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For dropshipping businesses that source and manufacture products from China, you must be familiar with Lunar New Year or also called Chinese New Year (abbreviated as CNY). Many dropshipping sellers understand that the Chinese New Year has a big impact on production, supply chains, and shipping times. They have also experienced product shortages, shipping delays, and complaints from customers. Especially this year’s CNY is earlier than ever, but you will find out this can be a time full of opportunities if you have prepared well enough.
So let’s help you understand what to expect and how to put together in advance for CNY of 2023!
What is Chinese New Year?
Chinese New Year is most known as the Lunar New Year, an annual 15-day festival in China and Chinese communities around the world. Since the mid-1990s, people in China are given 7 days off to celebrate this national spring festival with their families. Some factories will give a longer period of holidays for workers to travel and reunion with their families after a year of hard work.
This means that most businesses including factories, companies, logistics, and shops will be shut down for at least seven days during the Chinese New Year.
For international e-commerce business owners, now is the time to take notice of this holiday and find out about the major timelines of CNY 2023.
Photo from Unsplash
What are the timelines for CNY 2023?
Chinese New Year begins on January 22, 2023, and ends on February 5, 2023.
Here are the general key dates to keep in mind:
- Beginning of January: Businesses are starting to slow down and some factories are closing early
- January 21st, New Year’s Eve: All employees will leave their office
- January 22nd, New Year: Chinese New Year celebration begins
- January 27th: Chinese New Year ends
- End of January: Employees are gradually returning to work
- February 8th, The Lantern festival: which marks the end of the 15-day New Year Celebration
- End of February: Most employees including the factories have returned to work
All the businesses in China are expected to return to normal by then.
How would it affect my eCommerce business?
For all eCommerce business that relies on manufacturing in China or other countries that celebrate Chinese New Year, your business would probably be affected by the shutdown during the holiday. Even if only one step of your supply chain is from China, your will need to notice the major impacts that may affect your eCommerce business.
1. Delays in production
During the Chinese New Year holiday, all factories will be closed and employees would go home for about 2 weeks and up. Since some factories claim that they leaving earlier this year, you will be expecting production to slow down starting at the beginning of January.
As a result, some of your suppliers might close earlier than others and you will need to take extra time to find another suitable supplier, which lead to manufacturing delays for your orders during this time.
2. Out of stock
Many factories will clear their inventory near the end of the year and start preparing for the new stock after the holiday. So if you are planning to ship out products from the suppliers during this time, there is a chance that they will be out of stock. As another result, you will need to wait for at least 2 weeks or longer for your Chinese supplier to start preparing your stock after they return to work.
3. Shortage in the workforce due to the Covid epidemic
China has just released a zero-COVID policy for 2023 which may cause other impacts on the Chinese New Year. Currently, after the release of Covid control, the rising positive cases in China have significantly lowered the workforce in China. Workers from all different fields had to take 3-7 days off accordingly to get recover from Covid and before getting back to work.
4. Delays in shipment
Since we know that the Chinese New Year is starting earlier this year, most business would increase their production in advance to pre-stock their inventory.
This often leads to an overload of shipments before the holiday begins and your shipment might be delayed due to the buildup from before and after the holiday. Even if you have planned ahead and stocked up some inventory with your suppliers during the Chinese New Year, your shipment may still encounter several days of delay.
Photo from Unsplash
How to get ahead of these potential delays
Keep in mind that we can not be fully prepared for what will happen during this time of the year, but we can try our best to minimize the harm that may cause to our eCommerce business. Make sure you follow these tips and advice accordingly to help you maximize your business during the Chinese New Year!
1. Increase inventory in advance
One of the best pieces of advice is to stock up your holiday inventory before the holiday like the squirrels. It’s always better to be over-prepared with your most popular products to avoid the potential of running out or having to wait.
For those of you who are planning to sell customized goods or seasonal goods for Valentine’s Day and springtime, it is especially necessary to prepare ahead. Since it will take approximately a few weeks for your manufacturers to produce at a normal speed. To ensure your seasonal goods can arrive on time, it’s best to make sure you have enough of the important inventory.
2. Take advantage of China Warehouse
Even though most of your suppliers have gone home during the CNY, you can purchase enough stock and store them at our China warehouse. This way you can skip the hassle of running out of stock and whenever your customer place orders, the warehouse staff can process and ship them out to your customers immediately.
One way to help you predict how much inventory you should stock in advance is to find out from your monthly order volume. Some successful dropshippers would even have a month and a half of stock ready to allow more flexibility in case the manufacturer needs extra time after the New Year.
3. Keep in touch with your supplier and shipping company
It’s a good habit for dropshippers to keep close contact with your supplier and shipping company because you have skipped the steps to arrange to ship or produce the product on your own and there is a great chance that you will miss some important information in between.
Keep track of things like when your supplier factory will be closed or if any fast shipping channels have become unavailable. It might get difficult because most shipping companies or factories don’t have enough staff or time to send out an advance notice, you can at least stay tuned to when they will be off from January to February.
4. Find Trustworthy Fulfillment Service Provider – HyperSKU
If you are looking for an experienced and trustworthy fulfillment service provider, HyperSKU will be your best helper!
Our team will help you find the best solution under all circumstances. We can give you professional advice and service from sourcing, order fulfillment, product customization, and inventory stocking to shipping. We have over 7 warehouses to help ease the stress of any possible Covid shutdown during the Chinese New Year.
You will be serviced by a dedicated team of up to 3 agents including support, sales, and account manager. Furthermore, our team will help you to get the best price we can during this time since many Chinese factories are clearing their stock a the end of the year.
To ensure you will enjoy another year of great service, our team will be taking a break from January 21st to 27th, 2023. However, we value your business even during this time, our team will take shifts to help you check your orders. HyperSKU will arrange for staff to help answer any urgent inquiries via chatbox.
Please see our holiday arrangement in this article.
Happy New Year and Happy dropshipping!