March 26 ( Xinhua) — Amazon.com Inc. said Wednesday local time that it would not ask sellers on its website to repay loans until May 1, according tomedia reports. As a result of the spread of the new coronavirus outbreak, platform sellers are generally facing a decline in sales.
Amazon has notified sellers that its service, Amazon Lending, will suspend repayments from Thursday until April 30. Amazon said it would not generate interest or late fees during that period.
Amazon Loans offers loans ranging from $1,000 to $750,000 to $750,000 to merchants who need money to buy inventory, expand product lines and advertise on Amazon.
Amazon told the seller that “loan repayments will resume on May 1, 2020 … When you resume your repayments, your remaining repayments will remain business as usual. “
The company said in 2017 that more than 20,000 sellers had taken out loans from Amazon. By the end of 2019, Amazon had extended a total of $863 million in loans to sellers, ranging in durations from three to 12 months, with interest rates ranging from 6 percent to 19.9 percent, according to a company filing.
As more Americans turn to online shopping during quarantines, the sudden outbreak has also led to frequent supply chain and logistics problems, and many small and medium-sized business sellers are facing cash flow constraints. eBay, another major online trading platform, said on Wednesday it would delay most businesses by 30 days to collect sales commissions.
Amazon’s proposal may give sellers a sigh of relief. The company’s recent decision to spend its logistics services in the U.S. and Europe on the distribution of homes, medical and other essentials during the outbreak could hit some sellers hard.
Businesses in areas such as toys and clothing worry that a temporary ban on stores in Amazon’s warehouses means weak sales and difficulty repaying loans.
Jamison Philippi, a seller of Toys and Video Games at Hackensack, N.J., has said his income could fall by 75 per cent, but will repay about $3,500 in loans to Amazon on April 1.
“That’s great. When I received the e-mail, I cheered. It relieves a lot of stress,” Philby said.
Amazon’s move follows a move by rivals that have relaxed term limits on sellers.
Ricardo Pero, executive director of sellers’ fund, said last week that he was relaxing conditions to help sellers in Amazon and other markets survive in the fast-changing retail market. SellersFunding provides credit lines and term loans to borrowers. Both products offer a 90-day interest-only period.
For years, Amazon has won customers by increasing shipping speeds, but in some cases has reduced delivery times to weeks in order to manage large numbers of orders. It may also dampen sales, as shoppers look elsewhere for what they need. (Chenchen)