The global supply chain is going through record-breaking delays. If you are an experienced seller, you must act now to prevent further risks of running out of stock. If you are launching a new product, watch the video now to learn how to mitigate the risks.
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Full Transcript:
Hello, everyone. Welcome to the Goodlife Warrior channel. I hope you are having an amazing day. If you’re not, just tell yourself today is amazing because one good thought at a time we create our reality.
So today, we’re going to talk about the shipping delays, bad shipping delays, and it’s not going to lighten up for at least another six months. That’s why we need to talk about it.
If you are running a big E-commerce store, you know how painful it is to get your product delivered on time. If you’re thinking about launching a new product, you need to pay extra attention because you may not launch your new product any time soon. So that’s why we need to talk about these implications of the shipping delay. But most importantly, what you should do about it.
Let’s get started.
If you’re new to the Goodlife Warrior channel, welcome again. In this channel, I deliver to you high-quality professional sourcing content combining with my positive attitude to life. If you haven’t visited sourcingwarrior.com, that’s my website. Feel free to visit the link, check out my background, and see how I can help you build your supply team.
Now, let’s talk about what is causing the shipping delays. Is that your freight forwarder or the ocean carriers? Who to blame? Let’s look at the big picture here. During the pandemic, where people are spending money? Have you thought about it? Well, they’re definitely spending less money on leisure products, things they do for fun, such as going to the amusement park, less money on service items such as doing your hair or going to the dry cleaner, and less money on traveling. Right? But instead, they’re spending more money on a tangible product. The thing they can touch and feel and hold.
Wholesale has increased drastically in the United States everywhere. So people are spending a lot of money to renovating their home, their home office. That’s just one sector driving the tangible goods demand search. And these tangible goods have to be produced somewhere and have to be shipped from somewhere to here. During the normal economical cycle, if there’s a boom, there’s an increase in demand for a product, the ocean carriers will invest in more equipment, the ships to transport more product to the importing country.
But during the pandemic, they’re not doing it. At the port, whether it’s an airport or ocean port during the economic boom, they will increase the staffing to offload the product from the containers. But now, during the pandemic, the staffing is not increased. It’s decreased because port workers are sick. As you can see, this imbalance in demand and supply, demand more products.
So we’re shipping into these ocean ports for the importing country, but there’s nobody to offload it. This is just like a highway accident. One car gets into an accident. It gets stopped here, and many cars get backed up. And to make it worse, there are not many empty containers or being returned to the origin country. Therefore, the departure time for your product to ship is going to be delayed.
So this is on a high level. What is driving and causing these roller coaster shipping delays? If you are importing a product, you are aware that the situation is quite bad. It’s getting worse by the day. In the beginning, the delay was only a week or two weeks, and then it got to three weeks, and then it gets to a month, a month, and a half, up to two months, depending on which port you’re offloading your product. It’s becoming impossible to get a product.
If you’re an E-commerce seller, running out of stock for a week, not a big deal. Two weeks is not very good, but we can manage. To run out of stock for a month or two months, could be very devastating. So your question is, how long do you think the situation is going to improve? Nobody has a crystal ball. In my personal opinion and based on the colleagues that I have and the people I’m associated with, we all agree that it’s going to last for at least another six months. So this brings up the most important subject we need to talk about, what you should do during this situation.
If you are a beginner, the first thing you need to remember, do not to blame your freight forwarder. Whoever you’re working with, it’s not their fault that your shipment is delayed. Remember, they’re in a service business. They want your shipment to be picked up and delivered fast. They want to turn over this shipment fast so they can make more money. They don’t want to babysit your product for three months because it gets stuck somewhere, and then they have to constantly update you with the situation. This increased their workload. So it’s not their fault. Please be patient when you work with your freight forwarder to deal with these shipment delays.
The second tip is for experienced sellers. I hope it is you selling millions of product in your E-commerce store. So what you should do if you’re selling a lot of your product? Plan ahead and pull faster. What does it mean specifically? It means that you need to take a look at your cash situation and see how fast you can trigger your next order. Even though your product is delayed, is stuck in the port, you still need to trigger the next order because the lead time for you to get the next order is going to be very long. How much you need to trigger? Well, if you’re in the mastermind course, you know the formula, demand during lead time, plus safety stock.
Now the lead time factor has increased drastically. That means your reorder point is higher. If you are in the course, this is the perfect time for you to revisit the module, the inventory planning. Many of you have told me how much you loved the inventory planning module because I automated the formula for you. So go ahead, revisit the lesson. For those of you who are not in the course, that’s okay, demand during lead time, plus safety stock. That should be your reorder point. That means right now, your reorder point is higher. If you wait until this level of inventory to reorder, you’re going to run out of stock for a long time in the next three to four months.
The third tip is for all of you, build relationships. This is the time for you to invest your time and effort to build relationships with your suppliers, with your freight forwarders. You know people like to do business with whom they like. Why? I’m so busy, and you ask me to expedite your order, and I’ll do that. Why do I want to jump through hoops for you? Because I like you because you’re special. Yeah. So invest some time, build that relationship with your supplier. In the mastermind course, I specifically have many videos talk about how to build a great relationship with your supplier, go and see. That is a relationship. The relationship is currency, is money. That’s your business. It’s up to you whether you want to invest time and effort in building it. Build that relationship with your freight forwarder too. Understand their struggle, so you will get a more timely update of your shipment situation.
Whether you’re a beginner or you are an experienced seller, one more thing to remember. Just because we’re experiencing these huge shipping delays, it’s causing a lot of stress and anxiety, sucking up a lot of cash for you because you’re running a big store. And it’s creating a lot of anxiety for you because you want to launch a new product. Don’t chicken out. Don’t stop. Many people will hesitate, and then they will stop. Not you. You just need to stay on course and keep pushing it. After a few months, you will be standing on the other side of the hill smiling.
If today’s not that amazing day yet, that day will be amazing. I hope you loved this video. If you do, thumbs up, like the video, and subscribe to the Goodlife Warrior channel. I hope I will see you in the next video. Have a great day.
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.
Video Version:
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