Merchants of popular items
from toys to apparel have worried that the temporary ban on stocking goods in
Amazon warehouses.
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 coronavirus pandemic. The world's
largest online retailer notified sellers that its programme known as Amazon
Lending would pause repayments beginning Thursday until April 30. Interest
would not accrue during that period, it said.
The programme has offered
sums between $1,000 (846.5 pounds) and $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
Reuters.
More than 20,000 merchants
have gotten loans from Amazon, the company said in 2017. By the end of 2019,
Amazon stood to receive $863 million from sellers to whom it provided financing
through the lending program, according to a company filing. The loans' terms
range from three to 12 months, carrying interest rates from 6 per cent to 19.9
per cent.
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, said on Wednesday it will defer most selling fees for merchants
for 30 days.
Amazon's offer may provide
relief to sellers, some of whom could be hard hit by Amazon's recent decision
to restrict its US and European fulfilment services to household, medical and
other essential goods during the outbreak.
