Reuters reports that Amazon is considering postponing its summer Prime Day event until at least August, according to internal meeting notes seen by the news service.
Also, apparently the meeting notes reveal that Amazon “…expects a potential $100-million hit from devices it may have to sell at a discount,” which includes the popular voice-controlled Echo speaker line and other Alexa-powered devices.
Launched in 2015, Prime Day has become an important shopping day on the online commerce platform, and last year Amazon said it sold over 175 million items throughout the two-day event.
In 2019, top-selling Amazon deals worldwide included the Echo Dot, Fire TV Stick with Alexa Voice Remote, and Fire TV Stick 4K with Alexa Voice Remote.
Impact on Third-Party Merchants
For many third-party merchants selling products on the Amazon platform, the annual Prime Day event has become a mix of a “Christmas in July” summer boost and inventory clearance sale to get ready for the holiday season.
For marketplace merchants that use Prime Day to clear out inventory, the postponement will be less of a factor.
However, for marketplace merchants that ramp up inventory for the sale, the impact depends on their supply chain. Usually, those merchants would ramp up shipments for the annual July event right about now, especially if the inventory was coming from China.
But with China’s manufacturing disrupted and transcontinental shipping lanes thrown into chaos due to the coronavirus (COVID-19) outbreak, some merchants may have written off the event earlier in the year. There was too much uncertainty when production and shipments could return to “normal.”
Others may participate after all if their supply chain is operational and if Amazon would confirm Prime Day has been postponed to a later date.
But that may be difficult for the company to do as the coronavirus (COVID-19) situation in North America and most of Europe makes it very difficult to forecast operational and economic conditions.
Usually, Amazon doesn’t announce the exact Prime Day date(s) until a few weeks prior, but generally, it takes place around the second week in July.
Third-party merchants get an “early warning” to have inventory in warehouses by a specific date if they wish to participate in promotional activities such as Lightning Deals.
At this moment, Amazon isn’t even accepting products from most categories as it focuses on the primary health and household goods buyers are looking for.
Originally, Amazon announced to sellers it would resume inbound shipments of non-critical items after April 5. However, as of today, it seems the marketplace is still out of most high-demand household products, suggesting the company is still struggling to catch up.
In the March 17 announcement to sellers, Amazon gave itself room to extend that date.
Could Amazon Cancel Prime Day?
The Reuters story doesn’t mention that possibility, and it would seem it is in Amazon’s best interest to hold the summer sale. But it is challenging to forecast much into the summer period as the coronavirus (COVID-19) health emergency is still in a relatively early stage in North America and Europe.
With the global economy in tethers, discretionary spending at a virtual standstill, there could come the point it is smarter to focus on the holiday season when consumers have a better handle on their finances.
The crystal ball is cloudy at the moment. Many small businesses are worrying more about making payroll next week versus what they will sell in three months from now. They must first be able to keep the doors open for that to matter.
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