With pending deliveries clogging supply chains, the world’s largest online retailer, Amazon, plays for time by imposing restrictions on non-essentials. But at the same time, Jeff Bezos has been enriched by $ 30 billion.
The pandemic has led the world’s richest man Jeff Bezos to become the first trillionaire.
After struggling to cope with unprecedented demand since the start of the coronavirus pandemic, Amazon is monitoring shopping carts at checkout in an attempt to control volumes. The prices of most products on the site have skyrocketed in the past two months. This left many customers furious, including those with $ 112 a year PRIME memberships.
However, Jeff Bezos has ignored criticism of this. CNBC quoted him saying: “If you are a shareholder in Amazon, you may want to take a seat because we don’t think small.” Bezos revealed that Amazon has invested more than six hundred million dollars ($ 600 million) in costs related to Covid-19 in the first quarter of 2020, while the profits of the first quarter decreased by 29 percent. Additionally, the e-commerce giant expects these costs to grow to $ 4 billion or more in the second quarter.
How Amazon tried to get buyers to buy less so they could catch their breath. The | Newsline | DODO
But Amazon officials have kept their lips shut on the steps he took to control delays and also the definition by which he defined the essentials and placed restrictions on products.
Jeff Bezos’ flip-flop policy is criticized
On the other hand, sellers are disappointed that Amazon will not allow inventory at Fulfilled By Amazon (FBA) storage centers. This is causing a stir because Amazon’s electronics are classified as essential and shipped as before.
Therefore, a Kindle could go through the gatekeeper while all other deliveries have been put on the waiting list.
The company’s definition of what constitutes essentials, and the computer algorithms that differentiate products, have come under fire from vendors across all product categories, some of whom have been using the service for years. The fact that headbands are used to make masks shows how much buyer behavior has changed in recent months. By the way, Amazon has considered them non-essential!
High-margin items like TRX bands, on the other hand, which can hardly be called essential items, do not face such restrictions. Critics say Amazon Seller Support insists the limits on nonessential items are being revised, but there is no hope that things will change anytime soon.
Struggling to stay afloat
In defense of Amazon, the company’s supply chains have been hit by increasing order bookings and employees protesting against poor security measures at some of its sites. Some workers have taken unpaid time off, under a new policy announced in March, to isolate themselves or avoid exposing themselves to the disease. The company has now announced that it is revoking the policy with immediate effect. In these circumstances, the temporary slowdown in demand may be the only way out for the company.
The website’s home page looks pretty bleak with regular coupon ads and erased specials. Product recommendation widgets have also been disabled and international shoppers have been asked to visit their respective national Amazon portals for faster delivery. Amazon’s ads on Google, a major source of revenue for the latter, have disappeared almost overnight, another tactic to slow traffic to the site. That’s not all, affiliate commissions have been reduced by up to 80%. The popular Mother’s Day promotions were nowhere to be seen. Unconfirmed reports say the company has postponed the highest-grossing annual event until August.
The company says the inbound inventory ban is gradually being lifted, even as it works overtime to expand its network of 500 warehouses across the United States. Amazon is trying to put out several fires at once, so to speak. According to reports, at least 4 employees died from COVID-19-related complications, while national infection figures are kept secret. Since March, the company has hired 175,000 workers to improve shipping times, which in some cases has increased to more than 30 days. Last-mile delivery issues have contributed to Amazon’s concerns.
Other than that, it has also had to stop delivering in countries like India, where the government has banned sales of non-essential items until further notice. Perhaps for the first time in the company’s 26-year history, Amazon suggests that sellers make their own shipping arrangements to avoid delays on the FBA network. The bigger companies are taking advice and have started shipping their own products. However, the little ones who lack the resources to do this have remained tall and dry. With sales falling more than 30% in some cases, many sellers can close their business unless alternatives are found.
Business recovery plans launched
With the current stagnation on Amazon, customers are now looking for another place to meet their needs. Sales at Walmart.com have been growing steadily and the company has now launched a delivery app of its own. It hired more than 150,000 workers ahead of schedule and offers customers guaranteed deliveries in less than 2 hours for an additional $ 10. Since then, Amazon has assembled a team of executives to find ways to restore deliveries to pre-pandemic levels.
However, it will probably be a while before things go back to normal again. According to the Wall street journal, company reps did not compromise on how long it would be before delivery bottlenecks were finally resolved. New fulfillment centers have been announced in California, Georgia, and Maryland, while it is also adding space in North Carolina, along with a new headquarters in Virginia.
Amazon has reached an agreement with California-based regional airline Sun Country to use 10 of the latter’s Boeing-737 aircraft to transport packages across the country.
Industry watchers say it’s only a matter of time before Amazon expands operations significantly, allowing it to once again regain its position as the world’s leading e-commerce player. Customers have little choice but to wait until Amazon tidies up their home.