While many of us may be fortunate enough to slowly be emerging from the events of 2020, online sellers are still facing some fairly dramatic repercussions—not least of which has been supply chain disruption. According to a March 2021 survey commissioned by GEP, up to $4 Trillion globally may have been lost as a result of logistic providers and supply chains facing an increasingly fragile infrastructure unable to meet heightened consumer demands.
Domestically, supply chain disruption resulted in a marine port congestion which effectively paralyzed the three main terminals on both the east and west coasts; most notably, at the Port of Los Angeles, one of the busiest gateways for the import of Chinese goods. Yet global consumer demand for monthly Chinese imports reached a five year high of 300,000 units in September 2020, culminating in a drastic shortage of container availability.
The result may have been a boon for private firms in China who have begun accumulating containers for resale at inflated prices. But the exorbitant shipping rate increases have been a nightmare for both domestic and Chinese-based sellers on Amazon—the latter of whom represent an estimated 75 percent of new sellers in 2021. Combined with the burden of elevated tariffs already in place on Chinese exports, sellers may be wondering how they can actually absorb the skyrocketing costs of shipping while continuing to meet customer demands.
1.Make Certain Your Product Line is Guaranteed to Sell
No matter how much of a price advantage buying in bulk from China may be, the ensuing cost of shipping isn’t worth the overstock—particularly if you’re an FBA seller. Taking the time to review at a SKU level which items are actually selling may prove time consuming. But it can mean the difference between 5 unsold units and 500.
2. Bundle Imports with Domestically Manufactured Products
While product bundling might seem like an art form, it’s actually a fairly ingenious strategy which can help rotate slow-moving merchandise manufactured domestically. Take careful notice of Amazon’s product bundling guidelines, however. Amazon only permits items which are considered highly complementary to be included in a bundle (a consideration which can be an art form itself!)
3. Plan for the Holidays as Early as Possible
Ordering for Prime Day from China two weeks ahead of time is a recipe for disaster. But ordering for Chinese New Year itself will prove next to impossible unless it’s at least five months ahead of time (and for those of you keeping track, it will occur on February 1st in 2022.) With everything to worry about during holiday planning, late shipments and increased fees should be the furthest thing from your mind.
4. Maximize Your Domestic Product Line
It might seem like a temporary solution. But until supply chain fragmentation becomes more manageable, it’s a realistic one. We’ve already seen many sellers leverage domestically manufactured products as part of their promotional strategy to no small degree of success as consumers are becoming aware of the issues surrounding shipping rates in China. While we hope the crisis is short-lived, freeing up your cash flow is critical during the eCommerce upturn; and encouraging domestic shipping is the simplest way to achieve it.
Color More Lines provides white glove, global account management of your eCommerce platforms so mission-driven companies can focus on new product development, branding and growth strategies. Find out more at Color More Lines.