Many eCommerce sellers run out of stock in January, February, or March!! Not you!! With these 3 Pro. sourcing tips, you can succeed through any Chinese New Year! Enjoy! 😊
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Full Transcript:
Welcome to the GoodLife Warrior podcast. I’m Yuping. We make sourcing easy, fun, and profitable for your business. This episode was originally aired as a video on my YouTube channel, youtube.com/goodlifewarrior. As always, high-quality, professional sourcing content delivered to you with passion and my unique Chinese accent. Enjoy.
Welcome to the Sourcing Warrior Podcast. I’m Yuping. We make sourcing easy, fun, and profitable for you. This episode was originally aired as a video on my YouTube channel, youtube.com/goodlifewarrior. As always, high-quality professional sourcing content delivered to you with passion and my unique Chinese accent. Enjoy.
Hello, everyone. Welcome to the Good Life Warrior channel. I hope your day is going well.
I’m quite excited about today’s video because I’m going to try to prevent a potential problem for you in January, February, and March. What’s happening in those three months? Well, mainly e-commerce sellers often run out of stock. Why? Because the Chinese New Year shutdown is so long it often causes people to run out of stock, which is very painful when you lose sales. Since I have been dealing with Taiwanese and Chinese suppliers for so many years, I’m going to share three tips to help you prevent this problem. I think you are going to love it.
If this is your first time visiting, nice to meet you. My name is Yuping. I am the founder of the Sourcing Warrior Mastermind Course. I teach all the ins and out of sourcing to many e-commerce sellers to help them make more money, save more money so their business is more competitive. The course link is in the video description. Feel free to check it out.
For the Chinese New Year holiday, the first thing you need to remember is the date of the Chinese New Year never falls on the same day in any given year because it follows the lunar calendar. It’s not the solar calendar date.
The second thing you need to remember is the Chinese New Year is the most celebrated tradition. Many parts of China don’t even celebrate the Dragon Boat Festival, even though it’s very popular in the southern part of China. Many parts of China may not even celebrate the Spring Tomb Festival, but every family in China celebrate the Chinese New Year. So no matter how greedy, how much money the factory owners want to make, they often close the factory and let go of the workers, many of them come from the rural part of China. So for your business, you need to respect this tradition and plan your business around it.
Let me give you the first tip to help you plan your inventory properly. The first tip is about your order timing. When should you place your purchase order before they shut down and when should you expect your inventory? The rule I want you to remember is 60 and 60. Sound very simple, yeah, but it’s very effective. Let me explain. The 60 before Chinese New Year shutdown means you minus 60 days from the official Chinese New Year shutdown. That is the time you’re going to place your purchase order.
This 60 day has two factors. One is you’re giving the factory at least 40 days production lead time, and you are giving 10 days for inspection and 10 days before the Chinese New Year shutdown factor. That is when they start to lose workers. Ten days before they officially shut down, people start to go home, so total of 60 days. If you deduct 60 days from the official Chinese New Year shutdown and placed the order, this will guarantee you to have a shipment come out of China before they go home.
Now, after the Chinese New Year is over, when should you expect the first shipment to come out of China? Well, that is the other 60 days. After the holiday is over, just remember, many workers will return to the factory late. Many of them don’t even come back. That’s why many factories will have labor shortage issues. So the first factor is 10 days. Give at least 10 days after the holiday is over into the lead time. Then you give 40 days production lead time and 10 days for inspection, total of 60 days for the first shipment to be ready to ship after the Chinese New Year is over. So remember this golden rule, 60 days before, place the purchase order, 60 days after, expect the first shipment to come out of China. Yes?
Let’s move on to the second tip. This is about your order quantity. You can have perfect order timing, but if your order quantity is not right, it’s going to mess up your inventory big time. When it comes down to order quantity planning, it actually all comes down to one critical purchase order. Which one do you think, the one you placed before Chinese New Year or the one after? The one before. That PO you placed 60 days before Chinese New Year carries the most weight. If you mess up that PO, I can guarantee you, you run out of stock either in January, February or March.
The rule I want you to remember to plan this inventory right around the Chinese New Year is an extra two. If your order cycle and order quantity is two months, meaning that on the PO you normally order two months of inventory, now I want you to add two extra months. That means the purchase order you placed 60 days before Chinese New Year need to have at least four months worth of inventory. I know. A lot of cash, right? But either you put cash down now, or you run out of the product and lose sales. If you have a good product that is selling, it’s always cheaper to have the cash in the inventory than losing sales. So for the order timing, remember the rule of 60, and for the order quantity, remember the rule of extra two months.
Finally, the third tip is about your inspection. I want you to remember the rule of double. If you’re not doing the 100% inspection, you need to double the inspection quantity for the shipment leaving before the Chinese New Year shutdown and the first shipment leaving after simply because before the Chinese New Year, all the workers’ hearts are going home. They’re rushing to finish your order. When they rush, there are more mistakes. For the shipment leaving after the holiday, most factories will have a labor shortage. Not only they have a labor shortage, but they also have this huge backlog that they have to produce. Now they have to rush again with fewer people. When they rush, there’s more mistake. So for your quality control, you need to double down on the inspection before and inspection after.
Now, let’s do a quick exercise so you can really take this home. For 2021, the Chinese New Year falls on February 12th. The year is beautiful ox. So for your order before the Chinese New Year, when should you place the order so you can have this order shipped before they shut down? The correct answer is December 12th, 60 days before February 12th. Now for the order leaving after the Chinese holiday, when should you expect it to be ready? The correct answer should be April 12th.
I hope this is super helpful for those of you who are currently selling products. Does it really matter whether it’s 2021 or 2022? No. Every single year, once it’s Chinese New Year, you can always use the 60 days before, 60 days after, and add extra two months into your order quantity as the planning rule. I have been doing this for many years, I can tell you this is going to help you a lot.
For those of you who are still researching the product and don’t have a product to sell yet, you’re going to have a little bit harder time getting quotes and getting samples because the factories are too busy producing the orders before and after the holiday. Now the get-around, the solution to this, is to use a sourcing company because the sourcing company normally doesn’t shut down as long as those factories because they don’t have those factory workers. The sourcing company that I highly recommend is in the video description. Please do check them out. I know those owners very well, incredible people. They’re also in the Sourcing Warriors Facebook group. You need to connect with them, ask questions to test their knowledge, test their experience. Since I personally trust them so I feel comfortable recommending them to you.
I hope you enjoyed the tips I gave you today. If you want to learn more, join my mastermind course in the exclusive Facebook group. I mentor each one of the students.
The holiday season is coming up. First, I want to wish you a beautiful season. Second, I want you to think about giving yourself the gift of knowledge. Create a vision for your future, and it will be an honor for me to help you realize your vision.
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Check out the link, the Sourcing Warrior Mastermind link, undertake Sourcing Warrior’s quiz to find out your sourcing IQ. Make it fun, learn something, have a great day. I’ll see you in the next episode.
