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April 7, 2020

eCommerce Importing under Coronavirus with Burak Yolga

InfeCommerce Importing under Coronavirus

Burak Yolga of Forceget.com

eCommerce importing is Burak’s business. Burak spent  7 years in China Shenzen, established his international freight forwarding company from scratch – which is now present in China, US, Dubai and many other countries.

Burak is living in Miami now and with us to answer Amazon dealers questions about China-US trade. New platform coming out in May.

When it comes to eCommerce Importing under Coronavirus, when do you think will China open?

In fact, 80-90% of businesses are back to work but don’t have full capacity.

The issue is not labour now; it’s more raw materials.

Raw materials under Coronavirus Situation

Raw materials prices have greatly increased because of demand.

One of the issues is the carton boxes – there is a big shortage of those at the moment.

Paper prices went up a lot in China.

  • Maybe of  8-10 raw material suppliers, 6 are working full time
  • Many suppliers will be in Taiwan or Japan etc.

Communicate in advance with Chinese Suppliers

…because prices tend to go up if you look desperate!

3. Are you ready for the year ahead? – When Coronavirus is over, there will be capacity bottlenecks (both in factories and logistics providers?)

4. How to manage your global supply chain when importing  asdf China to US in todays uncertain environment.

Air freight e-commerce importing capacity down 50% 

Most of shipment flights in mainland China – are cancelled.

20 flights a day are down to 1-2.

HK still working but capacity is down

7-10 working time

Price for air freight from 5-6 USD to 9-10 USD

Most of main sea ports and air ports are closed in China.

50-60% of air freight was carried on passenger flights in cargo hold.

That’s obviously going to hit margins hard.

What are the possibilities for importing from China into USA?

There are a lot of backload shipments in Hong Kong.

HK is the largest airport in the world for commercial.

They are waiting 7-10 days waiting to take off.

Alternative shipments for e-commerce importing

DDP sea shipment

Get it picked up from

Fedex or UPS in LA port

This takes 18-22 days which is similar to air freight.
But the price is about ⅓.

Getting around FBA Labels

Offer sellers storage in LA.

So as soon as you have FBA available, you can get things in.

Don’t keep your products in China because once Amazon starts accepting shipments, everyone will start shipping. So it will create a big delay.

They had this issue in Xmas/NY time – took about 7-10 days to update stock status.

Burak recommends shipping stock into USA.

FBM Fulfilment for ecCommerce

A couple of Amazon FCs have been shut down due to virus.

So mix FBA/FBM.

On 5 April sellers can theoretically create shipments.

Freight Forwarder checklist when ecommerce importing under Coronavirus, 

  a. Fluctuations

  b. Quarantines

  c. Post closures

Be sure you get ALL the costs included!

Another risk is that Chinese freight forwarders are trying to get a cheap price. But make sure they are paying the right HS code for tax. If they don’t pay the right one, it could get stuck.

What about when choosing a 3PL/FBM fulfilment house in the USA?

Make sure the warehouses have enough capacity. A lot of people are trying to switch to FBM. A lot don’t have capacity. Or their cheap prices have slow delivery.

It’s all about costs and speed.

Best thing is to collect prices from different options. You need to be clear about what your customer’s response time expectations are – some products will be more flexible.

LA is getting expensive – there aren’t enough warehouses.

LA port is cutting shifts.

Chinese Suppliers under Coronavirus

a. How to pay attention while selecting the right supplier

b. How to negotiate with suppliers

c. How to buy from China safely?

d. How to ship safely.

Since trade war USA-China – some of the buyers have started shifting to Cambodia, Vietnam, Taiwan. Still China is one of the most reliable supply channels at the moment.

One of the most important things is to have a good relationship with your suppliers.

Burak worked in China 7-8 years, worked with Honda Belgium, Renault etc.

For most e-commerce sales, they don’t make long forecasts.

Place larger orders when importing under current conditions but split them up

If you make 8-10 small orders a year to your suppliers:

  • Make larger orders
  • So maybe pay 10-15% deposit instead of 30%  (ask for 10%, meet in middle)
  • Instead of say 1000 units order, order 6 months’ stuff once
  • Do a partial shipment
    • 1000 pieces ship first and pay balance for that
    • Then after 1 month, ship 2000 and pay balance for 2000
    • Then after that, ship rest, pay balance for res
  • Better price
  • Instead of paying 30%, put down smaller deposit

[My Questions]

Amazon FBA under Coronavirus

  • FBA inbound restrictions
  • People need hand sanitisers, food, baby things, pet things
    • You can’t create shipping labels until 5 April outside those categories
    • You cannot create a new listing
    • But probably will be longer (maybe April 20+)

Even if you have FBA stock, you should check, some of the items show almost 30 day shipping time.

  • FBA fulfilment restrictions
    • France, Italy restricted to essentials
    • Many people are trying to take inventory out of FBA

2 types of FBM fulfilment

If you already have an FBA product, you need to take some of the stock out and send to a 3PL. That usually takes 7-15 days; now it could be double that time.

If you have your own stock, using FBM is good.

Merchant Fulfilled Prime (SFP)

And Merchant Fulfilled – regular FBM – more flexible – you can write 7-10 day shipping time

3rd party warehouses (3PLs)

  • Most of them don’t have employees
  • Some don’t have enough capacity
  • In other cases, the price is very high
  • Some 3PLs aren’t opening new accounts

If I have an FBA account now, what do I need to do?

Ship product without FBA labels to a 3PL warehouse.

By sea that will take about 20-25 days.

Then follow up on this.

If Amazon starts accepting the cargo – which probably won’t let you unless it’s pet supplies or baby formula.

Don’t send everything to one warehouse. It might get shut down with Covid19.

Things are getting shut down – NY state is in lockdown; San Francisco is locked down for 3 weeks.

LA port is cutting shifts.

So try to split things between different states.

Next few weeks outlook for ecommerce importing?

China

There isn’t much of an issue, back to some kind of normal work life apart from raw materials price increases and  capacity in air freight. So go via sea instead!

USA and Europe

April and May will also be slow there. There are few options for deliveries in Europe. UK and Canada are a little more flexible at the moment.

It will take at least 4-6 weeks.

Contacting Burak

forceget.com

They are working for a system like Flexport from April 31 – you can track shipments, create shipments, pay online.

Gets round issue with Chinese freight forwarders and time difference and comms on ETD, ETA etc.

Other Podcasts about Importing and Logistics

Amazon Importing from China to UK with Neil Curran

US trade tariffs on imports from China

How to import Chinese products with Antoni Watts

Watch my full interview with Burak Yolga

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