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The Dropshipping Guide to the 2021 Holiday Season

Blog, eCommerce Insights | October 27, 2021

The shopping season is just around the corner, and for dropshipping entrepreneurs, this means a time for celebration and hard work. Over the years, it’s been proven to be one of the most profitable times of the year for eCommerce merchants to do business in China, but this doesn’t mean it will be all smooth sailing.

 

In fact, unfavorable market conditions could present significant problems during the shopping season, which is why it’s essential to be as prepared as possible for this upcoming holiday season.

 

In our guide to the 2021 holiday season, we’ll discuss some of these issues and how they could affect your eCommerce store. We’ll also take a look at various strategies you can consider to make the most out of this holiday period and some key things you’ll need to implement to prepare yourself for the upcoming season.

 

Current Market Issues

As global economies continue to reemerge from the COVID-19 pandemic, once-empty supply chains are feeling the strain of a sudden surge in consumer demands. This phenomenon has been particularly prominent in China, where businesses have struggled to keep up with the high demand for goods from domestic and international shoppers alike.

 

The current global market realities have made it necessary for dropshippers to stay ahead of current trends to remain competitive. Here are the top issues of concern that can hinder your success this holiday season if you aren’t prepared:

 

1. A Global Supply Chain Shortage

The COVID-19 pandemic put a strain on global supply chains in ways we have never seen before. Imagine unplugging and plugging back in the global economy, and you can see how there are still kinks that need to be worked out.

 

For the 2021 holiday season, demand for goods will likely continue to rise at an unprecedented rate while cargo ships and truck drivers sit stalled in an economy struggling to cope.

 

The difficulty of freight shipping can have a significant impact on business for both suppliers and eCommerce merchants, but the latter will be hit particularly hard if they aren’t prepared.

 

2. Energy Shortages

In China and around the world, energy shortages have led to surging prices and power rationing, which has pushed factories to cut production and led to a drop in manufacturing activity.

 

This will naturally lead to a shortage of goods, but logistics companies are also bracing themselves for potential problems. It’s likely that there won’t be enough fuel or sufficient workforce to deal with the influx of holiday packages that usually flood delivery services during 2021 shopping season.

 

3. Sea and Air Freight Costs are Rising

With the strain on the supply chain, the cost of shipping goods by sea and air has spiked. This is a major issue for eCommerce merchants, who will need to factor this increased cost into their product pricing.

 

The COVID-19 pandemic increased demand for goods, which left suppliers struggling to keep up with pre-pandemic consumer expectations. This led to an increase in prices for raw materials, which naturally led to increases in the final price of goods.

 

The 2021 holiday season is already expensive enough as it is, so merchants will need to figure out ways to overcome this hurdle if they don’t want to lose out on sales.

 

4. Labor Shortages

In the wake of COVID-19, many people have lost jobs due to factory closings and other issues within the global supply chain. This has led to a labor shortage, leaving companies scrambling to hire staff before the holiday season hits.

 

This will be a problem for eCommerce merchants as well, who may need additional help with packaging and processing orders during this time of year. Many potential hires will be reluctant to work overtime, which could lead to problems with completing orders before the holiday period.

 

What This Means For Shoppers

So what do these global market concerns mean for consumers?

 

In short, shoppers are bracing themselves for longer wait times and increased costs. Prices will be higher for products this 2021 holiday season, and shipping is likely to disappoint more than a few buyers. Plus, as companies try to cope with shortages and energy costs, there’s a good chance that consumers won’t enjoy as many deals as they have in the past.

 

Rather than wait on products that may not arrive on time, many shoppers may opt to spend more money on fewer items. This will raise the level of competition for brands trying to reach shoppers.

 

How Dropshippers Can Win Holiday Season 2021

The market conditions can seem overwhelming. However, dropshippers who are creative and strategic can come out on top – if they have the right strategy. Here are our tips for how to win holiday season 2021!

 

1. Buy Plenty of Stock In Advance

 

When it comes to dropshipping, the best strategy is to keep plenty of stock on hand. This way, even if deliveries are delayed (and they probably will be) you’ll still have products available for your customers. Stock your winning products (or most popular sizes and colors) is the most cost-effective strategy.

 

2. Explore and Expand Your Marketing Strategies

With the iOS updates impacting Facebook ads largely, it’s important to explore new marketing channels and strategies, particularly during the holiday season. In a competitive market with increased consumer expectations, it’s vital that you’re able to connect with your customers in fun and engaging ways that meet their needs. Try influencer marketing and content marketing to broad your reach and communicate in a more engaging way.

 

3. Provide Superior Customer Service

In a world where most people have come to expect instant gratification, one of the most effective ways to stand out is to offer superior customer service. Make sure that your customers know they’re valued and appreciated by giving them fast, personalized service even during this busy time of year.

 

This includes implementing a loyalty program that rewards your best customers for shopping with you and encouraging them to tell their friends about your products.

 

However, this shouldn’t come at the expense of customer service – meaning that if a customer expects a product soon but won’t have it in time for the holiday, they should still be treated well and respected.

 

4. Invest in Fast and Reliable Shipping

Even if you can find ways to overcome challenges in the market, your customers may still end up disappointed with their products. If that happens and they believe their product was late due to shipping issues (or anything else) they will be far less likely to shop with you again.

 

As a result, it’s important to invest in fast and reliable shipping – even if you have to spend more money. It will be well worth it in the long run because it could lead to increased sales and long-term customer loyalty.

 

It’s Not Too Late To Prepare for Chinese New Year 2022!

While the current market conditions are expected to create some challenges, it’s not too late to prepare for Chinese New Year 2022.

 

The best thing you can do right now is to keep your inventory levels well maintained so you don’t find yourself scrambling before the holiday season hits. Consider stocking up a month in advance at least to prepare for factory shutdowns during the four-week holiday.

 

You should also start exploring new marketing channels and potential customer segments that may be receptive to your brand at this time of year. Some good places to start are via social media, SEO, and email marketing.

 

By preparing now, you can enjoy an enjoyable, profitable season!

 

Want to learn more? Visit HyperSKU online today to discover how our industry-leading dropshipping platform can help you take your business to the next level.

 

Visit HyperSKU online today to learn more, and plan today for the best holiday season on record!