Tips for Amazon Inventory Management Before Chinese New Year

If you’re a seller on Amazon, you know the importance of maintaining a good inventory. It’s vital to meeting customer demand, staying ahead of your competitors, and maximizing your revenue and profits. A strong relationship with your suppliers is essential — you rely on them to provide the right products at the right time, so you don’t miss out on any Amazon sales. That’s why at this time of year it’s important to understand the impact Chinese New Year will have on your Amazon business and importing inventory from overseas suppliers such as Alibaba.

When is Chinese New Year?

The Chinese New Year, known as Spring Festival, falls on the new moon between January 21 and February 20. Over the next few years, that date is:

2017 — January 28, 2017
2018 — February 16, 2018
2019 — February 5, 2019
2020 — January 25, 2020
2021 — February 12, 2021

These dates are important because Chinese New Year is China’s most celebrated holiday. Chinese companies will typically be closed over this period so workers can travel to their hometowns to spend time and celebrate with family. As a result, shipments from Chinese suppliers like Alibaba may be delayed over the Chinese New Year period, which can have an impact on your Amazon inventory.

Alibaba and other Chinese suppliers

With the impending Chinese New Year holiday causing potential delays, you’ll need to account for several factors if you import your Amazon inventory from China and want to keep your Amazon inventory healthy. If you’re sourcing goods from China, the chances are you’re using Alibaba or a similar centralized marketplace to import products to sell on Amazon. Other popular Chinese sites to import goods other than Alibaba include:

What is Alibaba?

Alibaba is one of the largest online marketplaces in the world, often referred to as the “Chinese Amazon.” It was founded in 1999 and predominantly serves Chinese manufacturers, suppliers, exporters and importers. It gives Chinese and international buyers a centralized marketplace where they can list products for sale, and approximately 434 million people use the service every year. Many retailers around the world source goods through Alibaba and then sell them on Amazon at a profit. Due to the huge size and influence of Alibaba, they’re often the first choice when it comes to sourcing imported goods from China at inexpensive prices.

Alibaba and Amazon

Amazon Sellers Alibaba and Amazon are a natural partnership for Amazon sellers. Due to the very competitive pricing on Alibaba products, even factoring in the cost of shipping and time in waiting for inventory, sellers can make a healthy profit selling on the Amazon marketplace. The trick is to find popular products on Amazon that you can source at a low price on Alibaba and give you a healthy profit margin.

How Chinese New Year Could Delay Your Inventory Shipments

Many suppliers will close for Chinese New Year and the days surrounding it. As a result you’re likely to see delays of several weeks when it comes to sourcing goods. Coupled with the lead time for international shipping through DHL, FEDEX and UPS, this may mean you don’t have the inventory you need to meet demand. You can avoid these problems by taking active steps now.

How to avoid issues with sourcing goods from China over Chinese New Year

Here’s a step-by-step guide to avoid inventory issues over Chinese New Year when you’re sourcing from Chinese import sites such as Alibaba and selling on Amazon.

1: Understand Likely Demand for Each of Your Products

Look at your historic Amazon sales reports to understand how much you’re selling of each item. Take seasonal variations into account and calculate roughly how many units you’re shifting on a monthly basis. Don’t forget to take account of year-on-year increases in customer demand.

2: Identify Which Products Come from China

For each of your products identify where you source it from. Highlight all the inventory that you order from China.

3: Look at Your Existing Stock Levels for Each Item

Establish your current stock levels for each item. If you sell direct, you can complete a simple stock check or look at your inventory management software. If you use Fulfillment By Amazon (FBA), use their interface to track inventory levels.

4: Use Sales Figures to Predict How Long Your Current Inventory Will Last

Based on your current inventory levels and demand, calculate approximate dates for when you are likely to run out of inventory for each item.

5: Account for Additional Lead Times

Understand the typical lead times you have for international shipping, logistics, and distribution. If you use FBA, you’ll also need to take account of the lead time between when it arrives at the Amazon warehouse, and when it will be available for sale. If you order too late, you might have to pay additional fees for rush shipping.

6: Factor in a Delay of a Week for Closure over Chinese New Year

If you’re going to run out of stock in the weeks leading up to or following Chinese New Year, you will need to order extra stock now. Estimate a delay of about a week for orders that you’re putting in during the Chinese New Year holiday.

7: Make an Order with Your Chinese Import Supplier Through Alibaba

Now it’s time to put your order in. Make the order with your Chinese supplier and follow up to ensure they can ship it out to you before Chinese New Year.

8: Put a Note in Your Calendar to Do the Same Thing Next Year

The date of Chinese New Year changes every year, so if you add reminders to your calendar now you’ll already be ahead of schedule for next year.

Get Accelerated Amazon Invoice Payments to Cover Extra Inventory

You may need to release some extra cash into your Amazon business to pay ahead for inventory to avoid any delays caused by Chinese New Year. The two week payment term from Amazon can hinder your ability to have the necessary working capital to cover extra Amazon inventory costs. But, that’s where Payability can help. For a low fee, you get next day access to your Amazon sales. That way you can get the cash flow cushion you need to put in a larger order for your Amazon inventory and avoid Chinese New Year delays.

This simple, step-by-step guide will make sure you have enough inventory to meet customer demand and avoid lost sales. By understanding the impact of Chinese New Year, you can easily avoid delays, maintain healthy inventory levels, and maximize your profits. Check out this guide with additional tips on how to import and sell Chinese goods.

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