon, without relying on automated systems, drives Velocity Sellers’ commitment to excellence.

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