Supply chain snafus could affect what’s available to you on Amazon Prime Day
Annie Palmer
KEY POINTS
Sellers are grappling with widespread supply chain disruptions just as they gear up for Prime Day, which kicks off on Monday.
Businesses are being hit hard by global shortages of shipping containers and semiconductors.
Some sellers are worried they may run out of stock during the big summer sale.
Amazon sellers who had hoped for an easier Prime Day after 2020′s pandemic-driven chaos aren’t likely to catch a break this year.
The company’s two-day discount bonanza kicks off on Monday. It’s coming as the retail industry is grappling with widespread supply chain issues that are making it more challenging to stock stores and distribution centers and keep up with consumer demand.
Several cascading issues are hitting businesses at once. The global supply chain is still feeling the ripple effects of the Covid-19 pandemic, which forced many factories to shut down temporarily amid worsening outbreaks of the virus. Supply chains have been further disrupted by shortages of shipping containers and air freight capacity, along with materials like semiconductors and plastics. Labor shortages have caused major backlogs throughout the system.
A Covid-19 outbreak in the southern Chinese province of Guangdong has compounded the problem. Local officials have introduced restrictions, such as limits on vessel entry, to limit the spread of the virus. That means one of the world’s busiest ports, the Yantian International Container Terminal in Shenzen, has shrunk in available capacity.
Small- and medium-sized Amazon sellers who import their products from China are on edge as a result of global shipping snafus. Many businesses stocked up on as much inventory as they could months ahead of Prime Day…
… Rick Watson, CEO of e-commerce consulting firm RMW Commerce Consulting, said all of his clients, which range across the furniture, fashion, home and food and beverage categories, are experiencing supply chain disruptions but that they’re still planning to participate in Prime Day.
Watson said larger sellers could benefit more during this year’s Prime Day because they’re in a better position to secure top ad placement, such as “Lightning Deals,” which are limited-time offers that are often featured prominently on Amazon’s homepage. These ad placements are typically secured months in advance and require sellers to provide Amazon with the inventory levels for the promoted product, he added.
“If you’re going to get certain advertising, they want to know what inventory is behind it,” Watson said. “It could advantage larger sellers this Prime Day, because it’s more likely that they have the financial flexibility to make those commitments this year.”
Read the entire article at CNBC.