Coronavirus: Amazon is stockpiling to avoid a supply chain collapse
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According to e-mails leaked from Amazon, the e-commerce giant is stockpiling to prevent problems that could arise from the spread of coronavirus. It is ordering goods from China.
At the beginning of February, Amazon contacted a number of Chinese suppliers and placed last-minute orders to replenish stocks of goods produced in the Middle Kingdom, reports “Business Insider”.
According to the portal, in this way, the e-retailer makes every effort to prevent disruptions in the supply chain that could result from the coronavirus epidemic.
The head of MGA Entertainment, the creator of popular LOL-Surprise dolls, admitted in an interview with “Business Insider” that the virus may cause a ‘global crisis’ with serious consequences.
Recent orders are a reaction to the virus and mainly concern products sold in the United States, but produced in China, Amazon told its suppliers.
According to the e-mails received by “Business Insider”, the company informed that it will ‘order stocks for a few weeks’ and provide suppliers with five extra days to send products to their warehouses. The e-commerce giant also declared in messages to suppliers that it is renouncing late delivery charges.
This is a reasonable strategy to secure the supply chain. Approximately 40% of the products sold by Amazon come from the above-mentioned wholesale suppliers, and most of them use Chinese factories.
Many brands from various sectors, such as fashion, electronics, pharmaceuticals, transport and automotive, are struggling with the consequences of coronavirus. Many manufacturers decided to suspend production in China. This affects the supply chain around the world.
Photo: Flickr / Álvaro Ibáñez / CC BY 2.0