Start the Year Right: Bypassing Common Chinese New Year Problems

As we grow closer to the end of Amazon’s shopping season, it’s important to have a strategy in place to continue driving sales for the Chinese New Year.

If you are sourcing products from China, Chinese New Year is one big holiday you need to be aware of and plan around. Being the longest holiday in China, CNY can be a very challenging time with lots of missed revenue if you don’t plan ahead.

Here are a few tips to ensure the sales momentum you gained throughout the holidays will be sustained over the next year.

Check the Capacity of Your Supplier

The first thing you should do is email your contact at the factory and ask them these questions:

• When is the office closing for CNY?
• When is the factory closing for CNY?
• What is the latest date to place a new order and expect it to ship before the long holiday?

Offices are likely to be closed for 7–10 days as they are quite often managed by local workers from the city. Conversely, CNY sees the largest migration of people in the world, with over 100 million people traveling across the holiday period. Factory workers often travel to their place of work from another province, so it’s common for factories to be closed for 3–4 weeks. Also, CNY causes a backlog of orders and a heavy delay in lead times, so be clear with production and your supplier’s capacity during this time.

Always communicate with your supplier during the production process to make sure everything is on schedule.

Do Pre-Shipment Inspections

Because workers are excited to go home, some sellers encounter quality issues with orders right before the Chinese New Year. To avoid this pitfall, it’s very important that you conduct pre-shipment inspections. (Granted, this should be common practice for all your orders, but bearing CNY in mind, it’s all the more critical to be especially thorough around January and February.)

Double-Check Freight Forwarders’ Capacity and Pricing

Due to the surge of orders going out just before CNY, shipping companies experience increased demand for transport containers. Freight forwarders’ pricing is greatly affected by supply vs. demand – available cargo space on shipping vessels vs. the number of containers being booked for shipment – and as such, weeks before CNY is the most expensive time of the year to ship goods.

With all this in mind, it’s best to confirm the pricing for shipment from your freight forwarder beforehand; if the price is significantly higher than usual, it can negatively affect your profit margins, so you may opt to ship out once the shipping prices have stabilized.

Moreover, Amazon warehouses and 3PL storage can become full and expensive as well, so it’s best to verify availability with your chosen fulfillment company and find out if they can even handle your order at the time.

Forecast Orders

The best way to prevent quality issues, delayed orders, and inflated shipping prices is to plan ahead and give your supplier a projection of your orders at the start of the year. Be sure to leverage learnings from last year’s data – such previous data can provide critical insight as you map out your inventory planning and optimization strategies for the next few months. Take a look at which of your products and campaigns performed best (and worst), applying those learnings to your New Year sales plan.

Preparing Your Logistics for CNY

Developing a precise plan to avoid running out of stock can be challenging. Even seasoned logistics experts experience the chaos of CNY and have been taken by surprise.

As an Amazon FBA seller, it’s important that you’re aware of this long holiday, along with its associated effects, and plan accordingly. You don’t want to back yourself into the “out of stock” corner and frantically try to send products to Amazon warehouses via air freight.

Plan very conservatively. You may need to pay higher storage fees (3PL) for the month of February just to ensure your products can be quickly sent to the Amazon warehouse when needed.

To ensure that your goods leave China before the chaos, start shipping your products as soon as mid-December or early January.

Starting the Year Right

If you haven’t had the time or capacity to develop a solid plan for this next year… have no fear! Consider the tips outlined above and use the next couple of weeks to take action where possible. Focus on your top-selling products, as those will really move the needle throughout the balance of 2022.

If you need help in developing or amplifying your Amazon strategy to drive significant growth in the New Year, book a call with us!