Amazon Prime Day May Be a Bust With Fewer Sellers Able To Offer Discounts
At a time when manufacturing and supply chain costs are rising, independent sellers aren’t expecting Amazon Prime Day to be a knockout this year.
Prime Day is scheduled to run from June 21-22, but independent sellers told CNN Business that they can’t offer the same promotions due to fears of not meeting customer demand and not being able to afford the hit to profits while supply chain costs are rising. CNN also noted that third-party sellers make up close to 60% of Amazon’s $236 billion in annual revenue sales.
Typically, promotions are used to increase sales and move large volumes of products, but sellers told CNN that promotions will be limited.
The global supply chain is still recovering from the pandemic, which forced factories to shut down, as well as shortages of shipping containers and air freight capacity and other material shortages such as semiconductors and plastics, CNBC pointed out.
Cargo marketplace Freightos surveyed 177 small- and medium-sized businesses who sell on Amazon. According to the survey, just over 75% continue to experience supply chain disruptions. Almost half of respondents said they’re expecting inventory shortages on Prime Day due to these freight delays.
“Many brands are struggling to keep consistent inventory in stock because of the supply challenges,” mentioned Mike Black, chief marketing officer at e-commerce analytics firm Profitero, reports CNN. “This Prime Day is going to be more curated by what products are in stock and available.”
CNN also noted that Amazon is placing new restrictions on vendors for how much inventory can be stored at the company’s warehouses. Inventory limits impact sellers’ ability to offer discounts.
Many sellers simply can’t afford to offer their customers any promotions this year and there is no incentive to lower prices for Prime Day, reports CNN.
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Last updated: June 21, 2021