6 Ways to Prepare your Amazon eCommerce Business for Coronavirus Implications

We'd like to share with Amazon sellers around the world a few crisis preparation tactics to make sure your e-commerce business can recover if you experience supply chain disruptions.

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At Lab 916, we’re wishing afflicted populations, our clients, and international business partners a safe and speedy resolution to the public health crisis.

With cities on lockdown, borders on high alert, and millions of people self-quarantined or restricted from traveling, even the largest corporations are feeling the impact of the Coronavirus outbreak on their margins.

We understand that running a small business is inherently precarious. In addition to prioritizing your obligations to keep your employees safe, you also need to come up with a continuity strategy to protect your operations. 

We’d like to share with Amazon sellers around the world a few crisis preparation tactics to make sure your e-commerce business can recover if you experience supply chain disruptions.

Just like any disaster plan, your business crisis management plan should include details on the exact next steps to take if anything goes wrong.

Here are some actionable insights our optimization experts recommend you consider to protect your eCommerce business and a rundown on opportunities we’ve identified to help you get ahead of issues before they become irreversible crises.

coronavirus continuity plan for amazon businesses

Retail Sales Increase As More People are Shopping Online

As populations around the globe move toward social distancing as a strategy to avoid possibly contracting the Coronavirus, everyday activities or errands like grocery shopping, eating out, and so on, are being fulfilled through online platforms.
Experts have observed that new trends in consumer behavior indicate a large uptick in eCommerce. 

Large corporations, like Target and Amazon, have experienced success with customers taking advantage of 2-day or same-day shipping. Meanwhile, small brick-and-mortar businesses like restaurants have experienced a decline as online food ordering platforms become a matter of necessity.

Follow the steps below to ensure your business can keep operating during a time when audiences are online more than ever.

1. Keep Inventory Levels in Check

Since Amazon hasn’t yet announced changes to policies regarding FBA inventory or how an out of stock item can affect your Inventory Performance Index, running out of stock for more than 30 days can erase a product’s sales history, spelling disaster for your Amazon seller account health.

First thing’s first, take inventory of which items are selling fast and which items you expect you’ll need to order in the next 3 months. You’ll need to prepare an FBA shipment to replenish your inventory if it’s running low to avoid product shortages.

As always, think about what you’re getting into if you overstock your FBA inventory. Familiarize yourself again with the FBA fees that you’ll be subject to for storage during peak and off-peak seasons, then calculate if it’s profitable for you.

Keep Customers Informed

At a time when self-preservation seems paramount, don’t forget that all of your stakeholders also need to be reassured. 

Consistently updating your buyers with the status of their order is a simple way to nip complaints about delays or cancellations in the bud.

2. Communicate with Your Suppliers

How well you prepare to deal with a crisis affects each and every one of your stakeholders. With that in mind, it’s crucial that you maintain a positive, communicative, and productive relationship with your domestic and international suppliers.

Speak with your manufacturer about any foreseeable changes to their sourcing and supply chains:

  • Are their staff experiencing travel restrictions and not able to come to work? 
  • Do they have policies in place that ensure you will receive quality products? 
  • Will there be any abnormal delays in ordering or receiving products?

Asking some of the questions listed above will provide insight into how aggressive your strategy will need to be to execute the following steps.

3. Place Your Orders Early

The coronavirus outbreak has put a strain on global trade, doubling down on the complications of recent tariffs on imported items from China

On our end, we’ve advised our clients to take precautions to prepare themselves for the possible implications of the Coronavirus pandemic on the global economy and business supply chains.

Typically we advise sellers to prepare for Q4 by placing orders with manufacturers in Q2. This is especially pertinent advice to follow now to minimize out-of-stock exposure.

It’d be in your best interest to place your orders sooner than later if your supplier can assure you that their quality and consistency remain unchanged.

4. Diversify or Change Suppliers

If your supplier has had to stop manufacturing products due to government regulations or travel restrictions, you may want to consider researching alternative manufacturers located outside of Coronavirus outbreak hotspots.

One way of mitigating risk for your business is by diversifying your supply base. If you can source locally for the next few months until your brand partners get back into the groove, that will set you up for success in the future.

Changing suppliers is an extremely major change for business operations and is not a decision to be made in haste. Conduct all of your audits and review all contracts before employing this strategy.

5. Rethink Your Ad Strategy

At Lab 916, we’re taking the initiative to restructure ads that may hurt our clients’ account health. 

Ensure that your ad management strategies are selling inventory that can be fulfilled. Nicole Perrin from eMarketer eloquently explains the benefit and challenge of selling on Amazon:

“The click frenzy is likely to bring in more paid search dollars, but as supply chain issues mount, third-party sellers are looking for ways to limit the impact, including by reducing their ad spending… You can’t just ‘set and forget’ a campaign if you risk running out of stock or if your pricing isn’t competitive enough to convince shoppers to convert…”

If you feel that your aggressive campaigns will provoke too much exposure, consider restructuring your ads until your production plans and cash flow are nailed down. It may also be helpful at this time to reduce ad spend on channels that have high acquisition costs.

Just Remember to Play Fair

If you’re reading this blog, odds are you’re a savvy enough business person to know that usually when demand goes up, supply goes down, and prices go up. This is true, and in some cases, it is a smart move to increase your product prices.

However, increasing prices to the point of price gouging during a state of emergency is totally unethical and 100% illegal. We strongly advise against it. Not only because it’s wrong, but also because Amazon has been quick to ban sellers whose listings are unfairly priced.

Instead, consider if holding inventory, giving out fewer discounts, or fairly matching prices for premium high-quality products/bundles is right for you.

6. Optimize Your Listings

Once you’re sure that your inventory is stable, it’s time to go on the offensive. Beyond production and sales, Amazon sellers and e-commerce business owners should be proactive about adjusting their marketing strategies.

For example, now could be a good or bad time to release new products, depending on the category. If you were planning on launching an outdoor product in time for summer, potential buyers may not be as responsive to it at this time. It may be best to instead channel the allotted marketing budget into investing in strategies that support logistics or optimization efforts.

As traffic increases on Amazon, you’ll likely need to update your keyword strategy to make sure you rank for relevant keyword phrases. For many of our health-related clients, we conducted additional keyword research to incorporate trending phrases into long-tail phrases that typically do well during the summer seasonal shift.

Additionally, if you’re launching a new product in a niche that trending search data implies would do well, having professional product photography and infographic images created can greatly boost visibility and conversion rate.

If you’re looking to have a professional copywriter or designer to take on your project, you can share our Ultimate Guide to Amazon Listing Optimization with them or contact our team of Amazon optimization experts at Lab 916 for a consultation.

The Takeaway

Ensuring you have the systems in place to flourish while enabling customer accessibility can support the relationships you build.

To do so, keep in mind that the first thing you’ll want to consider is your inventory position. Check-in with your suppliers, then consider if your ad and marketing strategies will set you up for success. After that, do your best to be proactive in your sales strategies by optimizing your listings so you can forecast revenue and maintain cash flow.

At Lab 916, our job is to help your eCommerce business weather the storm. Though the impact of the Coronavirus may seem intimidating, and the operating challenges seem impossible to navigate, the truth of the matter is that there’s a need that only online and crisis-ready businesses can fulfill.

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