80/20 Of Ecommerce – March 25, 2022

China Sourcing Updates, Amazon will automatically remove aged inventory – 80/20 of Ecommerce

China Sourcing Updates – March 25th, 2022

According to our sources on the ground, Shenzhen is no longer in lockdown and factories and deliveries are beginning to resume as normal.

However, other parts of China continue to be affected including the Shandong area. One of the suppliers I’m personally working with has experienced a lockdown until monday February 28th, at the least. 

So, the takeaway is continue to monitor and communicate with your suppliers to minimize the disruptions due to the pandemic.

Beginning April 15, Amazon will automatically remove aged inventory

Prime Day is fast approaching. Amazon made changes to implement automatic inventory removal. This deals with items that have been in a fulfillment center for more than 365 days and are also subject to long-term storage fees.

ASINs have been at the fulfillment center for more than 180 days and have not been sold in the last six months. 

Sellers can liquidate these items or provide a valid return address in the Auto-Fulfillable Inventory settings, and Amazon will return the inventory to the seller. The inventory will be automatically donated, recycled, or disposed of if no return address is specified.

Removing stale inventory will benefit sellers who suffer from long-term storage fees. It will also improve Inventory Performance Index scores and frees up space in Amazon fulfillment centers for more popular inventory.

Starting April 15, the automatic removal shall be implemented every month. If you wish to modify your return address, please do so at least 24 hours before April 15 to guarantee that your changes are preserved.

On Amazon, American sellers are regaining market share

American vendors have been recovering market share on Amazon for more than a year, reversing a multi-year pattern of losing to primarily Chinese sellers.

Domestic firms account for 55 percent of the top third-party sellers on Amazon’s marketplace in the United States, up from an all-time low of 48 percent in November 2020. 

Sellers located in the United States have increased their market share during the last sixteen months. For years, the proportion has been steadily decreasing.

Top sellers aren’t the only ones who behave this way. Since late-2020, American vendors have been increasing their expected sales volume share. After falling below 50% at one point, it has now recovered.

Some problems include lockdowns, supply chain difficulties, seller suspensions, and Amazon FBA inventory constraints. There has also been a decline in new seller registrations from China, accounting for 75% of all new seller registrations.

Finally, Chinese retailers are losing ground in the United Kingdom, Germany, Japan, and other Amazon markets.

What else is impacting the trend, and, more importantly, whether it will be reversed, is unknown. 

Invite to my Live China Sourcing Workshop – Seller Fest Online

As you’ve seen, China sourcing is changing by the day and I’d like to invite you to a live training session that I will give at  Seller Fest Online on March 28, 2022. In this training you will learn:

  • The state of sourcing from China
  • The Covid effects on lead times, pricing, and raw Materials
  • Recommendations to optimize your sourcing and maximize your profitability

Get a Free Pass here

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– Gary

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