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The 2019 Novel Coronavirus (2019-nCoV, or COVID-19) is a coronavirus identified as the cause of an outbreak of respiratory illness first detected in Wuhan, China. As the outbreak evolves, we have been heard questions and concerns from dropshippers over the past days, and would like to answer questions both about the outbreak and how it would affect dropshipping. Here are some key points:
What does coronavirus mean for dropshipping?
- Dropshippers who use AliExpress should look for alternatives urgently as almost all AliExpress sellers aren’t able to resume work.
- Many factories aren’t back to production yet; on average factories estimate to deliver first batch of products in mid-March.
- Dropshippers should make cost-profit analysis carefully, as shipping fee in China has risen. (around $3 on average); International shipping lead time is not affected.
- Sellers should select lighter and smaller products to save shipping cost; keep current campaigns and hold your projects on launching new products
- Secure your stock with down payment. Extend promised delivery time and give coupon to customers
Now Let’s look at them one by one. The most addressed question first –
Do packages from China spread coronavirus? How does the coronavirus spread?
Short answer is that packages from China doesn’t spread coronavirus, normally.
The virus doesn’t survive longer than a few hours after it leaves a host (live animal or human, in this case). Even it does, ‘surviving’ doesn’t mean it’s actively infectious, as it may have lost its activity plus the concentrations of virus doesn’t meet the minimum bar of infection. Delivery takes much longer than that so there’s basically no concerns for getting contagious by assigning packages. But it’s always good to clean and disinfect surface with disinfectant that contains at least 75% alcohol.
What’s the situation in China? What actions does China take?
On January 30, the WHO declared the coronavirus outbreak a public-health emergency of international concern (PHEIC).
The Chinese government and the Chinese people rapidly took actions to prevent the coronavirus from further spreading, treat infected patients, and cooperates closely with WHO. Here’s a short list of summary:
- Shutdown public transportations in all Hubei Province (which surrounds Wuhan), including highway, airplanes, and railways
- Extend Chinese New Year holiday to February 3rd national wide; Guangdong and Zhejiang extend it to February 9th; Hubei extends it to February 14th. This eliminates person-to-person transmission and postpone back-to-work and back-to-school.
- Temperature check at every checkpoint national wide;
- Two special hospitals are to be built in 10 days as special ward for the infected patients
- Conduct studies on the severity and transmissibility of the virus, share data and biological material, and vaccine research
Strong public health measures have been taken across China. Quoting Dr. Tedros, WHO Director-General, “I have never in my life seen this kind of mobilization.”
Everyone who walks out of the door are required to wear facial mask. People are required stay at home to prevent person-to-person transmission. Due to the deadly nature and strong transmission of the virus, we estimate to see turning point around two months.
Now let’s answer the question:
What Does The Coronavirus Mean For Dropshipping?
This means short of stock, rise of cost, and delay of shipping for at least until mid-March. Every quote you get before the outbreak could become invalid. Please re-confirm with your supplier.
Are my suppliers and shipping handlers back to work?
Dropshippers who use AliExpress should look for alternatives urgently as almost all AliExpress sellers aren’t able to resume work.
This outbreak tests world’s dependency on China, obviously. If you’ve run out of stock, your supplier cannot manage to schedule production until February 10th. And most factories are not able to resume production until end of February. Here’s why:
China has extended the national holiday. Factories and companies are required to prepare masks and necessary equipment and must pass government’s onsite inspection; failed to follow the rule might cause shutdown. What we know is that 90% of factories aren’t back to work yet as of mid-February.
Due to lack of raw material and labour, and long process of getting resume-work permit, on average, factories estimate to deliver first batch of products in mid-March.
How should I adjust ads budget and campaigns?
Dropshippers should make cost-profit analysis carefully, as shipping fee in China has risen. (around $3 on average); while international shipping lead time is not much affected.
While we predict the government would continue the strict measures on transportation and public health measures, the price of raw material would rise, and efficiency of logistics would be decreased.
We strongly suggest dropshippers contact supplier for most updated and accurate information on inventory, productivity and quotes.
In the meanwhile, lower your campaign budget to avoid too many back orders as well as saving expense. Try to sell those lighter and smaller products as the shipping cost inside China might become significant part of budget.
Shall dropshippers launch new products during coronavirus outbreak?
Sellers should select lighter and smaller products to save shipping cost; keep current campaigns and hold your projects on launching new products
We suggest hold your plan for new products until end of February. If you do have to do so, select lighter and smaller products; secure your stock with down payment, and extend promised delivery time.
Make pre-sale if you can. As said, it might take weeks for you to get stock from factories after placing orders with them.
What should dropshippers do to secure stock and get inventory during coronavirus outbreak?
For those who use AliExpress for dropshipping, it’s code RED now as most AliExpress sellers are resellers and they fail to get hold of stock. AliExpress extended the fulfillment time requirement too.
Dropshippers should work with reliable vendor that can connect you and factories that are back to production. HyperSKU works with factories directly and already helped our clients to get stock and fulfill orders. Currently we are capable of processing thousands of orders per day.