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Amazon Prime Day set to be bonanza for small firms

29 September 2020

UK shoppers could spend as much as £1 billion in an early Christmas shopping spree during the two-day Amazon Prime event before Brexit brings in new bureaucracy and potentially higher prices.

Amazon Prime Day sales have jumped over 50% every year since it started in 2015. Now delivery firm ParcelHero has forecast that this year's Amazon Prime Day in the UK will bring in more than £1bn in early Christmas shopping over the two-day event on 13-14 October.

Prime Day is usually held in August but due to the pandemic, it has been shifted to October this year. It's very popular with shoppers looking for good deals as well as small businesses that use Amazon as a marketplace for their goods. Many use the Fulfilled By Amazon service (FBA) which allows them to ship stock to an Amazon centre where staff can then fulfil customer orders and deal with any returns.

This year, retail experts are predicting that Christmas shopping will begin earlier as shoppers worry about the effects of the coronavirus pandemic on the availability of products and their prices.

Prime Day is already one of the biggest shopping events of the year but it looks set to break new records, according to David Jinks, ParcelHero's head of consumer research.

"In 2019, Amazon's Prime Day outstripped its Black Friday and Cyber Monday sales combined," he said. "In the UK alone, the event caused August's entire online sales to jump by an incredible 6.9%, according to the Office of National Statistics (ONS). That equates to an extra £808m created by Amazon Prime Day alone. This year, UK shoppers and Amazon traders are seizing the chance to break new records before Amazon removes the UK from its European Fulfilment Network (EFN). We predict this will add up to a £1bn pre-Christmas spending frenzy this October."

Jinks has praised efforts by Amazon to support small firms this year with an offer designed to increase sales by independents. Prime Members who buy £10 worth of products from selected small businesses, such as beauty and grooming, books or electronics, from 28 September-12 October, will earn £10 to purchase virtually any product on Prime Day.

However, he has warned that the effects of Brexit could be challenging for many small businesses that rely on Amazon for business. This summer, Amazon announced that from 1 January 2021 FBA offers using EFN would not be fulfilled across the UK-EU border.

"That might not mean a lot to most Brits but, given that the service ends just six days after Christmas, it sent shockwaves through Amazon's UK sellers' community," said David Jinks. "It means all UK stores using Fulfilment by Amazon (FBA), a scheme which sellers pretty much have to belong to in order to even take part in Prime Day, won't be able to use its European Fulfilment Network to send or import stock to and from the EU anymore."

The situation is "equally dire" for retailers using Amazon's Pan-European service, he said. "Currently UK-based Amazon sellers simply send their EU sales stock to their nearest fulfilment centre. Amazon takes on the cost and hassle of distributing it for storage across Europe. From 1 January, UK Pan-European sellers will have to send stock to an Amazon warehouse in the EU at their own cost. For traders, this means splitting stock and potentially increased transport and storage costs."

He added: "This year might well be a UK Prime Day record-breaker but, next year, shoppers will pay increased costs on any deals from sellers in EU countries and buying from UK sellers who source items from Europe. All considered, for UK shoppers and sellers, next year's Amazon Prime Day could end up past its prime."

Written by Rachel Miller.

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