Amazon.com Inc on Wednesday said it temporarily would not require sellers in its marketplace to repay loans it had made to them, as merchants confront the prospect of declining sales during the COVID-19 pandemic.
The world’s largest online retailer notified sellers that its program, known as Amazon Lending, would pause repayments beginning yesterday until April 30.
Interest would not accrue during that period, it said.
The program has offered sums between US$1,000 and US$750,000 to merchants looking for capital to acquire inventory, expand their product lines and advertise on Amazon.
“Loan repayments will restart on May 1, 2020... You will have the same number of remaining payments once repayment resumes,” Amazon said in a seller message obtained by reporters.
More than 20,000 merchants have received loans from Amazon, the company said in 2017.
By the end of last year, Amazon stood to receive US$863 million from sellers to whom it provided financing through the lending program, according to a company filing.
The loan terms range from three to 12 months, carrying interest rates from 6 percent to 19.9 percent.
As Americans turn to online shopping while quarantined, many online sellers, who are small and medium-sized businesses, are facing cash flow constraints amid supply chain and logistics issues caused by the outbreak.
EBay Inc, another major online marketplace, on Wednesday said it would defer most selling fees for merchants for 30 days.
Amazon’s offer might provide relief to sellers, some of whom could be hard hit by Amazon’s recent decision to restrict its US and European fulfillment services to household, medical and other essential goods during the outbreak.
Merchants of popular items from toys to apparel have worried that the temporary ban on stocking goods in Amazon warehouses, on which they depend for delivery, would mean low sales and difficulty paying back loans.
Jamison Philippi, an Amazon seller of toys and video games in Hackensack, New Jersey, told reporters that his income could drop by 75 percent just as he had a loan repayment of about US$3,500 due to Amazon on Wednesday next week.
“That’s super awesome. I cheered when I got that e-mail. That relieves a lot of stress right now,” Philippi said.
Amazon’s move came after at least one rival offered sellers relief.
Ricardo Pero, chief executive of lending company SellersFunding, last week said he was easing terms to help sellers on Amazon and other marketplaces navigate the rapidly changing retail market.
SellersFunding offers lines of credit and term loans to new and existing borrowers. Both products offer a 90-day interest-only period.
Amazon, which had won customers by continually making shipping faster over the years, has now slowed delivery to weeks in some cases in order to manage a flood of orders.
That could also dampen merchants’ sales as shoppers look elsewhere for goods.
STEPPING UP: The firm has also asked employees to work in split shifts from this week and to halt all but essential overseas business travel from next month Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has implemented a remote work policy for employees not on production lines in an attempt to curb the spread of COVID-19, the world’s largest contract chipmaker said yesterday. This is the first time in the Hsinchu-based company’s history that it has launched a large-scale remote work policy, joining global technology companies, such as Apple Inc and Google, that encourage employees to work from home. The chipmaker has also asked employees to work in split shifts from this week, it said. As the number of virus infections continues to climb worldwide, TSMC has urged employees to halt unnecessary
A two-hour drive south of Amsterdam in Veldhoven, workers decked out head-to-toe in protective gear toil in vast assembly halls. Before entering the inner sanctuary of the facilities, they meticulously layer on masks, gloves and special socks. A single speck of dust or a hair can have devastating effects on production. The result of all this painstaking process is an environment that is 10,000 times more purified than outside. As COVID-19 grips the world, it might just be the safest place to work right now. The teams belong to ASML Holding NV, which holds a de facto monopoly on the industry of
DBS Bank Ltd yesterday hacked its GDP growth forecast for Taiwan this year to 0.9 percent, down from its estimate of 2.3 percent two months earlier, in light of the COVID-19 pandemic and increasing financial market volatility. The bank’s latest forecast was even lower than London-based IHS Markit Ltd’s estimate of 1 percent, while other research institutes’ projections range from 1.6 percent to 2.6 percent. Taiwan’s economic momentum is being negatively affected by the pandemic, DBS said. The rapid spread of the disease from Asia to Europe and the US has dampened the bank’s previous expectation of a “V-shaped” global rebound in the
DOWNSIDE RISKS: Firms have a ‘very low’ chance of boosting investment returns in the next two years, making it hard for them to improve their capitalization, an analyst said Taiwanese life insurers wanting to improve their capital structure face strong headwinds this year, given prolonged low interest rates and economic impacts derived from trade protectionism and the COVID-19 pandemic, Taiwan Ratings Corp (中華信評) said on Friday. The local life insurance sector also still has high asset risks and such risks are susceptible to market volatility, the local arm of Standard & Poor’s Global Ratings said. Since last year, major financial holding companies — including CTBC Financial Holding Co (中信金控), Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控) — have announced plans to raise fresh capital to