Deliverr joins Shopify 🚀 Building the world’s most merchant-centric logistics solution

The path forward in eCommerce amidst COVID-19

2020 seems like a new world, with volcanic eruptions, unprecedented flooding, giant wildfires, and, of course, the novel coronavirus outbreak.

We’ve seen too many merchants affected by the novel coronavirus, COVID-19, which the WHO has recently declared a pandemic. From the prolonged shutdown of factories across China, which effectively extended the lunar new year break to multiple months, to the now-global outbreaks that have thrown entire countries into quarantine, COVID-19 has struck us on multiple fronts.

Deliverr offices in San Francisco, Chicago, and Toronto are now empty, with our teams working from home, and many of our upcoming events have been cancelled. But even beyond that, we can see the numbers affecting merchants across categories, marketplaces, and channels.

The novel coronavirus has drastically changed entire supply chains, and we, unfortunately, had front row seats. Here’s what we’ve seen, what we’re doing, and what you can do.

Quick updates

We’ve seen a lot of changes happening quickly due to COVID-19. Here are a few things we’re doing to help.

  • We’re now offering at-cost fulfillment for non-profits and government agencies to distribute essential COVID-19 supplies.
  • If you’ve been affected by Amazon’s FBA freeze for non-essential items, we can support FBM to keep your listings active.
  • We wrote some internal remote work tips for our (newly remote) team, and shared them on our blog.

Shrinking store volume puts merchants under pressure

We keep in close communication with many of our merchants, and many of them are facing supply issues. China accounts for 25% of global manufacturing volume, and is the final assembly point for more than 80% of the world’s smartphones. Toys, clothes, computer parts, medicines, mobile phone components, and more are mostly made in China.

Some larger businesses ask their manufacturers to ensure at least two different warehouse locations, such as China and Vietnam. Yet, even these are being hard hit due to unique circumstances and the spreading pandemic.

First of all, as the virus spreads to other countries, even second and third factory locations could be in cities that impose quarantines.

And secondly, the timing of the outbreak means that many managers and operators who were from China were visiting home for Chinese New Year, and ended up stranded and unable to return to secondary locations to re-open factories. The same is true for non-managerial positions. Many factories, even though outside China, may have relied on Chinese workers who were home for the holidays and got stranded after the new year festivities.

As a result, even businesses that have multiple warehouses in different locations are facing supply chain issues.

Here’s the next steps you can take to try to mitigate out-of-stock scenarios.

  • Diversify your supply chain. COVID-19 is a harsh wakeup call, but a necessary one for some merchants. If you’re a growing eCommerce business you must invest in a diversified supply chain.
  • Ditch “just-in-time” sourcing. If you’ve historically ordered items on short notice, it’s time to stop. This is a high-risk logistics strategy that enables lazy planning.
  • Forecast demand early. One of the big reasons to order items “just-in-time” for peaks and valleys is for lack of proper forecasting. Understand when demand will spike and have stock well in advance.

Tip: Don’t have enough capital to ensure a healthy (if not over-prepared) amount of stock? Payability has a program that provides flexible funding for eCommerce businesses. They will check your eCommerce accounts and then make an offer. You can learn more about this in our latest webinar with them on cash flow techniques.

P.S. If you mention Deliverr, you get a $200 sign-on bonus and preferred rates. We’re not an affiliate or anything, we’ve just partnered with them for various webinars so they’ve been nice enough to provide our merchants with this special perk.

Limited stock means you must be strategic about fast shipping

Fast shipping has always been where we make the biggest difference for our merchants. We’ve watched stock dwindle, and fast shipping tags turn off due to lack of inventory.

Some merchants may be tempted to turn off fast tags to preserve their inventory and avoid going out of stock, but now is not the time to let your business take huge hits. In order to weather the storm, there are a few ways you can be smart about your inventory.

  • Use a listing tool with real time inventory updates. In a normal month, if you oversell something by 1 or 2 pieces, you can put in a rush purchase order and fulfill your orders before buyers get too angry. Today, that’s not an option for many merchants, so it’s more important than ever to keep close watch on your inventory and have real-time updates across channels.
  • Consolidate your stock. You should strive for inventory efficiency for multiple reasons. Even in regular times, consolidating stock helps avoid overselling, gives you clear visibility of all your inventory from one platform, and keeps everything easier to manage.
  • Keep your level of service up. It’s important to offer your buyers the same level of service and speed as always. This is especially important if you sell healthcare products, food, and other important items that people quarantined at home may need as soon as possible.

In line with the last two points above, you should consolidate your inventory in order to offer fast delivery in as many places as you can, despite limited stock.

For example, Deliverr merchants can make the most of their limited inventory, since they get access to fast shipping tags across multiple channels. So if a merchant is selling on Amazon, Walmart, eBay, Wish, and Shopify, they can keep all SKUs with Deliverr and still be able to get products to buyers as quickly as possible (from one central location).

Note: If you sell in key categories such as health and wellness, toiletries, and other essentials, we’d like to help you better serve your buyers. Please get in touch for more information.

Weathering the storm

Unfortunately, this is a global problem and there’s no way to escape it. We’re feeling the effects in the eCommerce industry, which is booming in some ways (we’ve seen orders of vitamins and supplements shoot up), and growing stagnant in others.

In today’s global economy, we are all interconnected. It serves as our greatest strength in the best of times. The new coronavirus has shown us where we still need to grow, which we can begin now and continue on once the world economies recover and ecosystems start back up.

In the meantime, follow our advice above to help you weather the storm, and keep your business and employees going strong.

Related Tags

Join 50,000+ merchants that receive the latest eCommerce and DTC insights straight to their inbox.

You might also like