Amazon delays Prime Day, loses up to 300 million

Amazon has decided to delay its annual discount day Prime Day due to the corona crisis, a decision that may cost the company some 300 million dollars (270 million euros).

Five million devices unsold

Prime Day will not take place in the beginning of July, but is delayed to a date later in the year due to the coronavirus pandemic. That decision will however mean that the e-commerce giant will be unable to sell up to five million devices, like Amazon Echo smart speakers, at the planned date and price.

Amazon’s sale partners will also miss out on quite a lot of sales; last year’s Prime Day turnover from external partners is estimated to have been around the two billion dollar mark.

In order to limit the damage, Amazon may have to be forced into earlier discounts – which may raise issues with capacity if the coronavirus crisis keeps influencing shoppers’ behaviours. In a worst case scenario, the cost for Amazon may be up to 270 million euros. A more likely scenario would see a damage of around 100 million euros, Reuters reports based on leaked meeting notes.

Data centres in danger

The coronavirus is also raising concerns about the company’s warehouses and data centres: following employee protests about the lack of safety during this pandemic, Amazon is introducing strict social distancing rules. These measures may however jeopardise the planned opening of new data centres in Ireland. Some construction companies prefer not to continue working on that project.

Amazon also fears that governments or employees will shut down certain cloud computing activities. As that is the area where Amazon makes nearly all of its profits, any setback here would have a major impact on the company’s financial results.