Amazon’s New ‘Essential Items’ Policy Is Devastating Sellers

Bernie Thompson is exactly the kind of entrepreneur Amazon likes to celebrate. In 2009 the former Microsoft developer started his own electronics company, Plugable Technologies. He now employs 35 people in Redmond, Washington, and primarily sells his signature laptop docking stations through Amazon. In 2016, CEO Jeff Bezos highlighted Plugable in a letter to shareholders, noting how Amazon helps small businesses like Thompson’s grow. Plugable’s success story was so emblematic that Amazon featured it in a video advertisement designed to lure new business owners to its platform.

Then the coronavirus hit. Facing overwhelming demand for household essentials like toilet paper and groceries, Amazon announced last week that it would hire an additional 100,000 workers in the US, and would give employees in the US, UK, and Canada a temporary raise of at least $2 through the end of April. It also decided to stop accepting all other items at its warehouses, including those from Plugable, until April 5. In Italy and France, Amazon will deliver only essential items, regardless of what it has in stock.

The change sent Amazon sellers—many already facing other disruptions caused by Covid-19—scrambling to find new ways to get their products to customers. Shipping times have begun lengthening, from as little as 24 hours to weeks or more, contributing to a precipitous decline in sales. “People are not going to want to order items when they won’t ship for a month,” says Thompson.