Exclusive: Amazon delays Prime Day trade event due to coronavirus

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(Reuters) – Amazon.com Inc (AMZN.O) postpones its main summer commercial event Prime Day at least in August and expects a potential $ 100 million blow from surplus devices that it may now have to sell at a discount, according to the notes. internal meetings consulted by Reuters.

FILE PHOTO: Amazon packages are pushed onto ramps leading to delivery trucks by a robotic system as they travel on treadmills inside an Amazon distribution center on Cyber ​​Monday in Robbinsville, New Jersey, United States, December 2, 2019. REUTERS / Lucas Jackson / File photo

Amazon declined to comment. Prime Day, a marketing event launched by Amazon in 2015 to boost sales during the summer shopping break, already happened in July, although the company never publishes the date in advance.

The notes, in which Amazon’s general counsel wrote critical comments on an employee previously fired by Vice News, offer a rare glimpse into strategic planning at the world’s largest online retailer.

They reflect how quickly the company reacts to the commercial risks of the new coronavirus, which has caused a surge in demand for basic food products and has led to several protests by some Amazon warehouse workers fearing contagion .

The First Day decision means that Amazon will have 5 million more devices to sell, items such as its voice-activated Echo speakers that have grown in popularity. It also affects third-party merchants who now depend on the Amazon platform for revenue.

“We probably have to promote earlier, which will be difficult if our capabilities are limited,” wrote general counsel David Zapolsky in the notes to a daily meeting of Amazon executives. The notes indicated that this would result in a “worst case” impact of $ 300 million, with a more likely $ 100 million success.

It was unclear how solid the estimates were or what the final impact would be on Amazon. Amazon said more than 175 million items were sold on the first day of last year, among which the top sellers were Echo Dot and Fire TV Stick.

Launched in 2015, Prime Day went from a one-day event to a 48-hour sale last year, with 18 countries participating. Offering exclusive discounts to more than 100 million Prime members, Prime Day has been an incentive to attract customers to the Amazon ecosystem, as well as to promote devices owned by Amazon.

While Amazon does not disclose the gross volume of goods (GMV) generated by Prime Day, it noted that third-party sellers contributed $ 2 billion in sales during Prime Day in 2019.

Baird analyst Colin Sebastian estimates last year’s Prime Day volume at nearly $ 6 billion, and market intelligence firm IgnitionOne suggests at least $ 6.2 billion in GMV during the Prime Day 2019.

Report by Krystal Hu in New York and Jeffrey Dastin in San Francisco, edited by Franklin Paul and Nick Zieminski

Our standards:Principles of the Thomson Reuters Trust.

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