7 tips to prep for Chinese New Year factory shutdowns [2022]

If you order manufacturing from China, you’ll need to prepare for Chinese New Year factory shutdowns in early 2022. These closures may cause production and shipping delays, and can even lead to stockouts if you don’t plan ahead. This year, Chinese New Year falls early in the calendar year and holiday break can last anywhere from just a few days to 3-4 weeks, depending on the employer.

So what is Chinese New Year, exactly? Also called Spring Festival season, the holiday is an annual 15-day celebration honoring the new moon with colorful lanterns, red envelopes, street festivals, and more. For nearly 30 years, people who live in China have been given at least seven consecutive days off work to commemorate the occasion, and many Chinese employers grant even more leave.

Here are some key dates to be aware of:

• Monday, January 17, 2022: Many factories begin to slow down production
• Tuesday, February 1, 2022: Chinese New Year + beginning of Year of the Tiger
• February 15, 2022: Lantern Festival

Some factories close for just a few days, whereas others remain out of production for a few weeks. You should expect delays any time between January 17-February 28 from Chinese manufacturers, but it’s best to contact them directly to confirm exactly when they’ll be closed.

Below, you’ll find more tips to prep your eCommerce business for Chinese New Year delays.

1. Reach out to, and build rapport with, your suppliers

If you aren’t doing so already, now is a great time to build rapport with your overseas suppliers. The Chinese refer to this relationship building as Guanxi, and it can lead to better prices, shorter delivery times, better product quality and more.

Chinese New Year is an exciting time and a well deserved holiday break, so make sure to acknowledge this in any upcoming communications with your supplier. You can also consider sending a gift item to the manufacturer as a nice gesture.

Here are some questions you should be asking your supplier about Chinese New Year:

• How long will your factory be shut down during Chinese New Year celebrations?
• When will production resume after the holiday?
• How long will it take an order to be finished after the factory reopens?

2. Consider air freight for rush product orders

The key to surviving Chinese New Year shutdowns is to stay fully stocked throughout the celebrations. Going out of stock can cause a costly chain reaction for your eCommerce store, impacting everything from product listings and marketing to customer service.

Air freight speeds up product deliveries and lets you avoid shipping delays, but it is an expensive alternative to cargo ships. To save on costs, remember that you don’t have to have all your products delivered by air freight. Instead, just get enough product to keep best sellers in stock. Another way to fund air freight delivery is to get a funding partner to help with cash flow. Customers are using our 8fig Growth Plan’s to pay for air freight and get ahead of impending Chinese New Year delays.

3. Use Downtime to Focus on Other Areas of Your Business

Once the factories shut down, you likely won’t be able to get new orders moving for 1-4 weeks — unless you seek out a domestic supplier or find another international supplier you trust. Be proactive and use this quiet time to plan other areas of your business, such as new product research and development. You can also brainstorm new marketing strategies, implement new technology for your storefront (such as chatbots), and become an omnichannel merchant during the festivities.

4. Advertise potential delays on your online storefront

Keep customers in the loop by updating your online storefront to feature copy about the upcoming shutdowns and possible delays. Consider adjusting shipping promises and take down product features for any items that may go out of stock.

Manage customer expectations by reminding them about delays even after an order is replaced. You can set up trigger emails to keep your customers in the loop.

5. Keep Cash Flow On Hand for Any Curveballs

The dynamic nature of eCommerce means that you never know when a new issue will head your way. If a product sells out unexpectedly, or the last shipment before the factory shutdowns arrive with damaged goods, you may spend Chinese New Year in crisis mode.

Get ahead of potential problems with efficient supply chain cash flow. Whether you need to find a backup manufacturer or air freight an overnight delivery, uncapped capital can help you move fast and stay smart in spite of factory shutdowns. 8fig offers flexible, continuous capital to do just that — you can learn more by signing up for a Growth Plan today.

6. Know Which Niches May Be Impacted

While Chinese New Year does fall during a quieter sales period, you should be aware of profitable niches and opportunities that you could miss out on if you stock out. Valentines Day, which is a $21 billion sales opportunity, falls directly within the Chinese New Year Celebrations and Mardi Gras isn’t far behind it. Stockouts on cold weather products, such as ski wear and winter clothing, could also be costly.

7. Bump Down Your Ad Spend

If there’s a chance you could sell out in Q1 with stock you have on hand, consider reducing your ad spend on specific products until after the Chinese New Year. This lets you divert cash to other opportunities and improve your customer service. Also remember to lose any listings that are out of stock on Amazon or other marketplaces to minimize organic ranking impact.

Chinese New Year is an exciting period of celebration — and your manufacturers deserve this time off — but it comes with factory shutdowns that may impact your eCommerce business. Planning ahead will help you continue to scale and get ahead of any curveballs thrown your way.

8fig’s just in time capital helps you stay flexible and adapt, so you can take advantage of every opportunity in 2022. Start building your Growth Plan today.