While Chinese New Year is most certainly not new, you might not know just how impactful this holiday is. Not only is it important culturally to the Chinese, but this holiday has become very important in the retail space, and more recently to the ecommerce world.

As this holiday grows exponentially for the ecommerce space, it’s especially key that sellers prepare. COVID-19 and lingering pandemic troubles have already made planning for inventory and logistics a nightmare. Adding to that, during Chinese New Year manufacturers, vendors, and many distributers for products will be taking time off to celebrate, causing additional delays for anyone potentially working with partners in China.

Chinese New Year (CNY) is February 1st, 2022 and is the first day of the “Year of the Tiger.” The official government holiday lasts from January 31st through February 6th.  All suppliers start to wind down operations one to two weeks in advance.

It’s also a transition time for the factories themselves as many of the workers will switch jobs or decide to stay in their home towns.  This all adds to delays in getting each factory back to full production.  This is also why it can take a month or longer for some factories to get back to normal production.

So how can you prepare for this? We’ve got some answers.

What can Amazon sellers do to protect their business during this time?

The first and biggest thing you can do is plan ahead.  Here’s a rough timeline you should be aware of (source: ChinaImportal.com):

  • November 1st: Confirm when your supplier is closing and reopening for the CNY
  • December 23rd: Last day to place an order for delivery before the CNY (assuming a 40-day production time)
  • January 5th – 12th: No new orders are started (all new orders will enter production after CNY)
  • January 21th: Some manufacturers and material suppliers stop mass production and prepare to make their final shipments before closure
  • January 25th: Most workers have already left the factories. Sales reps, engineers, and management may still be around for a couple of days
  • January 28th: All personnel leave the factory (including sales reps and managers). Packed and unfinished products that are yet to be shipped will be sealed in the factory until they open again. Nothing will leave the factory when they are closed.
  • February 1st: Chinese New Year’s Eve
  • February 14th – 18th: Most sales reps and engineers are back in the factory, or at least respond to emails and calls. Some factories resume production
  • February 21st – 25th: Most factories are now operational and production resumes. The suppliers normally prioritize unfinished orders and shipping cargo that was packed before closure.

What are some other factors Amazon sellers should be aware of?

  1. There unfortunately can be quality issues before and after the factories shut down.  It can occur before in the rush to fulfill orders and some workers taking leave prior to production shutdowns.  It can occur after as many factories are training new workers and ramping up production.

  2. Paying a supplier just prior to the close of CNY is not a good idea.  For factories that are not doing well, this is the time some will close their factory permanently.

  3. Shipping costs can also go up around CNY.  Shipping companies also take time off during this time leaving less ships to ship products out. 

  4. Finally, it should be reiterated that advanced planning is key.  With suppliers already experiencing delays because of Covid, you can never plan too far ahead.  With this February 1st, 2022 holiday it will most likely be worse than CNY 2021 for delays.

If you are having cash flow issues placing orders for inventory, a Working Capital loan may be your ticket to success.  Not only can they keep a business afloat, but they can help propel your business growth to new levels.

Need funding to cover your inventory and logistics needs? SellersFunding can help.

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