According to merchants, the deals during Amazon’s annual Prime Day sale will be stingier this year, thanks to rising shipping costs, higher advertising rates, and scarce inventory.
The two-day event arrives as the world suffers the effects of the pandemic. Supply-chain disruptions, including the Suez Canal, shut down earlier this year, and a spike in Covid cases with two of China’s busiest ports working at a slower pace -- have pushed up costs and made Amazon suppliers wary of selling too much during a profit-crushing sale. Many say they’re also holding back inventory if shipping delays persist through the busy Christmas holiday shopping season.
Amazon merchants, who account for 60% of sales on the website, are betting cash-rich consumers will overlook the more meager bargains and still swarm Prime Day. Online spending in the U.S. will hit an estimated $12.2 billion during the sale, with Amazon capturing 60%, according to EMarketer Inc. As always, competing retailers are looking to surf the Prime Day wave. Walmart Inc.’s “Deals for Days” and Target Corp.‘s “Deal Days” began Sunday.
“Prime Day is going to be less exciting than it has been in the past,” he said. “You don’t want to scare away demand, but you have to manage profitability.”
After delaying Prime Day in 2020, Amazon this year moved the sale forward from its typical July slot to June -- giving merchants only three weeks’ notice. Typically sellers like to place orders with factories several months in advance so the products can be shipped to the U.S. in time. The abrupt announcement means many merchants will have a more limited selection than they would with a longer lead time.
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