The Chinese New Year is a time of celebration and family reunion. It is also a time when many Chinese people travel home to their families.
While the legal Chinese New Year holiday is a week-long celebration, much of the Chinese economy is virtually shut down during the festivities. And the impact of this holiday on business goes well beyond a week, with factories and businesses shutting down for weeks, possibly even up to a month, as their entire workforce chooses to go home for reunions or to travel and celebrate the holiday.
Therefore, not only do retailers or brands that import goods from China need to stock up in advance to be ready for the Chinese New Year, dropshippers that rely on Chinese suppliers should also prepare for the Lunar New Year by stocking up on inventory and planning for possible shipping issues. If you don’t take the time to prepare your store, you could be stuck in trouble for not being able to ship.
When is the 2023 Lunar New Year?
The 2023 Chinese Lunar New Year will begin on January 21 and end on February 27. However, as we mentioned earlier, many suppliers will start reducing production two weeks before the Lunar New Year and may shut down for up to a month for the celebrations. As a result, there may be significant delays in placing orders during this period.
How will the Chinese Lunar New Year affect dropshipping business?
The Chinese Lunar New Year (also known as the Spring Festival) can have a significant impact on dropshipping businesses. Here are a few ways in which it may affect your business:
Shipping delays: The Chinese New Year often leads to delays in shipping, both in terms of getting products from suppliers and in terms of delivering orders to customers. This can be caused by a variety of factors, including the closure of factories, shipping companies, and other businesses during the holiday period.
In the case of Nihaojewelry, all orders after January 10 will be delayed and shipping will resume on January 30.
Changes in supplier availability: Many suppliers in China will close their operations for an extended period of time during the Chinese New Year, which can make it difficult to get in touch with them or place new orders.
As far as we know, most factories will be gradually closed down by mid-January. And since China eased its zero Covid rule in December, many workers are infected, so factory production cuts and shutdowns will be further advanced.
Increased demand: The Chinese New Year is a popular time for shopping, and many consumers will be looking for deals and special offers. This can lead to an increase in demand for certain products, which can be a good opportunity for dropshippers.
Valentine’s Day in February is a not-to-be-missed sales opportunity for jewelry boutiques. Lingerie, jewelry and accessories will be popular around Valentine’s Day. And since it takes a while to ship from China to your country and region, January is the perfect time to stock up for Valentine’s Day. If you rely on suppliers in China, it’s best to source relevant products before factories go on holiday to avoid running out of stock or not being able to ship.
How could you prepare for the Chinese New Year?
Communicate with suppliers
Deadlines for being able to fulfill orders vary from supplier to supplier. Reach out to your suppliers to find out how the Chinese New Year will impact their operations. Will they be closed for an extended period of time? Will lead times be longer than usual? Having this information will help you plan and communicate with your customers.
Plan for shipping delays
You certainly don’t have to close up store during the Lunar New Year, but if you rely entirely on Chinese suppliers, you need to be prepared for delayed shipments. The Chinese New Year can lead to delays in shipping, both in terms of getting products from suppliers and in terms of delivering orders to customers. You can display notices about potential delays on your website, as well as possibly send emails to customers about delays. Make sure to let your customers know about any potential delays and set their expectations accordingly.
Stock up on inventory
If you’re concerned about potential shipping delays, consider stocking up on inventory before the Chinese New Year. Rent a temporary warehouse near your home and purchase best-selling products in advance and stock them in your warehouse for the transition. This will help ensure that you have enough products to meet customer demand, even if there are delays in the supply chain.
Reduce advertising expenditures
Spring festival is not a good time to expand, especially if you are running low on supplies. While reducing advertising spend may result in lower sales and revenue, it is better than losing customers due to your inability to ship on time.
Plan for alternative suppliers
Chinese New Year will greatly affect the supply chain in China, but you can still choose an alternative supplier, such as a U.S. supplier or a European supplier. Most products will not be exclusive to one supplier. Although drioshippers from China usually offer the lowest possible prices, it is always a good option to look for alternate sources outside of China and adjust prices to your alternative source in order for your store to operate consistently during Chinese New Year.
Anyway, the Chinese New Year is an important holiday for many people, and it’s likely that you’ll have employees or partners who will be taking time off to celebrate. Be understanding and try to be flexible in order to minimize disruption to your business.