Coronavirus Concerns Have Amazon Stockpiling China-Made Goods

Date: Thursday, February 20, 2020
Source: Sourcing Journal

Amazon is projecting an air of unflappability amid coronavirus concerns, but new reports show the online mega-retailer’s operations are abuzz with contingency plans as the disease increasingly threatens supply chains.

Leaked emails obtained by Business Insider show that Amazon reached out to an unknown number of suppliers last week to augment its orders for inventory produced in China, presumably in preparation for further disruptions to factory operations.

“Amazon issued off-cycle orders to you last night in order to prepare for possible supply chain disruptions due to recent global events originating in China,” the company wrote to a supplier in an email read by Business Insider.

The company declined to speak on the record about the severity of the situation or the scale of its impact, but a spokesperson confirmed to Sourcing Journal that additional orders have been placed.

“Out of an abundance of caution, we are working with suppliers to secure additional inventory to ensure we maintain our selection for customers,” the spokesperson said.

In separate correspondence obtained by Business Insider, Amazon told a supplier it was placing “stock-up purchase orders for several weeks of supply,” and that the company would give them five extra days to ship the items to Amazon warehouses in the U.S., waiving late shipment fees.

The last-minute stockpiling efforts come as the coronavirus’ impact reaches a fever pitch. As of Friday morning, according to the World Health Organization (WHO), the illness had infected 47,505 in China and 505 abroad.

Amazon also reportedly told third-party sellers last week they should take necessary measures to ensure their sales performance would not be impacted by the virus, encouraging them to cancel previous orders that they’d no longer be able to deliver, and even place their accounts in vacation status.

Reports of the coronavirus first began circulating in December. As citizens across the country took leave for the Chinese New Year holidays in late January, the disease’s rapid spread began sparking panic across the globe.

Workers were due to return to their posts in the country’s many factories last week, but the Chinese government extended holiday leave in order to promote the virus’ containment. The Chinese government is reportedly performing inspections of facilities this week as some workers have started returning to their posts, and will issue a mandate on the full reopening of operations, taking those findings into account.

 

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