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While some parts of China are returning to standards, like Shenzhen and Shandong province, Shanghai is still experiencing a severe sustained lockdown. There are mixed reports on whether Shanghai ports and logistics are operating as usual.
The status is changing day by day, if not hour by hour. My main recommendation is to work with your suppliers and freight forwarders to get the latest information on how to minimize the disruption.
In terms of civilian life in Shanghai, many families are stuck at home. Going out to walk their dogs in their apartment complexes seems impossible. Meat and seafood are in short supply. So, it is a very chaotic time. As to when the lockdown in Shanghai will end, nobody knows for sure. Some people suspect that it may last until the end of the month.
Trucks are still able to enter Shanghai despite the lockdown. However, several local governments in other places refused to allow Shanghai truck drivers to pick up products. A shift to FOB Ningbo, 250 kilometers from Shanghai, might be preferable.
Amazon sellers should strategically plan on their restocking and inventory to avoid taking a loss due to delays. To avoid interruptions caused by the pandemic, continue monitoring and engaging with your suppliers.
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Economists at Goldman Sachs, an investment management firm, have seen three effective solutions for companies in the U.S to strengthen the supply chain — reshoring foreign production, diversifying supplier networks, and overstocking inventories.
However, between reshoring and overstocking strategies, the latter is used by those offering durable goods. According to the survey, companies studied by Goldman Sachs are striving for inventory-to-sales ratios that are on average 5% greater than before the pandemic. At the same time, reshoring appears to be limited.
The analysts also discovered that businesses that rely heavily on suppliers from countries with more substantial virus restrictions would have lower revenue growth in 2020. In 2021, those businesses were more likely to diversify their supply base. To quote Goldman Sachs economists, they wrote “Greater supply chain resilience comes at a price, and some investors worry that these trends will add to inflationary pressures,”
As an Amazon seller, proper inventory management is vital to stay ahead of competition especially amidst the disruptions in the supply chain. Taking the time and effort to weigh your options between reshoring foreign production, diversifying supplier networks, and overstocking inventories should be your priority to combat delays. See what works best for your business and implement it strategically.
Be efficient and ensure that you have the necessary supplies on hand to be on top of the game.
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Increased activity in online shopping has been the reason for the liquidation of stores like Quick Pick and Krazy Binz to come up.
They sell overstock and returned items from giant retailers like Amazon for a lower price.
Recently, liquidation stores have been opened in Ottawa. Gilles LeVasseur, a University of Ottawa business and management professor, believes that more similar stores will come to Ottawa due to its proximity to the Amazon warehouse.
He explained that the liquidation stores are paid a percentage of the sales. “That’s the beauty of the system for Amazon,” LeVasseur explained, “They can liquidate and have quick growth of genuine additional things that they were not able to sell.”
Returns and surplus inventory have become unavoidable as online shopping has gained popularity. FBA liquidations assist FBA sellers in recouping the value of their products. Sellers can also avoid paying Amazon warehouse storage costs for old inventory. In a word, the FBA liquidation program is a cost-effective and lucrative way to get rid of unsold and returned merchandise.
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In case you missed it:
- China Sourcing Update 2022: What’s new and what’s changed?
- Jungle Scout consumer trends report in quarter 1 of 2022
- Walmart Fulfillment Services Offers Incentives for New Sellers, Trust, and Transparency for All
- Live Training on April 7th, 2022 at 8PM EST with Don Henig of AccrueMe
- We’re looking for an Executive Assistant!
Have a great weekend!