Prepare for the 2022 Chinese New Year Supply Chain Disruption Impact

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If you outsource products from China, you’re probably familiar with the Chinese New Year (CNY) – the largest national holiday of China, also known well as Lunar New Year or Spring Festival. Like Christmas or Thanksgiving in many countries around the world, Chinese New Year is the family reunion time. People will have a public holiday that lasts about one week, from January 31th, 2022 to February 6th, 2022.

However, the Chinese New Year in 2022 is quite different from past years. All businesses should be prepared for any situation, especially for Amazon sellers and eCommerce businesses.

Why is this year so different from the others?

The first is the demand, which came as a shock as the epidemic itself. Consumers are requesting online orders because they are safer and more convenient. Unfortunately, many businesses are simply unprepared for this reality and continue to operate according to outdated methods. Furthermore, the logistics system as a whole has been caught off guard, resulting in a shortage of shipping space. The shipping industry has to deal with the logistical issues produced by the Chinese New Year every year.

During the Spring Festival, many manufacturers will be closed and even when the holiday end and factories are opened, the recovery of production abilities is still slow. Lots of things are under adjustment. “Chinese New Year has always been a big disrupter in the global supply chain as many factories and businesses will shut down up to 10 days or longer to allow the employees to return to their families and to celebrate“, said Forbes. That’s why Amazon sellers and other businesses should give themselves time to recover and readjust to the new beginning. The recommendation is to plan ahead for your inventory for about six weeks of supply chain disruption. Added with the continuing effects of Covid-19, sellers should do more and get ready for the upcoming new demands of the market.

Here are a few suggestions for Amazon sellers and businesses to plan ahead and manage around Chinese New Year:

  • Forecast your sales to plan ahead: Using sales analytics tools to systematically forecast your next few weeks’ sales and place the order to your stable suppliers. Make sure your inventory can make it through supply chain disruption.
  • Create time to ramp back up of your products inventory: Don’t expect you can recover or restock your products immediately from your supplier chain after the holidays.
  • Build strong relationships: Strong connections with your Chinese suppliers and contract manufacturers lead to collaboration and information exchange, which can help you keep track of the status of orders in the pipeline.
  • Plan for other options: Alternate sourcing options that tap providers outside of China can help you reduce or even eliminate risk. This is useful not only during Chinese New Year but all year round.
  • Don’t wait until the last minute to place your order: If you wait until the last minute to place your order ahead of Chinese New Year, you won’t get it in time. Due to rushed orders and great demand, there’s a potential your item will be degraded in quality.
  • Double Check Freight Forwarders’ Capacity and Pricing: Work with your familiar forwarders or logistics to book and confirm transportation shipments in advance of Chinese New Year and this will help you avoid the shipping costs increase.
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