China Supply Chain for Amazon Sellers

If you are an Amazon seller, your “sales rank” can be damaged when your inventory runs out.  With a high sales rank, your products are much more likely to show up first on organic search results of product searches. A critical step to maintaining your sales ranks, is keeping your product in stock and to not let inventory run out for seven days or more. If the product is out of stock for more than 30 days, your sales rank can virtually become zero. 

Third-party sellers are the backbone of Amazon with gross merchandise sales on Amazon's site rising to 60% in 2019 from a mere 3% in 1999. As per Marketplace Pulse, an e-commerce intelligence firm, Amazon sellers sold products worth $200 billion in 2019 as compared to the retail sales of Amazon that totaled $135 billion. The source of products for close to 70% of sellers on Amazon is China. Third-party sellers depend heavily on Chinese factories to produce products they sell successfully online.

However, the coronavirus outbreak has led to supply chain disruptions across the globe, and China is no exception to this. Many Amazon sellers are dealing with the impact of manufacturing facilities and supply chains being shut down in Asia. The added delays to supply in China due to the coronavirus can result in interruption of inventory shipments, which increases the risk of products going out of stock for more than thirty days.

While larger companies have the resources and resilience to withstand such supply chain hold ups, independent entrepreneurs can find it challenging to maintain their sales volume in the face of supply chain disruptions.

To succeed as an Amazon seller in these challenging times, not only is it important for you to get insights into the overall supply chain trends in China but you’ll also need to find the right suppliers who can meet your product specifications. This will help you avoid the risk of running out of inventory for 30 days or more, which is crucial to maintaining your sales rank as an Amazon seller.

Supply chain industry in China: A brief overview

Seven out of the ten busiest ports in the world are located in China. As 80% of global trade occurs through the sea as per the United Nations Conference on Trade and Development, Chinese ports handle the bulk of the global trade. The initial lockdowns imposed due to the coronavirus pandemic impacted global shipping due to a shortfall of labor in warehouses, ports, and in the transport chain. Container lines reduced calls on Chinese ports and resulted in delayed shipment deliveries even after the pandemic was brought under control.

The pandemic resulted in factory shutdowns, shortage of labor, longer shipping times, and closure of ports across the world. Close to three-fourths of companies in the U.S. are said to have experienced supply chain disruption to some extent.

With countries shutting down ports and requiring people to stay at home, most Amazon sellers were presented with the uphill task of meeting the product-supply demand. While production suffered to a significant extent, businesses also found it increasingly difficult to ship products to consumers.