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Amazon prioritizing essentials, medical goods in virus response

Employees sort and move packages at an Amazon fulfillment center in Grapevine, Texas, on December 5, 2018. (Shaban Athuman/Dallas Morning News/TNS) Inc. is prioritizing the stocking of household staples and medical supplies as it struggles to deal with a surge in demand for online orders from customers avoiding stores during the coronavirus pandemic.

The world’s biggest online retailer said in a blog post updated on Tuesday morning that it was making the move “so we can more quickly receive, restock, and ship these products to customers.” The aim is to keep warehouses stocked with the items people are buying now — toilet paper, bleach and sanitizing wipes — so Amazon is temporarily not accepting shipments of nonessential goods like flat-screen televisions and toys.

The Seattle-based company wants to be perceived as an indispensable service, which is hard to do when items are out of stock and customers have to wait days for orders to be delivered. The company is fine-tuning its operation to quickly deliver things people need right now, sacrificing sales from its deep inventory for the time being.

As online orders spike, Amazon also is looking to hire 100,000 people willing to pick, pack and deliver orders as a pandemic rages. Already, at least five workers at warehouses in Spain and Italy have contracted the coronavirus, and those numbers could rise in the coming months as the disease spreads in Europe and the U.S. If enough workers get sick, Amazon could be forced to close some of its fulfillment centers, potentially putting its vaunted delivery machine in peril.

In the meantime, Amazon is telling third-party sellers that it won’t accept shipments from them in other product categories through at least April 5. Amazon said it was taking a similar approach with the big brands it buys directly from.

“We understand this is a change for our selling partners and appreciate their understanding as we temporarily prioritize these products for customers,” an Amazon spokesman said in an emailed statement. Products already on their way to Amazon warehouses will be accepted, he said.

The new prioritization applies to restocking, not Amazon’s shipments of items already sitting on warehouse shelves.

The change only limits products sold through Fulfillment by Amazon, a service through which online merchants pay Amazon to store, pack and ship their products sold on the site. Amazon’s marketplace merchants can continue to sell nonessential products, but they have to manage packing and shipping to customers on their own.

“There are going to be sellers who get hit hard, like people who have no way to ship outside of Fulfillment by Amazon,” said Will Tjernlund, an e-commerce consultant in Minneapolis who helps 30 brands sell on Amazon. “But it shouldn’t be the end of the world for too many people since there appears to be an end in sight.”


© 2020 Bloomberg News

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