China is the second-largest economy in the world, with a second-highest GDP of 19.3%. This means that anything that happens in China CAN and HAS a ripple effect on the global economy.
The recent breakout of Coronavirus, aka COVID-19 in China, is having a severe impact on overall businesses, including eCommerce and dropshipping business.
Now, you might say that not all eCommerce businesses order products from China, but let’s face the truth that even your suppliers based in the U.S. tend to originally avail the products from China and then sell it to you.
Also, China manufactures several high-end products for giant companies like Apple, Microsoft, Samsung, etc. So, either way, the majority of products sold in the U.S. are directly or indirectly procured from China.
The U.S. imported worth $ 452.24 Billion from China in the year 2019.
The outbreak of COVID-19 is having a profound impact on countries like the U.S. and several European countries.
As the Chinese government has quarantined one half of its population to curb the spreading of the virus, the companies are witnessing a breakdown of the supply chain across multiple industries, disrupted manufacturing, empty stores in the U.S.
Solutions for eCommerce merchants, Drop-shippers and Retailers
In such times of crisis, it is essential to come up with practically viable solutions.
According to Marco Baatjes, an eCommerce entrepreneur and founder of the blog Bottom Line Cents opines that,
I thought it (coronavirus) was initially a threat; however, this is just like any other obstacle that you face while doing business, you need to develop solutions to overcome these obstacles, or you face your dropshipping business failing.
Keeping this mind, I researched and compiled some of the best solutions that I came across from real entrepreneurs who are facing the same business challenges. Here they are:
Solution #1 Provide special offers or discount to your customers with pending orders
Providing discounts or special offers is quite a good strategy to retain your customers and sail through your business in difficult times like these, which are beyond your control.
This is one the tried and tested method by one of the drop-shippers,
I emailed each customer personally with a note that there would be a delay and offered them a discount on their next order. I’ve clearly given each person an option to cancel their order too.
The business person further remarked that this strategy allowed her to have zero-order cancellation.
Another entrepreneur offered a high-value service for free to retain clients due to a shortage of supplies.
Yes, we ran out of stock due to delays in shipping from China. There is now a severe shortage of custom flash drives in the U.S. In our case, we have systems in place to cover the shortfall by providing a higher valued service without charging more. – says Mitch from ScanMyPhotos.com.
Solution #2 Look for suppliers having a warehouse outside of China
Marco Baatjes, one of the entrepreneurs quoted earlier, recommends having suppliers from within your country to avoid any shipment delays.
To avoid timely delays in shipment, the best bet is to find a local supplier who can fulfill the order. Most business dropship from Aliexpress, so a good idea would be to find if there is a fulfillment company in the country you target, for example, my target market is the United States, and for all my products I’m ensuring that I can find suppliers based in the states to fulfill the product. It costs slightly more than shipping from China; however, as a store owner, you can adjust the margins to recoup the loss of profit due to increased fulfillment costs.
However, he also suggests that in case if you are ordering your products from China, then it is better to go ‘ePacket’ services as it allows you to track the shipment online. Other delivery services from China don’t have the live tracking facility, and hence you tend to be waiting for your cargo in obscurity.
Solution #3 Contact your suppliers
One of the best ways to track your shipment or to know when it is going to arrive is by staying in touch with your suppliers.
If you have Chinese suppliers, then ask them about the situation there, and they will let you know if they can deliver you the shipment at the moment or not. They can also provide you information on the estimated time it might take for them to process your order.
This direct communication with the suppliers will give you a fair idea about how much delayed your shipments will be, and thus you can inform your customers accordingly.
However, selecting the suppliers from your own country can also not be a perfect solution at this time. Here’s what one of the US-based entrepreneurs, Stacy Caprio had to say,
I order the majority of products from US-based suppliers. However, my U.S. suppliers order some of their products from China, and I was only able to get half of my last desired shipment from my U.S. supplier due to the Coronavirus delays.
So the key is to often communicate with your suppliers and stay up-to-date about your order processing and shipment details.
Solution # 4 Stop sponsored ads Temporarily
It is highly recommended to temporarily close down your sponsored content since you don’t want to take more online orders that you cannot fulfill.
Many Chinese industries are now opening again gradually as the situation is getting in control, but it still hasn’t started working in full capacity as not all workers are back yet. Therefore, Chinese suppliers will take a while to begin processing your orders and fulfilling them.
Pausing your ad campaigns for a while will help you decrease your spending and thereby saving your money for future advertising.
Solution # 5 Inform your customers about the delayed shipping
Shipping management is a crucial part when there are major disruptions in the supply chain. And more importantly, it is essential to keep your customers well informed about the delayed shipping.
Most of the entrepreneurs and drop-shippers contacted their customers and made them aware of the situation. I’m sure your customers will surely understand the delayed shipment due to this epidemic. A heads-up in this matter will be appreciated by your customers and will increase their trust in you.
At the same time, it is important also to assure them that the Coronavirus thrives only in human hosts, and no packages contain the virus. Hence, any package delivered to them will be free of viral infection.
Solution #6 Expand product range with available items nearby
Alternate products or similar products of different brands are always available in the market. Look for the products that are similar to your products and are easily available from your local suppliers. This will enable you to fulfill your customer’s orders even in the critical times as this and as well as help you expand your product offering range.
Key Takeaways from Coronavirus crisis:
- Always have alternate suppliers from different countries so that your business doesn’t suffer if one supplier stops sending the goods due to unforeseen circumstances.
- Maintaining a safety stock on a regular basis is a good contingency plan to overcome difficult situations. You can run your business smoothly even if there are temporary disruptions in the supply chain if you maintain a decent safety stock with you at all times.
- Business tracking and forecasting are all the more important. The regular reporting cycles enables you to prepare for unprecedented situations. Forecasting allows you to find out the business areas that are weak and can be affected, and help you to mitigate this problem.
- Rethink your marketing strategy for the time being and try to change customer behavior or diversify your customer base.
- Cross-train your staff so that you can run the show at all times, including at a crucial time like this when you are understaffed due to a Coronavirus threat. Training all the staff members to do all kinds of tasks makes them capable enough to handle multiple tasks across departments. Therefore, they can work efficiently in all departments in the absence of the other staff members, and also reduce dependency on a particular department for getting the work done.
Hoping these practical tips will help you to curb the negative impact of Coronavirus on your business.
I’d like to hear from you if you have any suggestions or solutions to overcome this problem.
Please share your experiences, suggestions, and opinions in the comments.