How COVID-19 is Affecting Dropshippers and 10 Things to DoEric Merlin
How COVID-19 is affecting dropshippers is a valid concern for many as the virus wreaks havoc on the global economy, disrupting the lives and livelihoods of millions.
Reports say China’s exports fell 17.2% between January and February as factories shut down to contain Coronavirus spread. For dropshippers (including those who ship direct-from-factory), this has led to stock-out, delayed shipping, cancellations, refund requests, and poor retail sales.
And although factories are reopening (with some cutting jobs), supply chain, logistics, and fulfillment are lagging, even as consumers across the world grapple with lower purchasing power, lockdowns, and stricter scrutiny of Chinese exports.
These are pointers to how COVID-19 is affecting dropshippers, especially those who source products from China.
In this post, we’ll highlight COVID-19’s impact on retail, how COVID-19 is affecting dropshippers, plus ten things dropshippers can do to survive COVID-19, but first, let’s see
How COVID-19 Is Affecting Dropshippers: Google Trends of COVID-19 and Its Fallout
In the last 90 days, there’s been heightened interest in COVID-19 and associated fallout like quarantine, lockdown, and stay at home. Like almost everyone else, these have no doubt affected dropshippers.
Impact of COVID-19 on Retail: 5 Glaring Examples
For retailers, COVID-19 is a cart of mixed blessings; part pain and part gain.
Here are some glaring examples:
1. US Retailers Lose Over 90% of Foot Traffic
No thanks to the stay at home directive in most US states, many brick and mortar stores are either shut or experiencing declining foot traffic. It is the same in several other countries.
2. Retail Job Loss Due to COVID-19
Reports released by the Bureau of Labor Statistics for the week ended March 12 indicate that payrolls dipped by over 701, 000, the worst since 2009.
Over 46, 000 retail jobs were lost as seen below:
Observers believe the April report will better reflect the current level of job loss due to COVID-19.
3. COVID-19: Impact on EU E-commerc
With Italy and Spain hard hit by the virus and lengthening lockdowns, business owners are taking stock and counting their losses.
The chart below is from a survey showing COVID-19’s impact on EU e-commerce.
4. Amazon Hires 100, 000 Across US
Although the e-commerce behemoth recently suspended most inbound FBA shipments in Europe, it announced 100, 000 part and full-time job openings for its fulfillment centers across the US plus an additional 75, 000 jobs of recent.
It also plans to invest over $350m globally through April to raise pay per hour for employees in the US ($2), Canada (C$2), UK (£2) and the EU (€2).
This is in order to help it cope with the rising demand for high priority products/categories like
- health and medicals
- pet supplies
- beauty and personal care, etc.
5. Rising Online Groceries Orders
The more people stay at home, the more groceries leave the shelf as more people order essentials online.
The number of US households now ordering groceries online is up %143.5 (to 39.5 million) according to a consumer survey conducted by Brick Meets Click and ShopperKit.
Out of stock items have also increased as well as panic buying and delayed deliveries as retailers are stretched.
How COVID-19 Is Affecting Dropshippers
Perhaps you’re wondering how COVID-19 is affecting dropshippers like you across the world.
According to the Federal Emergency Management Agency (FEMA), 40% of small businesses fail following a natural disaster.
The Coronavirus pandemic has brought economic hardship and financial disasters to many, including dropshippers.
How COVID-19 Is Affecting Dropshippers: 10 Telling Examples
- Chinese factories shutdown hampering manufacturing
- Low/no supply
- Low international demand for non-essential goods
- Prolonged shipping times
- No access to e-packets delivery
- Delayed deliveries
- Canceled orders
- Refund requests
- Declining international trade
- New import restrictions, among others.
How COVID-19 is Affecting Dropshippers: 10 Ways to Survive It
1. Communicate Suppliers
In times like this, communication is key. Factories are reopening in China and workers returning to work to resume manufacturing. Keep in touch with your manufacturers or suppliers regarding reopening and stock availability.
Also, find out what shipping methods are available, delivery timeline and cost to consumer. This may vary from supplier to supplier. Ensure they’re at a favorable price point for consumers who’re rationing spending due to uncertainties surrounding COVID-19 lockdowns.
2. Communicate Customers
Good customer relations is another essential this season. Constant contact with customers is key to customer retention during COVID-19 pandemic. The key is not in the quantity but the quality of communication and engagement.
Find creative, non-salesy ways to engage customers via newsletters, blog posts, podcasts, videos or social media and get feedback. You can research and create engaging educational multimedia content about Coronavirus and how to stay safe. If you still have stock or will, also let them know.
3. Sell Locally Sourced In-Demand Products
On the other hand (if #1 is not feasible), you can also sell locally sourced in-demand dropshipping products. These will arrive faster, increase customer satisfaction and shorten the sales cycle.
Selling locally sourced in-demand products will also eliminate bottlenecks arising from international shipping and logistics. Groceries and products like face masks and hand sanitizers are currently in very high demand.
4. Adjust Shipping Times
Except you’re Amazon, chances are you may have to adjust shipping times. This is one clear instance of how COVID-19 is affecting dropshippers. The good news is that shoppers will understand with you; we’re all in it together.
Communicate to your customers clearly the need for the adjustments, display it prominently in your online store, too. And if for any reason, delays occur, do well to notify your customers.
5. Explore Other Shipping Options
If dropshipping from China, you may want to explore other shipping partners/options like UBI, SFExpress, YunExpress. Most of them offer reliable courier services including order tracking.
If dropshipping locally, here’s a list of 666 couriers you can choose from. Currently, most are offering skeletal services, but there are others functional enough to meet all or most of your shipping needs.
6. Revisit Pending Customer Complaints
Retail consists of several moving parts and most dropshippers are solopreneurs responsible for product research, sourcing, pricing, shipping, fulfillment, accounting, auditing, customer service, etc.
This can hamper productivity and customer satisfaction. If you have pending customer complaints, now’s the time to address them ALL so you can start on a clean state after COVID-19.
7. Optimize Your Website
It is essential to stay busy while you stay home this period. Considering that your business is online, now is a great time to revisit your online store and optimize your ecommerce website.
Work on your site speed, landing pages, sales copy, product descriptions, SEO, blog, newsletters, cart recovery sequence, etc. If you use Shopify, you can try out new themes, apps and many more.
8. Monitor the News
One of the simplest ways to know how COVID-19 is affecting dropshippers is to monitor the news. Chances are you may not hear much or any news about COVID-19 and dropshipping, but watch out for news about China and other industries and sectors within the dropshipping supply chain.
This way you can have the first-movers advantage and strike quickly while the iron is hot.
9. Follow Top Blogs, YouTube Channels, etc
Another key way to keep abreast of how COVID-19 is affecting dropshippers is to follow top blogs, podcasts, social media handles and YouTube channels of actual dropshippers.
Oberlo runs a robust YouTube channel that covers everything dropshipping from startup to scaling. They share real-life stories of how other dropshippers are coping with COVID-19.
10. Check Out Your Competitors
By spying on your top competitors (who may happen to be better or bigger dropshippers), you can gain valuable insight into how COVID-19 is affecting dropshippers.
Not only should you learn how it is affecting their business, you should also take note of their responses. How are they responding to COVID-19?
Wrapping it Up:
These are uncertain times. It is difficult to fully estimate how COVID-19 is affecting dropshippers at the moment.
While we wait, remember to:
- Communicate suppliers
- Communicate customers
- Sell locally sourced in-demand products
- Adjust shipping times
- Explore other shipping/courier options
- Revisit pending customer complaints
- Optimize your website
- Monitor the news
- Follow top blogs, YouTube channels, etc
- Spy on your competitors
How is COVID-19 affecting dropshippers like you or your friends? Let us know in the comments section.
Author Bio: Amos Onwukwe is an AWAI trained Business and Ecommerce Copywriter who also covers Tech and Social Media. When not writing, he’s thinking of writing or making music. He’s been featured in Huffington Post, Dumb Little Man, Ecommerce Nation, eCommerce Insights, Understanding Ecommerce, Result First, Floship, GrowMap, Self Growth, among others.