Amazon's latest shipment delays show it's willing to largely give up on non-Prime orders as coronavirus puts strain on supply chain

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Amazon's latest shipment delays show it's willing to largely give up on non-Prime orders as coronavirus puts strain on supply chain
Amazon warehouse shipping employee books work
  • Many Amazon products are now showing shipment delays of over a month.
  • Marketplace experts say those delays are more severely affecting non-Prime orders.
  • The move shows Amazon is focusing its shipping resources on Prime orders, largely foregoing those without the Prime membership.
  • Roughly 35% of Amazon shoppers in the US, or 60 million of them, are estimated to be non-Prime users, according to CIRP.
  • Amazon could get more people to sign up to its Prime membership program as demand for online shopping grows amid the coronavirus outbreak.
  • Visit Business Insider's homepage for more stories.

Amazon's latest change in its shipping algorithm is showing heavy shipment delays of up to a month for many products.

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But e-commerce experts who monitor Amazon's marketplace say the delay appears to be more severely affecting non-Prime orders, showing Amazon's willingness to forego shoppers who don't pay the monthly or annual fee for Prime, as it grapples with supply chain slowdowns amid the coronavirus outbreak.

Multiple Amazon consultants told Business Insider on Sunday that Amazon started showing shipments taking over a month for a large portion of the non-Prime orders. A quick search on Amazon's website shows non-essential items like TVs and apparel giving estimated arrival dates of April 21 or later for non-Prime members. While Prime-eligible products are seeing relatively faster delivery times, they are also increasingly seeing delays of up to a month, according to Vox.

With most non-Prime orders seeing an estimated shipping time of 4 weeks or more, those shoppers without a Prime membership are unlikely to order anything from Amazon now. That, in turn, could prompt many of them to sign up for a membership, as many Prime orders are still seeing an average shipment time of up to 9 days, according to James Thomson, partner at Buy Box Experts.

"Unless you're a Prime customer, don't expect to get anything from Amazon soon," said James Thomson, partner at Buy Box Experts. "If ever there was a need to buy the Prime membership, now is the time to do so."

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The Prime membership gives access to perks like one-day shipping and video streaming content. Prime shoppers are a key part of Amazon's business as they tend to spend more - and buy more often - on its marketplace.

For non-Prime members, Amazon typically offers 5-to-8-day free shipping on orders over $25. For smaller orders, non-Prime members have to pay a separate shipping fee.

In an email to Business Insider, Amazon's representative confirmed shipment delays across the site, but declined to share details on how they're affecting non-Prime members.

"To serve our customers in need while also helping to ensure the safety of our associates, we've changed our logistics, transportation, supply chain, purchasing, and third-party seller processes to prioritize stocking and delivering items that are a higher priority for our customers," the spokesperson said. "This has resulted in some of our delivery promises being longer than usual."

Prime opportunity

The move is the latest in a series of changes Amazon has made in the past week to deal with a surge in demand and a slowing supply chain caused by the coronavirus outbreak. On Saturday, Amazon said it would stop shipping non-essential products to consumers in Italy and France. Last week, it told third-party sellers that it would stop accepting shipments of those products at its warehouses to make room for more vital items, like medical supplies and household staples.

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Almost 65% of all Amazon shoppers in the US are estimated to be Prime members, according to Consumer Intelligence Research Partners. That leaves almost 35% of all Amazon shoppers in the US, or roughly 60 million people, without Prime.

Jerry Kavesh, CEO of 3P Marketplace Solutions, said the massive spike in demand for certain products is putting huge strains across Amazon's supply chain, making it nearly impossible to deal with non-Prime orders. For now, Amazon seems to be focused on mostly serving its Prime members, he said.

"Amazon is overwhelmed and using this as an opportunity to sign up new Prime members," Kavesh said.

More than 32,000 people have been affected by the coronavirus in the US, and over 300 people have died from the disease. The US has declared a national emergency and is considering a slew of financial measures to help support the economy.

Amazon is expecting to see more challenges going forward. On Saturday, Amazon CEO Jeff Bezos publicly addressed the coronavirus issue for the first time in a letter to his employees, saying things will likely only "get worse before getting better."

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"My own time and thinking is now wholly focused on COVID-19 and on how Amazon can best play its role," Bezos said in the letter. "I want you to know Amazon will continue to do its part, and we won't stop looking for new opportunities to help."

To help ease the workload, Amazon announced last week that it's hiring 100,000 additional warehouse and delivery workers to help ease the workload. Those workers will get a $2 per hour pay raise through April as well.

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