Coronavirus News and What it Means for Your E-Commerce Business
• President Trump announced $50 billion in additional small business loans
• Legislation centering on paid sick and leave time, tax relief for employers, and more is pending in Congress
• Concerned consumers are stockpiling items; in response, some price gouging has occurred
• Increased numbers of people are staying home, which is making online shopping the more practical choice
We’re living in interesting times, for sure. And what may have been the situation yesterday may not feel the same today—and life’s routines could change again tomorrow. This is happening, in large part, as the country and our leaders respond to the threats and realities of the coronavirus.
So, what does the current situation mean for e-commerce businesses?
For one thing, increasing numbers of people are self quarantining, beyond those being quarantined for confirmed medical reasons. As to how many people are homebound, no one knows with exact certainty.
More specifically, over 85 percent of those aged 60 and up responded to a survey by saying that they were avoiding malls and other shopping centers—and, while they may be able to put luxury purchases on hold, people of all ages need groceries, prescriptions, personal hygiene items and more.
So, it’s not surprising that people who previously didn’t use online shopping as their primary go-to, are now going to be open to it, even if it means they’ll need to wait longer for delivery. For those already shopping online, there’s a thing called boredom shopping, which can lead to online retail therapy, and goes beyond just buying the necessities. In these instances, your online business could see both spikes in sales and shortages of key items. And while no one knows exactly what lies around the corner, keeping up with the latest developments is the right place to start.
Here are some things happening at the moment.
Low Interest Loan Program
On March 11, President Trump described a proposed relief package for small- to mid-sized businesses that includes:
- A three-month tax holiday, meaning a deferment period for federal tax payments
- $50 billion in low-interest loans through the Small Business Administration (SBA); the president said he would instruct the SBA to provide capital to firms that have been affected by the virus, and ask Congress to increase funding to the SBA by that amount
The House of Representatives just passed a bipartisan bill that, if affirmed by the Senate, would provide relief to families and businesses affected by the virus. This H.R. bill was passed on March 14 and the Senate may vote on it this week. The bill would provide for free coronavirus testing—meaning that private insurance plans must cover the costs. It also means that people without insurance would receive free testing, “waiving cost-sharing with coverage from Medicare, Medicaid, and other federal programs.”
If passed, businesses with fewer than 500 employees would need to provide employees with 14 days of paid sick leave, with pay being at least two thirds of what they’d normally receive. It would also require three months of paid family and medical leave to allow people to seek medical treatment and, if needed, to care for their children, many of whom are no longer attending school or having daycare access.
Currently, medical leave parameters include 12 weeks of protection without additional pay. This new bill would require businesses to pay two thirds of the typical pay for that 12-week period; if passed, this would be in effect for one year.
In turn, employers receive a tax credit when they pay for qualified sick leave or family leave wages through a deduction in Social Security taxes paid for affected employees.
Preventing Stockpiling and Price Gouging
Worried consumers are stockpiling items, ranging from toilet paper to groceries, hand sanitizers, antibacterial cleaning products, bottled water and more. Stockpiling has caused some household staples to become unavailable through Amazon. And if available, delivery times may need extended.
And, as local stores run out of these items, many have been turning to online sources—and in some cases, this has led to price gouging by vendors. For example, Amazon was called out when it was discovered that almost one in every six hand sanitizing products or masks had prices double or more, in February alone, as more and more people were buying them.
These were Amazon’s own products—but gouging has also been taking place through Amazon’s third-party vendors. For example, a package of Lysol disinfecting wipes that normally cost $13.57 was going for $220. Purell hand sanitizer that typically sold for $7.99? Going for $49.95. To address third-party gouging, Amazon stated that tens of thousands of items have been blocked from their platform to ensure that basic need products are not having their prices artificially increased.
In response, the Department of Justice is warning companies and businesses that they plan to enforce antitrust laws for price gouging violations during this outbreak of disease. They also warned against collusion, where competitors work together to charge more for public health products.
Then there are fraudulent products, some even claiming to treat COVID-19(!). To combat that, on Monday, March 9, the Food and Drug Administration and the Federal Trade Commission contacted seven companies over alleged violations.
Mail Carriers Are Open for Business
As of this writing, several primary carriers in the U.S. have stated that they will be continuing operations during this time. All have caveats in place around potential delays and some services not being completely available, but by and large, carriers such as USPS, Fedex, and UPS are marching forward with purpose.
For e-commerce businesses, this is encouraging news. If you have business goals for the year, there’s no reason why you shouldn’t still shoot for them, in spite of the potential modifications you’ll have to make. As for the day-to-day, you may very well be providing something essential to someone in need, or at the very least, brightening their day with a highly anticipated new item. With the carriers open for business, hopefully your online shop can be as well.
Amazon Limits Fulfillment of Third-Party Items
As of March 17, 2020, Amazon has announced that it will be limiting its warehousing and fulfillment services for third-party sellers to essential items only, from now until April 5. According to an official statement, the company says it is “Temporarily prioritizing household staples, medical supplies and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers.”
Amazon’s FBA program (or “Fulfilled By Amazon”) allows outside vendors and independent sellers to utilize the company’s warehouse and fulfillment services to sell their own goods. This latest move will temporarily limit the types of items that Amazon will allow for sale from these businesses. Items that Amazon will accept fall into the following categories:
- Baby Products
- Health & Household
- Beauty & Personal Care (including personal care appliances)
- Industrial & Scientific
- Pet Supplies
This applies to both US and EU marketplaces. Note: shipments that were generated before March 17, will still be honored by Amazon. For further info and FAQs, check out Amazon’s official Seller Central page.
[UPDATE: During the week of April 13, Amazon announced that it will start allowing third-party sellers to ship some non-essential items via its FBA program.]
Optimizing for the Outbreak
If your ability to run business errands or work on process improvements gets interrupted, Shippo can help. The Shippo web app has scheduling functionality built directly into it for USPS and DHL Express, so you can quickly and easily schedule package pickup from these delivery services. The system even pre-fills customer information to speed up your internal processes. To take advantage of this benefit, you will need the following:
- At least one USPS/DHL transaction with the shipment date of today/tomorrow
- A valid sender/company address in your Addresses Tab in Shippo
- A valid phone number
Shippo will then provide the number of packages, weight, and other info to USPS and/or DHL. You can find more specifics about the process here.
For businesses with employees who are staying closer to home base, this can be an ideal time to audit your shipping processes and costs for even more efficient and cost-effective shipping, now and in the future.
Shippo offers an at-a-glance view of your company’s shipping spend and efficiency. And, with access to comprehensive tracking history, you can compare today’s spend with previous numbers to further improve processes and, ultimately, your bottom line.
Editor’s note: As we all navigate the COVID-19 outbreak, we just wanted to take a moment to let you know that we are fully operational—and here for you, for answers to questions, tips and more.
Navigating Shipping, Logistics & Operations During COVID-19 | Webinar
Get insights from a panel of industry experts on how to navigate the challenges of COVID-19 on shipping, supply chain and general e-commerce business operations. Check out our recent webinar, now available on Shippo’s Youtube page.