Sellers' Amazon loans at risk as company limits warehouses to essential goods

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Some Amazon sellers say the online retailer's abrupt decision to stop recei...

NEW YORK/LOS ANGELES - Some Amazon sellers say the online retailer’s abrupt decision to stop receiving non-essential inventory in response to the coronavirus pandemic could strangle the sales they need to make payments on their Amazon loans.

A spokesman for Amazon told Reuters on Thursday that the company is working to provide relief to the selling community. He declined to provide specifics. For Jamison Philippi, an Amazon seller based in Hackensack, New Jersey, toys and video games represent 95% of his Amazon business. But those products now are considered “non-essential” so he cannot restock them in Amazon’s warehouses.

“I’m hoping they suspend that for a month and offer a grace period,” said Philippi, who believes Amazon is making decisions that it believes are best for the selling community.Launched in late 2011, Amazon’s lending program makes loans of $1,000 to over $1 million to qualified sellers, and uses seller’s inventory in Amazon warehouses as collateral. Repayment terms are three to 12 months, and interest rates typically range from 6-19.9%.

“The terms of the loan definitely protect Amazon,” said a seller based in New Hampshire, who declined to be named. “At this time I have all of my eggs in the Amazon basket. I owe them more than I owe on my home.” His loan payment is just shy of $40,000 per month on a 12-month $500,000 loan.

 

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