Amazon informed sellers that its Amazon lending service plan will suspend payments from Thursday until April 30. Amazon said there would be no interest and late fees during this period.
Amazon loan provides loans ranging from $1000 to $750000 to businesses that need money to buy inventory, expand product lines and advertise on Amazon.
Amazon told sellers, loan repayment will restart on May 1, 2020 After the repayment is resumed, your remaining repayment will remain the same.
In 2017, the company said that more than 20000 sellers received loans from Amazon. Amazon made a total of $863 million in loans to sellers by the end of 2019, with maturities ranging from three to 12 months and interest rates ranging from 6% to 19.9%, according to a company document.
With more Americans turning to online shopping during the isolation period, the sudden outbreak also led to frequent problems in supply chain and logistics, and many small and medium-sized enterprise sellers are facing cash flow restrictions. EBay, another major online trading platform, said Wednesday it would delay collection of sales commissions from most businesses by 30 days.
Amazons offer may give sellers a sigh of relief. Because the company recently decided that during the outbreak, its logistics services in the United States and Europe are mainly used for the distribution of family, medical and other necessities, which may bring a heavy blow to some sellers.
Businesses in fields ranging from toys to clothing worry that temporarily banning them from storing goods in Amazons warehouses means that sales are sluggish and loans are hard to repay.
Jason Philippi, an Amazon retailer of toys and video games in Hackensack, New Jersey, has said his revenue could fall 75 per cent, but would have to repay Amazon about $3500 in loans on April 1.
Great. I cheered when I received the email. It relieves a lot of pressure, Filippo said.
Prior to Amazons move, some competitors had relaxed the deadline for sellers.
Over the years, Amazon has won customers by increasing the speed of delivery, but now in order to manage a large number of orders, in some cases, it has reduced the delivery time to a few weeks. This may also inhibit sales, as shoppers will go elsewhere to find what they need. (Chen Chen)