Amazon is concentrating on selling and shipping coronavirus-related products like household staples and medical supplies, making sellers of other goods nervous, CNBC reported on Wednesday (March 18).
Sellers are expecting the worst after the company said this week it will prioritize shipments of household staples, medical supplies and other coronavirus-related products over everything else. The change will last through April 5.
Other product categories getting priority treatment include baby, health, household, beauty, personal care, grocery, industrial, scientific and pets.
The decision by the eCommerce giant will be beneficial to people needing toilet paper and disinfectants but will cause duress for sellers of other products who rely on Amazon for sales. A drop in sales is already causing some merchants to lay off workers.
Although retailers can still sell items that aren’t among coronavirus staples, they can’t use Fulfilled by Amazon (FBA), which will affect some 53 percent of sellers, data from JungleScout indicates. The service stores and ships sellers’ inventory. FBA also gives sellers the ability to use two-day Prime shipping.
“We understand this is a change for our selling partners and appreciate their understanding as we temporarily prioritize these products for customers,” an Amazon spokesperson told CNBC.
Amazon told sellers to use a “vacation status” for their businesses in order to safeguard listings’ standing in search results.
The increase in demand for staples and supplies has prompted Amazon to open up 100,000 new full and part-time positions across the U.S. Positions will be in Amazon’s fulfillment centers and delivery network.
“In addition to the 100,000 new roles we’re creating, we want to recognize our employees who are playing an essential role for people at a time when many of the services that might normally be there to support them are closed,” Amazon said in a statement.
The company said it would increase pay by $2 per hour through April. The move will cost Amazon about $350 million in increased compensation for hourly employees across the U.S., Europe, and Canada.
Amazon said it would donate money to help with the crisis and JPMorgan said it will donate $50 million.