How COVID-19 Has Affected the Amazon Marketplace

How COVID-19 Has Affected the Amazon Marketplace

The different areas of impact that COVID-19 has hit have been shown through and through. In terms of market intrigue, investors have slowed their roll to prevent over-extension of finances. Buyers and sellers are both impacted by this market shift, placing limits on each category of individual. The Amazon marketplace represents one of the largest buying and selling ports across the globe. The market is impacted on an international level, with investors, sellers, and buyers coming from all corners of the globe. Below is a detailed reaction of how the marketplace has been affected by the virus, detailing points that impact all levels of interaction.

Supply and Sell-Out

Amazon works to create their supply chain through their connections to different markets. One of the largest markets that Amazon works through is created through a supply chain that routes through China. Since this region has been deemed the epicenter for a virus outbreak, the supply chain has become broken at a few links. One of the biggest links in the supply and demand curve. The supply has run dry amid the high demands for crucial products. The categories of everyday essentials, self-care products, and household items are running low. Companies cannot keep up with the demand due to the limitations placed on workforce interactions. The development of goods has started to slow, which is why most companies are reaching their ‘sell-out’ breakpoints.

To avoid the idea of marking companies with the ‘sold out’ distinction, Amazon has started to expand their resources and seek involvement from deeper companies. Just like the president has called for production companies to adapt to changes, so has Amazon. Their investors are working to adapt to new categories of selling, filling product needs within categories that they might not be accustomed to. Amazon has also implemented new facilitation that has allowed its factories and shipping agencies to remain intact. To dispel the idea of the sell-out, Amazon has faced hard times by advancing areas that will keep their market share healthy during this time of uncertainty.

Relating to Buyers and Sellers

With stay-at-home orders firmly in place, many retailers have shifted efforts to the online space. With many of the world’s major retailers competing within this space, healthy competition has called for new approaches. This is a sign of promise for Amazon, considering that most of their servicing is driven through online sales. The company has partnered with some of these large retailers, helping to fill the void of demand and increase the revenue for all companies that are impacted by this pandemic. The company has started to take more web design techniques, preparing the marketplace to take on the increase in sales that continue to be tracked. The longer this pandemic goes on for, the better the bottom line for Amazon. Online purchases have quickly become an essential region for purchase, marking Amazon as an essential company. This is a good sign for sellers as it opens  doors to sales opportunities without pouring millions into advertisements and marketing efforts. This period in time remains a seller’s market.

What about the tendencies of the buyer? The buyer is adapting to this new-found approach by exploring new options of risk. Big business is finding that leaps of faith go a long way to make or break their companies. The buyer that has invested funds to play with is experiencing a market high unlike any other. Expandable income is going a long way to solidifying their place within this market, funding projects and small start-up investments that are paying their dividends.

The longer people spend their time indoors, the higher correlation to online sales results. Take Italy for example. This region was forecast for record lows in the early portion of the year. Sales are often soft for this period or quarter, as it represents a period when people have already expended their usable income from the fourth quarter. Second-quarter sales for this region are reaching levels higher than ever before in terms of Amazon sales. The increase leaves some speculation on the stay-at-home orders placing a positive effect on sales increases. More data will continue to be gathered, but we would be hard-pressed to assume that this would not be the same case for international and worldwide trends. If Amazon can keep pace with the demand, they will see quarterly sales that continue to rise above levels of years past, smashing the records for online sales and their online marketplace.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.