The fire in the United States "burned" the orders, and a group of sellers suffered heavy losses

On January 7 this year , a fire suddenly broke out in the Pacific Palisades community in Los Angeles, USA, and quickly spread to other communities.

As of now, the fire has destroyed more than 10,000 buildings, forced more than 180,000 residents to evacuate, and the entire Los Angeles area has entered a state of emergency.

For a time, all local infrastructure was paralyzed, with the logistics system being the most seriously affected. Due to the fire, many highways in the United States were forced to close, resulting in the inability to operate logistics and transportation normally, and package delivery in many regions may be delayed to varying degrees.

In addition, operational difficulties are also occurring at multiple ports in the United States, which will affect container unloading and pick-up, and the time required to unload containers at the warehouse will also be delayed accordingly.

It is understood that many freight forwarders have issued notices stating that multiple Amazon warehouses will be affected and the sellers' delivery time will inevitably be affected.

However, compared with delivery delays, what may be worse for sellers is the decline in order volume.

A batch of seller orders were cancelled

Recently, many sellers reported that many orders were suddenly canceled in recent days, and after seeing the reasons, the sellers seemed a little helpless.

According to feedback from one of the sellers, he saw a return /refund request yesterday with the reason being: Due to the need to evacuate due to the fire, we no longer need this product because our home has been burned down.

Although he sympathized with the consumer's experience, the seller was also heartbroken by the losses incurred from the return.

"I just heard about the serious wildfire in Los Angeles recently. I was wondering if it would affect my business, but I didn't expect it to come true so soon. I can understand the return application, after all, no one can control natural disasters or man-made disasters, but I hope Amazon can provide sellers with corresponding subsidies for this situation."

According to preliminary information, the return incidents caused by the wildfires in the Los Angeles area are not isolated cases. A number of sellers have received related return applications, among which home furnishing sellers are the most severely affected.

However, judging from the feedback, these sellers have basically accepted this fact. Some sellers even joked that "It is common to encounter returns on Amazon. What's more, at least they really gave a reasonable reason this time."

In addition to order cancellations, the sudden fire in Los Angeles also burned a lot of sellers’ overseas inventory. As we all know, Los Angeles is a logistics hub for the US e-commerce industry, with Amazon FBA warehouses, third-party logistics carriers and many sellers’ private warehouses concentrated in this area, and the fire directly “wiped out” all of these warehouses.

According to an Amazon seller who mainly sells household products, a large amount of his inventory for the peak season is in a warehouse in California, and more than $200,000 worth of goods have been burned to ashes. What makes him even more desperate is that because the amount that insurance can pay is far lower than the value of the damaged goods, his entire capital chain is directly at risk of being broken.

Although the losses caused by this incident are a foregone conclusion, an industry insider provided sellers with some suggestions on how to avoid similar situations in the future:

First, in terms of logistics and warehousing, sellers can consider dispersing goods to warehouses in different regions to avoid putting all their eggs in one basket. This way, sellers will not be completely paralyzed when emergencies occur.

On the other hand, one of the main reasons why many sellers suffered heavy losses from the fire was that they did not insure their inventory, or they did but the insurance company deemed the fire as "force majeure" and could only pay a very low amount or even refused to pay at all. Some insurance policies even hid the relevant clauses, causing sellers to be anxious when they suffered huge losses this time.

In the future, when sellers purchase inventory insurance or property insurance, they should pay special attention to whether the insurance they purchase includes "natural disaster" compensation, especially common natural disasters in the United States such as fire, earthquake and blizzard.

Finally, sellers should enhance their cross-border logistics capabilities and prepare multiple alternative logistics solutions in advance so that in an emergency, their account scores will not be reduced or frozen due to delivery delays.

There are opportunities in crisis. Some sellers have seen the opportunities behind the fire.

Although the fire caused serious losses to many sellers, some sellers saw business opportunities behind the crisis.

One seller said: "It's a bit hellish to say this, but for furniture sellers like us, this fire burned their furniture and they just came to us to buy new ones."

In addition to furniture sellers, demand for outdoor products may also surge in the short term.

According to Google Trends data, there was a small peak in outdoor-related search terms on January 9 and January 10.

Among them, the search volume for tents soared by 4,700%, and the sales of other outdoor products such as sleeping bags, water cups, camping lights, etc. also increased significantly.

Industry insiders analyzed that Los Angeles residents who were forced to evacuate due to the fire may now face a situation where they have nowhere to go, and related outdoor emergency items have become a necessity.

It is foreseeable that in these disaster-stricken areas, the demand for outdoor products will continue to increase, especially those that can meet the needs of temporary residence and outdoor life.

However, this does not mean that sellers can get this wave of traffic by preparing stocks now. First of all, it is still unknown how long the impact of this emergency will last in the future. If sellers prepare stocks blindly, they may end up with nothing.

Secondly, the local logistics system is still in an emergency state, and it is expected to be difficult to deliver relevant supplies to the disaster-stricken areas.

The only ones who can seize this wave of traffic are probably those sellers who already have outdoor products and have inventory in many places in the United States.

Amazon

Seller

Los Angeles Fire