Amazon Prime Days feel more ‘normal’ amid ongoing supply chain challenges

As Amazon Prime Day continues today, it comes at a time when the e-commerce supply chain continues to hum along and make needed adjustments on the fly, which has largely been the case going back to the onset of the pandemic in early 2020.

The global e-commerce titan has often described Amazon Prime Days as “a 2-day parade of epic deals,” and there is no question that remains the case today, too. Now in its eighth year, Amazon Prime Days have become an event eagerly awaited and anticipated by consumers, and, from Amazon’s perspective, the logistics planning and preparation it requires by Amazon grows incrementally by the year.

While things have been anything but normal in recent years, there is a decent chance that things will have a more normal feel, germane to Amazon Prime Days, according to Jamie Kowalski, VP of Marketing for Sleek Technologies, a Chicago-based freight management and freight procurement software services provider.

“In terms of the general shopping experience, this year’s Prime Day will likely have a more ‘normal’ feel in comparison to the last couple of years,” said Kowalski. “In addition, Amazon, itself likely has a better grasp of what it can and can’t achieve after navigating the pandemic and having multiple ‘go-rounds’ at Prime Day at this point. Moreover, this will, of course, be aided by the fact that Amazon continues to pour money into its logistics operations and isgrowing its in-house logistics infrastructure 50% year-over-year. That said, despite the vast amount of resources Amazon has at its disposal, the supply chain and logistics space is still as uncertain as it has ever been, and continues to struggle when it comes to resiliency and redundancy. Therefore, Prime Day success is still far from a sure thing.”

As for the biggest concerns, or challenges, regarding Prime Day, she is hearing about from shipper customers, Kowalski explained that although Amazon continues to rely less and less on outside shipping partners, about a quarter of its shipments are still handled externally, according to SJ Consulting Group.

“However, with Amazon facing a surge in demand, it wouldn’t be completely unexpected to see it need to tap into the external market in order for it to keep up with the high bar the company has set for itself,” she said. “This naturally offers a tremendous opportunity for carriers, however, carriers are mindful of just how chaotic this situation could ultimately become.

And while things have settled a bit in comparison to the early days of the pandemic, Kowalski said carriers are still having to juggle sky-high fuel costs and new operational challenges—such as new tools they adopted during the pandemic—so carriers are definitely gearing up for potentially choppy waters.

“On the shipper side, although Amazon has tremendous sourcing capabilities, shippers are having to work overtime to ensure that they can stay in Amazon and customer good graces by making sure that they can continually replenish Amazon stock levels during this burst of demand,” she noted.

Looking ahead, Kowalski said that, in some ways, Amazon serves as a barometer for e-commerce activity between now and the end of the year.

The reason for that, she explained, is that Amazon is one of the busiest retailers even during quiet periods, adding that Prime Day is a great way for logistics and supply chain professionals to stress test their systems and gain a bit more perspective ahead of the traditional holiday shopping season.

“Granted, Amazon is the only show in town on Prime Day, so logistics and shipping teams will be faced with a much more diverse slate of issues at year-end,” said Kowaski. “However, given how sprawling Prime Day is, if shippers and carriers can get Prime Day, they can at least head into the holiday period with a bit of confidence and peace of mind.”

Looking back at 2021 Amazon Prime Days, the company reported called it the “biggest two-day period ever for Amazon’s third-party sellers, nearly all of which are small and medium-sized businesses, growing even more than Amazon’s retail business.” And it added Prime members in 20 countries shopped more on Prime Day in 2021 than any previous Prime Day, with members purchasing more than 250 million items globally—and saving more—than any other previous Prime Day.

“Amazon has another year to continue to grow Prime memberships (which they’ve done), and the popularity of Prime Day continues to grow,” said Rob Martinez, president and co-founder of San Diego-base Shipware. “Yours truly leveraged a couple of deals for the first time ever. They’ve also perfectly timed Prime Day with no major holiday remotely close in the calendar to compete with discretionary spending. The only thing that declines YOY order volume is the economy. High inflation and high gas/energy prices, of course, leads to poorer consumer confidence and lower discretionary spending.”