Navigating Chinese New Year 2021, Prime Day, and the Holidays

Despite the uncertainty of 2020 thus far, I know one thing to remain true above all else.  Pumpkin spice lattes mean fall is right around the corner.  This sweet drink brings the promise of fallen leaves, cooler weather, and bonfires.  Fall also means it’s time to start ordering from your Chinese suppliers for the holidays before Chinese New Year and the gift-giving holidays! 

Earlier this month, we explored some of the difficulties of preparing for CNY.  Longer lead times for production and logistics, diminished communication with suppliers, and increased pricing among them.  All of these hold true today as we approach the holiday season. 

We also shared some best practices to prepare your business for Chinese holidays that affect the international supply chain.  Now it’s time to delve into preparing for peak online ordering season and a delayed Amazon Prime Day while navigating Chinese New Year closures and delays.  We’ll review the holidays to consider, their financial impact, and how to forecast inventory. We’ll also review some tentative dates and deadlines specific to Amazon Sellers based on historical data from last year’s deadlines. 

Holidays Affecting Supply Chain 

The U.S. remains the largest consumer country in the world, so it’s no secret that Americans love spending money.  This is especially true for the later months of the year during the holiday season.  Last year, Americans set new online spending records for Black Friday, Cyber Monday, and Christmas (The Big 3 we’ll call them).  With the ever-growing list of brick and mortar stores closing their doors, those new records are expected to be broken.  The Big 3 aren’t the only gift-giving holidays in Q4 though.  A bottleneck in the supply chain occurs when businesses are ordering larger quantities than the factories can handle, often beginning in September and ending as Chinese New Year celebrations come to a close. (see below)

As with everything else, education is key.  Knowing which holidays lead to increased order demand that creates this production bottleneck, and the financial impact they have helps us understand why early ordering is so important.  

  • Amazon Prime Day: Often held in July, Prime Day is expected to be held in October this year.  We will dive deeper into this later on.  

  • Diwali: scheduled for November 14, 2020.  This date varies annually based on the Hindu calendar.

  • Black Friday: November 27, 2020 

    • According to USA Today, Americans spent $7.2 billion on Black Friday in 2019, a 14% growth year-over-year.

    • Rumors emerged in early September that Amazon’s Black Friday deals would begin on October 26, 2020.  At the time of this blog’s release, these rumors have not been confirmed by Amazon.
  • Cyber Monday: November 30, 2020

  • Christmas: December 25 annually  

  • Hanukkah or Chanukah: December 10 through December 18, 2020.  While the dates of Hanukkah change each year as determined by the Hebrew calendar, this 8-day long celebration is often held in December. 

  • Kwanzaa: December 26 through January 1 annually

Forecasting and Warehousing

Ordering inventory to last through Black Friday, Cyber Monday, Christmas, and CNY is challenging for any eCommerce business – particularly for those just starting out.  Combine that with a historically late Prime Day and Amazon’s new limitation on FBA warehousing quantities, and Amazon Sellers have a uniquely difficult Q4 ahead of them.  Planning ahead is key.  Educating your team on Chinese New Year factory closure dates and Amazon inventory deadlines are vital to your success. 

JungleScout has a great read on FBA selling tips for Black Friday.

Reliable third-party logistics (3PL) warehousing is going to be the best move for all eCommerce businesses.  For non-Amazon Sellers, be sure your warehousing solution has enough capacity to accommodate your increased order size.  For Amazon Sellers, securing 3PL warehousing in addition to FBA inventory allows you to run FBA and FBM listings simultaneously.  This sidesteps the 200 unit limit of FBA warehouses and avoids negative effects to seller IPI (Inventory Performance Index).  Running two fulfillment methods comes at a price, but is well worth accommodating last-minute gift purchases.  Another benefit of retaining 3PL warehousing is to accommodate returns, particularly towards the end of the year.  In December 2019, CNBC estimated nearly $50 billion in gifts would be returned immediately following the holidays. 

Utilizing a 3PL solution directory such as Sermondo allows sellers to review and connect with Amazon-specific service providers.

Amazon Prime Day 

Why are we discussing Prime Day in an article about navigating Chinese New Year and the holiday season?  Great question.  

Prime Day has been pushed to an undisclosed date later this year, rumored to be in early October.  While this likely goes without saying, the postponement is due to COVID-19.  What will be interesting to see is what impact if any, a delayed Prime Day will have on historically successful Black Friday and Cyber Monday.    With Prime Day’s speculated occurrence in October 2020, it begs the question of whether or not the online discount day will see an increase or a decrease in sales.  

One perspective is that consumers may wait until Black Friday and Cyber Monday to make their discounted purchases, resulting in fewer sales on Prime Day.  However, a contrary argument is that consumers will want to take advantage of deals sooner rather than later.  It’s also very possible that neither outcome are true and records will be broken for all three holidays yet again.  (Americans love spending money, remember?)   

Regardless, Amazon Sellers need to be ready for the surge of orders coming their way and prepare to navigate FBA inventory deadlines and limitations. 

Amazon Holiday Inventory Deadlines

While Amazon hasn’t released their holiday season inventory deadlines for 2020, they, like winter, are coming.  Sellers need to be aware of these dates to have appropriate inventory available through the holidays and subsequently for 2021. 

**The timeline and information below are based on Amazon’s FBA inventory deadlines from 2019 and should be used exclusively as an approximate guideline.**

Once Amazon releases the 2020 FBA holiday season inventory deadlines, Sellers can use this timeline these graphs as a template for when to order products and schedule delivery to Amazon FBA.  Please remember to send your inventory in alignment with the Amazon deadlines.  Inventory for 2021 should not be sent to Amazon FBA any earlier than the date provided by Amazon.

Holiday and New Year Deadlines

Amazon FBA inventory deadlines exist to give Amazon sufficient time to catalog products and update listings accordingly. They also do this to give sellers the opportunity to be a part of some of their time-exclusive deals which can be set up through your Seller Central account  Each year, Amazon communicates inventory deadlines to sellers through Sellercentral.  While these dates haven’t been released yet for 2020, we can use the historic dates from 2019 to create an order timeline to best prepare for the rush.

Black Friday and Cyber Monday Deadlines

FBA Inventory for Black Friday and Cyber Monday 2019 was set for early November, the 5th to be exact.  The best practice is to have your products arrive at Amazon FBA at least 1-2 weeks in advance.  In 2019, this would have been between October 22nd or October 29th.  To ensure on-time delivery to FBA, products should be on the water at least 40 days prior to your desired delivery date.  Following the 2019 calendar, products should have been on the ship by the second or third week of September.  

Different methods of shipping mean different timelines for delivery. Standard ocean freight, often the least expensive option, can take 25 – 45 days.   Expedited sea freight is cheaper than express air and is likely just as fast. Expedited sea from Shanghai to Long Beach (port to port) can take as little as 12-15 days.

Christmas Deadlines

In 2019, inventory for Christmas shopping had a deadline of December 5, 2019.  Your products should be scheduled to arrive at Amazon FBA at least 1-2 weeks in advance.  Using last year’s dates, between November 21st and November 28th.  Products should be on the water at least 5-6 weeks prior to your desired Amazon FBA delivery date.  For 2019, this would have been between October 14th and October 31st.  Sellers again have their choice of shipping available, taking anywhere from 12 – 45 days to arrive. 

Chinese New Year and Holiday Preparations

So how do Golden Week and CNY affect your holiday season inventory planning and forecasting?  

Chinese New Year gift purchases don’t move the revenue needle for most businesses in the U.S. However, extended factory closures directly affect a business’s ability to accommodate increased volume demands.  Remember, factories are closed the first week of October for Golden Week and again for 4-6 weeks in early 2021.  Orders placed in November and December very well may not be completed until after the factory returns to work in April.  

To have your products delivered to 3PL or FBA prior to CNY factory closures, you’ll want to place orders no later than the end of October.  Ordering in alignment with Chinese New Year closures simultaneously prepares your business for U.S. holiday warehousing requirements.

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Lisa Kinskey is the Marketing Assistant of Noviland, Inc., a rapidly growing sourcing & purchasing solution making sourcing from overseas factories simpler.  Lisa has a background in sales, marketing, and event planning and currently resides in Kennesaw, Georgia.