Ocean freight will never be speedy, but it is consistent in terms of time. Even when all is calm in the world, the journey from Shanghai to Long Beach takes 21 days. But Amazon sellers can see that all is not calm out there in the world, or more specifically, on the docks of Long Beach, where vessels are waiting up to 13 days to unload. To help Amazon sellers navigate this supply chain catastrophe, the Quartile team joined forces with Mustafa Cokol of Thrasio to present the latest webinar in our partner series: Finding Profit Amid Supply Chain Disruption.
Amazon marketers have ample reason to be concerned. “Will I lose my ranking? Will I lose the buy box?” We hear these questions being asked by sellers terrified of running through inventory, along with a fair amount of bad advice making the rounds. There’s a proliferation of voices urging sellers to raise their prices so they won't sell out. With the natural consequence of increased margins, that is truly enticing advice for a seller to hear, but it’s the wrong advice, especially for the holiday season when repeat customers are particularly sensitive to the appearance of price gouging.
Canaan Schladale-Zink, Chief Revenue Officer of Quartile, made the case against using price increases for purposes of inventory control. “It might feel great to see margins going up as your inventory gets lower, but that process is naturally going to decrease your conversion rate and hurt your sales rank from both a paid and organic standpoint. We strongly recommend that you don't raise prices. And this may seem counterintuitive, coming from an advertising company, but we recommend you reduce your ad spend, or in some cases just pause your ad campaigns entirely because that won't actually impact your conversion rate but it will prevent you from selling out.”
An expert in supply chain management, Mustafa joined Thrasio as Senior Global Mile Logistics Manager to handle international logistics in March of 2020, giving him a front row seat to the distribution crisis that was triggered by COVID. During the Webinar Mustafa stressed the importance of planning ahead, aligning with 3PL warehouses, and updating calculations to incorporate the impact of the logistics per product. If sellers are still using the calculations that you had two years ago, they are way off. In the past, a shipping container that cost $2,000.00 now runs up to six times more, depending on freight agreements. And adjusting for new timeframes is key. For those looking for delivery on New Year’s Eve, Mustafa pointed out December 31st is already in the rearview mirror, but there’s still hope for arrival on Chinese New Year on February 1st 2021.
To access our webinar Partner Series: Finding Profit Amid Supply Chain Disruption, please click here.
For more from Mustafa Cokol and Thrasio, check out their recent blog post here.
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