Supply chain disruptions that began during the pandemic have forced many entrepreneurs to rethink their approach to trading overseas. This became especially noticeable in 2021 when 93% of e-commerce sellers lost a stable income, and inventory began to arrive with delays of 2 months or more.
PartnerTrade publishes a study that shows how sellers have changed business strategies and found alternative solutions to the current situation.
What problems have Amazon sellers noted?
Between December 1, 2021, and January 3, 2022, Jungle Scout interviewed 3,500 representatives from 117 countries and showed what they faced and how supply chain problems were solved.
After ordering inventory from a manufacturer, e-commerce market participants faced long waiting for orders, especially for shipping by sea. Almost half of those surveyed reported delays in the delivery of goods from 1 to 4 months.
Communication with suppliers
A slightly smaller number of entrepreneurs reported problems ordering new products from suppliers.
Some entrepreneurs said that the supplier had stopped communicating, others said that the manufacturer had completely curtailed production.
|Supplier issues||Small and medium companies||Big brands||Agencies|
|Unable to order new inventory from the supplier||27%||42%||36%|
|Supplier out of reach||11%||21%||18%|
|Supplier went out of business||5%||15%||13%|
Stocks of goods
Supply chain problems affect not only new orders from suppliers but also products in stock. Brands have to move existing inventory from the warehouse to avoid payments for storage. 26% of small businesses, 44% of big-name brands, and 38% of agencies reported that supply chains affect how goods are stored and stocked.
The high cost of transporting products has also weighed on the earnings of e-commerce players, especially those who import goods from afar. One of the sellers noted that the price of delivery has increased from $1.60 to $8 per unit of delivered products, and this eliminates his profit.
So, in 2019, the cost of transporting a container to the US West Coast from China cost $2,000, and in the summer of 2021, it soared to $20,000 and remains high to this day (January 2022 – $15,500).
Ownership of the Buy Box
Inventory management issues have negatively affected the display of products on Amazon and the ease with which customers can purchase them. Companies need to get a Buy Box, a listing widget that allows buyers to make a quick purchase. Thanks to him, more than 82% of sales on the marketplace are made.
However, disruptions in the supply chain have made the process of obtaining the Buy Box more difficult. To assign a widget, an entrepreneur must maintain a high rating on Amazon – through fast delivery, compliance with marketplace conditions, and a high level of customer service.
23% of large companies and 11% of small businesses said they lost this feature due to a lack of stock because of the supply chain crisis.
What losses did e-commerce players suffer?
Big-name brands have suffered more and incurred higher costs than smaller firms. Thus, 45% of small companies estimate that sales losses due to supply chain problems amounted to less than $5,000, and 30% say they lost from $5,001 to $25,000.
On the other hand, 18% of large companies believe that they lost less than $50,000 on sales, and 16% reported that their losses amounted to more than $500,000.
How do merchants respond to disruptions in the supply chain?
Companies have developed such strategies during the supply crisis and the pandemic:
Large enterprises also switched suppliers (27%), increased advertising spending for in-stock items (17%), raised product prices, and ordered products earlier considering shipping delays.
As the report shows, supply chain disruptions have brought significant costs to both large and small e-commerce entrepreneurs. Partner Trade, a reliable logistics service provider, will help to reduce costs, ensuring uninterrupted delivery of goods from China to the USA and other countries.
Agents, customs representatives abroad, as well as warehouses in the USA, Canada, and Dubai, are at the service of our clients. We offer inspections at the manufacturer’s factory, delivery of product samples, and a database of verified carriers and suppliers.
If you want to avoid shipping delays, decrease in sales, and rating on the e-commerce platform, contact an experienced 3pl operator. Leave a request for a miscalculation of delivery in a special form or by calling our managers.
How has the supply chain disruption affected e-commerce merchants?
They were forced to change their approaches to trade and business.
What’s up with entrepreneurs at Amazon?
Delays in the delivery of goods stretched from a month to a year. Manufacturers stopped communicating or closed production, storage methods, and shipping costs have also changed. It has become more difficult to get a Buy Box.
What are the losses of Amazon sellers?
Expenses due to the current market situation are estimated at less than $5,000 for almost 50% of sellers and more than $5,000 for 30% of entrepreneurs.
How did companies respond to the supply chain crisis?
Some companies have cut their advertising budget, others have changed fulfillment or have decided to change their product line and even the warehouse. To avoid deliveries delays, sellers began to order products in advance.
What will help to avoid problems with delivery?
Reliable logistics from the 3 pl operator Partner Trade, which includes route planning, accurate cost estimates, factory inspections in China, and ordering product samples.