If you weren’t already aware, there is a crisis that is plaguing businesses worldwide – the supply chain shortage. If you are a business owner or consumer, you know firsthand how challenging the situation is.
Many merchants have had to deal with delayed shipping, lack of inventory, or loss of workers. Inflation has risen sharply, at a stunning 7.5%, the biggest jump since 2008. Economists speculate that the jump in inflation is primarily due to importing and manufacturing costs. We are clearly living in difficult times– the pandemic has affected businesses, especially small businesses, in dramatically damaging ways.
Why is this all happening?
According to Fortune.com, 75% of companies experienced disruption in their supply chain due to Covid-19, causing frustration for both sellers and consumers. The disruption in the supply chain has left many businesses challenged with labor and material shortages and higher material costs.
There is currently a shipping crisis in China due to multiple factors such as their recent rationing of gas and electrical powers resulting in a global ramification on shipping and manufacturing. What would typically take 6-8 weeks (pre-pandemic times), can now easily take 4-6 months. Shipping costs have undoubtedly risen to exorbitant proportions.
Amazon sellers were also heavily affected by the pandemic’s ramifications. At the peak of Covid-19, many sellers couldn’t transport their shipments due to country lockdowns and travel restrictions. In the aftermath, Amazon sellers experienced a delay in supply chain shipping, amidst high customer demands for global goods. This ultimately resulted in higher inflation fees for imported retail merchandise. Because of all the delays and challenges, many of their Amazon listings have suffered a large brunt as well.
Local shipping in the U.S. has taken a hit as well. Per the Bureau of Labor Statistics, the truck transportation industry lost 6% of its 1.52 million workers. The industry has yet to recover from this hit, largely due to low pay, long hours, and measly benefits.
What can you do about it?
Start planning for forecasting your volumes further in the future so you will have a contingency plan when markets shift further than expected. You may be wondering why you should even bother with the hassle. Forecasting your volume will ensure that you will have a viable plan for the future. It’s a great opportunity to get contingency plans in place to minimize future disruptions. It will also make you a more resilient entrepreneur in the long term.
Below we will discuss a few practical solutions to address and mitigate supply chain issues:
Assess Your Ongoing Supply Chain
Identify the gaps and challenges in your supply chain. Then, look for possible solutions and ways in which to diversify your sourcing. For instance, if your local supplier doesn’t have the products you are seeking, look to source internationally.
With insight, networking, and critical thinking, much is possible.
Source Alternative Materials
Having trouble with material shortages? Now is a fantastic time to explore alternative materials to use for your products. Adapting to the times is an excellent asset and can help change the trajectory of your selling process.
Think Ahead and Stay One Step Ahead, Too
Part of adapting to the disrupted supply chain is predicting the future. If you see a material is bound to go out of stock, you can better plan for the future and have a more realistic threshold to communicate for listings.
Keep Customers In The Know With Waitlists
Take advantage of waitlists to send a message to your customers that your product has limited availability. This will, in turn, give you more time to obtain your product.
Have a Backup Plan in Place
Most people were caught off-guard by the extent of havoc that the pandemic had on the supply chain. While an emergency plan won’t guarantee to minimize all disruptions, it will certainly help minimize the effects of an unstable supply chain. Make sure to plan for alternative shipping routes and multiple sourcing options. For example, some large companies started chartering their own ships instead of relying on their usual shipping companies.
The current supply chain has no doubt resulted in a significant strain on consumers and sellers worldwide. The good news is that sellers have demonstrated grit, resilience, and adaptability to overcome this challenge. With these tips, you can find ways to limit the impact of the supply chain on your business. You will position yourself in a better place for the future.
Amazon sellers: How were you impacted by supply chain challenges over the past two years? What are you doing to prevent and negate these issues? Share your experiences in the comments below.