The New York Times reports that Amazon - hoping to be able to keep its reputation as the "Everything Store," but recognizing that the spread of the coronavirus and its imp[act on factories in China - has begun "making larger and more frequent orders of Chinese-made products that had already been shipped to the United States, according to company emails and consultants who work with major brands. Some of its suppliers have cut back on advertising and promotions on the site so they don’t run out of products too quickly.
"Amazon also sent an urgent email to brands on Wednesday about Prime Day, its midsummer mega sale, indicating that it has begun worrying about inventory for the event. And the company has contacted some of its third-party merchants, whose dog leashes, crayons and other products account for about 60 percent of its sales, to figure out how their flow of goods might be impeded."
Amazon's reliance on Chinese manufacturing, the Times suggests, has turned the online retailer "into a case study of how a giant retailer grapples with the fallout from the coronavirus and what may lie ahead for other stores … Amazon is likely to feel potential shortages of goods earlier than its American peers because it usually keeps fewer items on hand than they do. In good times, that lets the internet company run more efficiently because it does not tie up money to buy and store products that are waiting to be sold.
You can read more about it here.
- KC's View:
Maybe this is overly simplistic, but couldn't Amazon simply postpone Prime Day if its supply chain is too severely affected. There's got to be a way that simple transparency - you know, treating people like adults - could turn this potential problem into an opportunity.
If I got an email from Amazon saying that the continued impact of the coronavirus meant that it is urging it factories and suppliers to put the health of their people first, and that when things get better, it'll do a better-than-ever Prime Day, I'd respect Amazon. I'm sure that sales and profits would take a hit, but maybe being a responsible citizen ought to count for something.