What Should Ecommerce Do Now? Or How to Keep Customers During a COVID-19 Marketplace
First, let’s hit the most popular question that eFulfillment Service is getting from our clients, online retailers:
Can COVID-19, a coronavirus, live on packages? Are shipping containers from Wuhan China, and other affected areas, dangerous to the order fulfillment employees handling those packages? Are products manufactured and shipped to consumers a risk?
Is it possible that COVID-19, a coronavirus, could infect an ecommerce receiving department through, for example, Chinese-manufactured goods containers? In short, no.
The CDC has provided some guidance on that:
“In general, because of poor survivability of these coronaviruses on surfaces, there is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures.
Coronaviruses are generally thought to be spread most often by respiratory droplets. Currently there is no evidence to support transmission of COVID-19 associated with imported goods and there have not been any cases of COVID-19 in the United States associated with imported goods.”
Now that we have that issue tackled, let’s talk about how the pandemic may already be affecting your ecommerce business:
The pandemic created by COVID-19 may be causing manufacturing and ecommerce fulfillment issues:
- Manufacturing in China has slowed or stopped.
- Products already manufactured may be waiting to be shipped, but shipping has slowed or stopped.
- Manufacturing in other locations may be waiting on raw materials coming out of China, Italy or other affected areas, where shipments have been slowed or stopped.
- Travel bans may prevent you from managing overseas production, or from being able to inspect new sources.
- Shortages of materials and products may make current ecommerce inventories more expensive as businesses capitalize on the opportunities, or competitors may be starting bidding wars.
- Online retailers and unprepared fulfillment centers may be experiencing labor issues, when staff are quarantined or ill.
If you’ve been affected by the trade tariffs, you may have already found alternative sources for Chinese manufacturers. If you haven’t, eFulfillment Service is certain that you have that on your to-do list, but what do you do now that you’re facing inventory shortages, how do you fulfill your ecommerce orders?
- Prioritize your sales channels, by asking where are your most profitable and loyal customers? You’ll want to protect your customer base for the future, when supply chain issues level out and your ability to ship orders is normalized.
- Fulfill Amazon orders first, only if it is your most profitable ecommerce channel. Stock-outs will negatively affect your IPI, inventory performance index, on Amazon. Out-of-stocks also mean Amazon’s algorithm won’t show your products in searches and you may eventually be treated as if your item is new, without any history of sales success, if you’re out of stock for longer than 30 days. (Note: Amazon has asked all sellers to refrain from sending stock to Amazon, unless the items are (sold out) household staples that have recently been so popular that Amazon needs time and man power to restock those items first. With this mandate, penalties for out-of-stock inventory may be relaxed.)
- Develop backorder processes and incentives to keep orders until you can re-stock.
- Get your IT team to organize equipment, tools, and processes for working at home. Make sure you can access your order management system from anywhere.
- Use your networks to vet in-country experts you can trust. Look for people with long-term relationships with other reliable ecommerce professionals, or those that have worked with internet retailers like you.
- Diversify your order fulfillment and inventory practices. As the virus develops, you may want to move some of your inventory and order fulfillment work to areas that are not as affected by COVID-19. In some urban areas, where population density makes social distancing more difficult, the workforce may be harder hit by the virus than others. Shipping ecommerce inventory in and out of regions most affected by COVID-19 may be slowed. If your fulfillment center is located inside one of these areas, look for alternative fulfillment partners to blunt potential order fulfillment disruptions.
- Work with a vigilant third-party logistics (3PL) company or fulfillment center. Look for ecommerce fulfillment companies who have taken the flu season seriously, because those fulfillment companies will already have sanitation and labor policies in place to prevent contagious diseases from slowing order fulfillment. It’s important for your ecommerce fulfillment partner to have steady labor practices that will allow them to ship without interruption.
If you’ve been using Fulfillment By Amazon (FBA), you’re affected by the recent announcement that Amazon is deferring receipt of shipments for non-essential inventory for at least three weeks. Here are some strategies to help your business react:
If you’re shipping inventory directly from your manufacturer to Amazon, you might need to store your inventory somewhere other than the manufacturer. Fulfillment centers outside urban areas will have less expensive real estate and therefore, less expensive storage rates. Choose an ecommerce fulfillment partner with a strong FBA Prep practice, so that they can promptly get your inventory to Amazon when its receiving opens up again.
If you’re going to experience out-of-stock SKUs with Amazon FBA, you can still ship from a 3PL. Adjust those descriptions to indicate that the seller will be shipping those products to maintain your order flow. With social distancing, consumers are going to be shopping for entertainment and necessity.
If you’re not experiencing out-of-stock SKUs with Amazon FBA, you should analyze your overall inventory for weakness. Anticipate future irregularities from Amazon, and develop other channels and order fulfillment strategies to temper any upcoming challenges.
Develop a conversation with your best customers.
- Put repeat customers first in line to receive orders, to protect your base for later, after the crisis ends.
- Communicate delays and shortages to customers swiftly and up front. Anticipate your inventory issues and communicate backorder plans in your product descriptions.
- Don’t price gouge. It doesn’t help you find loyal customers, and Amazon will punish you for it.
With all the challenges pandemics stir up, for the coronavirus, COVID-19, there may be a few upsides to the situation:
- Consumers may increase online shopping for the convenience of at home delivery in quarantine conditions, and as an alternative to outside-the-home entertainment.
- Businesses will become more resilient and have additional vetted partners and suppliers, providing more competitive prices moving forward.
- Increased sanitary practices will encourage better health through ensuing cold and flu seasons.
As our changing landscape evolves, eFulfillment Service will provide our newsletter subscribers with expert advice from our fulfillment experts and partner sources. Subscribe to our newsletter, Fulfilling Your Dreams, free.
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