How to Avoid Chinese New Year Shipping Delays and Maintain Healthy Amazon Inventory Levels
Hi there! My name is Will Marcotte, and I’ve been with our Services team at Seller Labs for about four years now. Before and during that time, I’ve had the pleasure of personally working with over 100 online sellers and helped develop strategies for hundreds of Amazon businesses. And now, I’m bringing that knowledge and experience directly to you through blog posts, videos, webinars, Q&As, and more! Be on the lookout for topical hints and heads-up coming from me very soon. In the meantime, please take a look at these tips we have to share with you. Enjoy!
Marketing Manager and Online Advertising Expert at Seller Labs
When you sell on Amazon, you face several challenges, not the least of which is sourcing and manufacturing your product. There are myriad options for how and where your product can be manufactured, with a large number of reasons for doing this in mainland China rather than in the U.S.
With all the pros and cons of this approach, one major factor needs to be considered each Holiday Season: Chinese New Year. While this does indeed coincide with the Lunar New Year, we will be discussing how China approaches this holiday, and how it impacts you as a seller.
What Is Chinese New Year?
As mentioned above, the Chinese New Year holiday is roughly synonymous with the Lunar New Year, which gives you a clue as to when the holiday will occur. Rather than being based on the Gregorian calendar, the Lunar New Year is a public holiday based on (you guessed it) the Lunar Calendar, with the holiday itself being (you guessed it again!) the beginning of the year on said calendar. So, when is that?
The Chinese New Year holiday is on January 22, 2023, but that isn’t the full story. Celebrations will begin the day before, on January 21, with the holiday itself running until the sixth day of the new lunar year on January 26. During this period, virtually every business in the country will be closed, including factories. So will those manufacturers in China be closed for a seven-day period? Again, not quite.
In the weeks before the Chinese New year itself, factory workers will likely take time off from their job to go home and visit family, meaning that said factories will be at near-zero (or zero) capacity. The same is true after the holiday proper, as it will take time for these workers to return. That is if they return, a fair number of workers may not come back after the holiday, and even some factories will remain closed indefinitely after that time. So be mindful of this if you’re considering making a deposit for products to be manufactured immediately after the holiday.
With all of this in mind, when should you ramp up your inventory levels to keep your best selling products in stock? Let’s find out.
Managing Stock Levels Ahead of the Holiday
All Amazon sellers need to be aware of how their inventory performs at any given time, especially when a massive event like this may disrupt supply chains. When you manage your inventory, it’s likely that you keep an eye on the FBA Inventory Dashboard to determine when you need to get more products to meet demand. You may also use inventory management systems and software. However, any of this data will be skewed during the upcoming Chinese New Year holiday due to the factory closures.
Just a quick reminder: If you don’t source your inventory from China, this generally doesn’t apply to you. However, bear in mind that even if you source from elsewhere, there will be ripple effects across the supply chain because of it.
As for when you should start asking for more product to be manufactured, the answer is NOW if you haven’t already done so. Then not only will you barely make it ahead of the New Year, but you will also take advantage of the current freight rates, particularly the cost of containers, which has been falling and is nearing pre-pandemic levels.
You may ask yourself: “Why don’t I just wait until after the holiday? I can coast with my existing inventory in the meantime.” However, do you remember when we mentioned that some workers don’t come back after the holiday? When this happens, product quality on manufactured items tends to dip, as the factory likely has to train new employees and scramble to fill all the other orders shipping into Amazon FBA. Given that quality issues can result in lower scored reviews on Amazon, it’s critical to avoid waiting until right after the holiday to shore up your inventory.
What Data Should I Look at to Make Decisions?
As we mentioned, using the FBA Inventory Dashboard is usually your best bet to determine when you should restock products, as it estimates how long your existing inventory will last. However, this data may need to be taken with a grain of salt when there will be weeks where you aren’t able to source your inventory. If you use other Amazon inventory management systems or software, you may be able to update parameters to accurately determine how much more merchandise you need to order right now.
If you don’t have access to those tools, you should look at how your inventory performed in previous high-traffic periods to decide how much more you may need to source right now. Essentially, even if the first quarter of 2022 wasn’t particularly successful, seeing how much inventory sold in other periods can give you a picture of what you may lack in the upcoming quarters. This is a little more clunky than managing your Amazon inventory with advanced tools but should give you a relatively accurate estimate of the product amount you’ll need.
If your product is focused on holidays or events that take place in February, such as Mardi Gras or Valentine’s Day, you will absolutely need to get those orders in as soon as possible.
Something else to keep in mind is that these factories are operated by other human beings; don’t forget to simply reach out and discuss how much more product you may need! If they’ve been operating for a few years, they likely have fairly significant experience navigating the New Year and can help you make the best decisions for your business.
Finally, another option is to have a backup plan for the Chinese New Year. While sourcing products from places other than mainland China may end up costing more, it’s a more stable way to ensure that you won’t run out in the coming weeks (though you may have to have some deeper discussions with the new manufacturer to ensure good product quality).
Along with all the valuable tips to keep your products in stock during the Chinese New Year, there’s a couple more things worth mentioning. At the time of writing, there are currently protests going on throughout mainland China, which could also impact your sourcing and manufacturing. In addition to this, COVID cases are on the rise in China as well.
I would recommend getting in touch with your manufacturer as soon as possible about any additional delays in obtaining your products. Remember, these are other human beings you’re working with, and they will have their own factors and experiences that could affect your lead times.
Now that you have this information at your disposal, go ahead and get the ball rolling with either contacting your supplier, or determining possible alternatives so that you don’t experience any disruptions in getting your products to Amazon. Also, bear in mind that our Services team can help you with far more than just advertising. We offer full Management of your Amazon store, and can help you determine appropriate lead times.
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Will is a Marketing Manager with Seller Labs Services. He not only has multiple years' experience in the space, but prides himself on his ability to adapt to changes and help impart the impact of those changes to others.