Let’s discuss this item on everyone’s mind today. How will the Coronova virus affect our Amazon FBA business? It is now a global pandemic and the whole world is gripping with the reality that COVID-19 brings.
Coronavirus Outbreak in China: The Manufacturing Hub of the World
With multiple cities in China in lock down, and factories in the Hubei or Guangdong area been largely affected, your supply chain will definitely be affected.
The situation is evolving quickly and daily so I will not post any statistics about the virus here; besides we are here to find out the affects of this virus on our Amazon business.
We have already heard that this outbreak have already affected certain industries such as the automobile, services and tourism industries. It is not surprise that Amazon sellers are also bracing for impact from the product shortages and supply chain woes if they sourced in China. (Which the majority of sellers sourced from China)
Many suppliers of various Amazon sellers state that production will most probably resume in March. We shall see how that goes for now…
Update: China is recovering quite well and their factories and ports are coming back online. We should see the recovery of quite a number of supply chain in the market now.
Products are Running Out of Stock
If the situation persist, and with the supply chain affected, our products will eventually run out of stocks. Now that China is slowly recovering, we can expect the factories and ports to operate back to slightly lower than normal capacity.
In regular times, the lead time for production and shipping is about 6 weeks. Today with the outbreak, the lead time can go to as high as 10 weeks (Even more).
And to be honest, there is nothing you can do about it as Amazon sellers do not control the manufacturing aspect of the product. (Unless you own that factory)
You can perhaps diversify your product manufacturing to another country to make your supply chain more resilient and less dependent on a single country in the future. It will be costly, but it can help tide over a lot of the issues with putting all your eggs in a single basket.
What Should We Do?
- Number 1 of the list, do not panic. This too will pass.
- If you have suppliers or agents residing in China, send them messages and show them your concerns. Everyone is facing the same issue. Spare a thought for your Chinese counterparts instead of pressuring them.
- Keep in close contact with your suppliers/agents. Check if they have other contacts that can help ease your supply chain issues temporarily.
- If your products can be sourced outside of China, it would be wise to start sourcing them now. You can try looking for the product (Depending on what products) in India or even Africa.
- Do not make plans to travel to China to source. Postpone them until this blows over.
- Please do not price gouge on your products. You will get banned by Amazon, especially on life saving or daily essential items.
Online Sales Via Amazon Increases
Due to the sheer number of people being quarantined in the USA and EU, their fingers have been rather active on their computers and phone buying all kinds of home products. The garden or home project that have been long overdue is perhaps finally being prioritize now.
So much so that Amazon had to hire 100,000 part time and full time staff to help with fulfilling the huge increase in orders. So there is always a silver lining behind every cloud.
If you have not started selling on Amazon yet, fear not! This is the perfect time to actually learn how to sell on Amazon FBA. Feel free to look around the other useful articles here to get you started.
Final Thoughts
Has the virus affected our FBA business? Yes, but we will get through this as always. That’s what I admire about entrepreneurs and problem solvers. They will always find a way no matter the situation.
I would like to leave everyone a thought that I believe is much needed in this world of upheaval. Do not fear and worry about what tomorrow will bring.
“Have I not commanded you? Be strong and of good courage; do not be afraid, nor be dismayed, for the Lord your God is with you wherever you go.”
Joshua 1:9.