Amazon Prime Day may be in jeopardy as Amazon sellers who are gearing up for Prime Day are currently facing a supply chain issue.
After Prime Day in 2020, which was very challenging for the sellers due to the pandemic, it seems like this year, the sellers won't have it easier.
Amazon Prime Day Supply Chain Problem
Amazon's two-day discount event will start on June 21. It is coming as the retail industry is dealing with the wider supply chain issues that are making it more challenging to stock stores and distribution centers and keep up with consumer demand.
Several issues are now hitting the businesses. The global supply chain is still feeling the effects of the pandemic, which forced numerous 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, together with materials like plastics and semiconductors. Labor shortages have caused backlogs throughout the system.
A COVID-19 outbreak in Guangdong, a province in China, has compounded the problem. The local officials have introduced restrictions, such as limits on vessel entry, to limit the spread of the virus.
That means that one of the busiest ports in the world, the Yantian International Container Terminal in Shenzen, has decreased capacity.
The Amazon sellers who import their products from China are now on edge due to the global shipping problem. A lot of businesses have stocked up on as much inventory as they could months before Prime Day.
Jonathan Gold, the vice president of supply chain and customs policy for the National Retail Federation, stated that these issues are adding increased time and cost to the global supply chain.
The NRF's Petition
Across the National Retail Federation or NRF's 16,000 members, more than two-thirds of members said that they had been forced to add two or three weeks to their supply chains, the NRF wrote in a recent letter to President Biden calling for action on the port challenges.
All of the NRF members reported to the group that their costs had increased as a result of the disruptions.
Since the consumer demand remains high and the inventory supply is limited, items could run out faster.
Freightos surveyed 177 small and medium-sized businesses that sell on Amazon, and they found out that just over 75% of them continue to experience supply chain disruptions.
Almost half of the respondents said they expect inventory shortages on Amazon Prime Day due to freight delays.
Millions of small and medium-sized businesses get their items on Amazon's third-party marketplace. This accounts for more than half of Amazon's e-commerce sales, and it has helped it bring in millions worth of revenue.
An Amazon spokesperson told CNBC in a statement that Amazon Prime Day 2021 will feature more deals than last year. There will be more than 1 million deals from small and medium-sized businesses around the world, indicating more sellers willing to participate in the even this time.
Also, more than 2.5 million consumers used a pre-Prime Day promotion to buy items from small businesses within the first 24 hours of the offer going live. Amazon did not reveal how many merchants participated in the promotion.
This article is owned by Tech Times
Written by Sophie Webster