SUPPLY -ECONOMICS- DEMAND : AMAZON

EDDIE LEVINE, who has been selling on Amazon since 2012, shipped more than 130 containers of toys, house wares and other goods from China last year, largely to offer on the site.

He has cautioned the brands he works with against raising prices, saying that of a $20 product suddenly costs $40, ''the last thing you want is a bad review saying it's not worth $40.''

But if your virus disruption persist into late spring or early summer, ''people will have to raise prices without even having the option because there is just no stock, Mr. Levine said. ''That's pure supply and demand.''

Amazon is likely to feel potential shortages of  goods earlier than its American peers because it usually keeps fewer items on hand than they do.
In good times, that lets the company run more efficiently, because it does not tie up money to buy and store products that are waiting to be sold.

But that approach called ''lean inventory'' exposes Amazon to shocks.

''This is a cost to pay for the efficiency that a  just-in-time supply chain gets you,'' said Guru Hariharan, a former Amazon employee and the founder of CopmmerceIQ, a start-up whose automation tools are used by major brands including Kimberly-Clark and Logitech.

Some supply problems may be hidden. Even products made in America can rely on Chinese suppliers, which may cause problems down the line.

Ketchup made in a plant in Sacramento, for example, may depend on tomato paste or bottles and caps from China.

Amazon faces an additional wrinkle in keeping its  virtual shelves stocked : While traditional; retailers generally control their inventory directly, most of the products on Amazon are bought and sold by third-party merchants. Amazon simply facilitates those sales, giving it less visibility into supply.

''Out of an abundance for caution, we are working with suppliers to secure additional inventory to ensure we maintain our selection for customers,'' an Amazon spokeswoman said.

The company later added, ''We are monitoring developments relating to the coronavirus and taking appropriate steps as needed.

Amazon's algorithm have now asked for the six to eight weeks of supply on products made in China instead of just two or three weeks,'' said Mr. Hariharan, who discussed the changes with the large brands that supply the retailer.

Amazon has also made larger and more frequent purchases, deviating from its regular cadence of automated buying, according to company emails and consultants.

''Amazon issued off-cycles orders to you last night in order to prepare for possible supply chain disruptions due to recent global events originating in China,'' one recent email to a vendor read. Similar emails were earlier reported by Business insider.

The honor and serving of the latest global research on Supply Chain disruptions, and Amazon's pipeline, continues. The World Students Society thanks authors Karen Weise and Michael Corkery.