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The Chinese New Year of 2022 will start at the end of January, so why blog about it in November? You may ask. If you think now is too early for this topic, then you have no idea how effective this traditional festival could be for your business.
In this article, we are going to talk about this traditional festival and its effects on eCommerce from three perspectives.
Ⅰ. A brief introduction of CNY.
Ⅱ. Why would CNY affect your dropshipping business?
Ⅲ. How to avoid the impact of CNY?
The Chinese New Year, also known as the Lunar New Year, or Spring Festival, is the world's largest annual human migration. Chinese people have this strong belief in going back home to reunite with families for the spring festival. If you understand the phenomenon of Thanksgiving in the US, then just multiply the obsessiveness by ten. Technically speaking, this public holiday lasts for seven days, but the real situation can be extended way longer.
To most people, especially those who work in the factories, the spring festival is the one time of the year to get back home and visit their families. Thus it's no surprise every year around that time, everything will be paused for at least one week. And to dropshippers, the impact of this time-out will be majorly presented in 4 aspects.
On average, factories in China slow down the production 10-15 days before the holiday begins officially, which is the CNY's eve, as a lot of workers will ask for leave to extend the holiday. And because the stability of labor in the manufacturing industry is pretty poor, there normally would be a production low-ebb for one or two weeks after the holiday, many people will just take spring festival as a turning point and try to get a new job after the holiday, which will cause a labor shortage in manufacturers that slows down the producing.
FYI： We’ve received the notice that the Yiwu government plans to cut power outages in factories in mid-December, which will affect the whole city’s production, needless to say, the supply ability will get shortened even further.
The drastic decrease of labor during the Chinese New Year will not only cause the suspension of production but also a huge delay in shipping. The shipping fee during the spring festival is already expensive, but even if you are willing to bear the high expense, it’s still not guaranteed that you can get your products shipped out on time, cause the shipping lines will be cut off significantly too. The best-case scenario will be a shipping delay of a week or two, the worst-case scenario could be something like three weeks without any shipment, which means you'll have difficulties with your store's deliverability until the beginning of March.
During the Chinese New Year, it's going to be really difficult for dropshippers to get in touch with the supplier or shipping company for at least a whole week. Lack of communication will also lead your dropshipping business to a dilemma - if you have any emergent needs, you'll have no one to go to.
Along with the weather keeps getting cold, the pandemic has this trend of getting worse. The possible coming outbreak also contains a huge potential risk of both production and shipping.
Since the spring festival is normally close to Valentine's day, if you sell products related to this setting, for example, lingeries, you might miss a great opportunity of making more sales due to the CNY impact.
To avoid the stockout and tons of customer complaints and shipping delays, the most efficient solution is to stock your products in overseas warehouses in advance.
1. Having an enough supply when there’s a demand from customers during the CNY
2. Making sure your business doesn’t shrink during the CNY
3. Saving a lot of money on shipping and order processing
4. Gaining more brand reputation from happy customers
5. Standing out from the crowd, defeat your unprepared competitors
Spring festival is not a good time to scale the business, as soon as your supply chain is back to normal, you can then continue the promotion safely and efficiently.
Don't forget to notify your customers of possible delays in advance, you can set a notification in your store or send out reminding emails, and stay active to reply to concerns and messages.
Not only CJdropshipping will still arrange a team on shift throughout the CNY, but we also launched a new feature recently, to help you combat the CNY impacts.
Take this Husky Pillow as an example:
As you can see, both these two options offer a much better price with three different MOQ standards.
1. If you choose wholesale, the product will be sent to the appointed address, such as your own warehouse or even Amazon FBA warehouses. In this case, you’ll have more control over the packaging and shipment. If the platform you are using has a relatively high requirement on delivery time, such as Etsy, eBay, or Shopee, or your business also includes offline retail, then this purchase option will be a brilliant solution for your business.
2. If you choose to preorder, you can choose to store the product in any one of our seven warehouses worldwide- 4 in China, 2 in the US, and 1 in Germany.
Preorder with our China warehouses is shipping-free, you don’t have to worry about the scarce of supply or the long processing time anymore. The factory will deliver the goods to CJ’s warehouse within an extremely short time for free and we will get the inspection done once the product is in our warehouse, which saves a lot of time on processing.
However, preordering to China warehouses only saves time on domestic shipping and fulfillment, if you want to get the cross-border delivery done during the spring festival, the best choice is still to pre-stock in our overseas warehouses.
Using CJ’s overseas warehouses to pre-stock for your hot selling products is the safest way to guarantee your business’s smooth operation during the CNY. Take our US warehouses as an example, and it has more than 4000 kinds of products in stock and is ready to deliver within 2-5 days.
Above is all you need to know about the Chinese New Year 2022 concerning dropshipping. Don’t get terrified by how exaggerated the situation would be according to the internet, as long as you leave your business to a professional team, you are in good hands! Hope these tips at the end will get you through this Chinese New Year safely!