How the Coronavirus is Impacting Amazon FBA and Sourcing from China

Updated : Mar 09, 2020 in Articles

How the Coronavirus is Impacting Amazon FBA and Sourcing from China


So I’ve kind of been putting off saying
something about this subjec,t but I think with where things are at now it’s
important for me to at least say something.. and the reason I’ve hesitated
is because I don’t think any dude on YouTube sitting here talking about the
coronavirus and medical stuff and the future of the markets is at least me I’m
not really qualified to say those things so I do want to make it clear that this
is just my opinion and this is just based on things that I am seeing in my
business and in the businesses of people that reach out to me a lot and this is
really just in the context of business and Amazon FBA this is not you know
official financial advice or medical advice and whenever you make a video
about something like this there’s always gonna be people that say you can say
this or what about this so I just want to say I’m not an absolute expert in
these things and I’m filming this video on March 2nd that is the context in
which this video is made so let’s basically just talk through some of the
problems and concerns that I’m seeing the most you know what are the delays
looking like should I be sourcing in other countries what if I’m just
starting now what should I do so those are the types of things that I
want to get into and let’s just get the YouTube stuff out of the way smash the
like button subscribe hit the bell leave comments YouTube’s algorithm you know
the deal so first off what are the problems now pretty much what I’m seeing
in my own businesses and the businesses of my students and people that are
asking me questions on Instagram and in the YouTube comments
basically yeah there are delays that is a fact and so when the outbreak was at
its peak in China I was definitely seeing suppliers continuously saying oh
we’ll be back next week and then kind of kicks the ball down the road and gets
longer and longer and longer and I’m still seeing that to some extent but
what I’ve heard on the news and what’s consistent with what I’m seeing
talking to suppliers in China it does seem like we’re pretty beyond the peak
outbreak in China at this point and I am seeing suppliers start to come back and
start to be much more responsive now already now does that mean the delays
are over no I don’t think so I don’t think they’re back to full production
now or even next week and it will there will be a backlog as well of time to
catch up and get things going to a fully operational level but I was being super
concerned people thinking that this is the end of
China as a global supply leader and crazy accusations like that and I
personally opinion I really don’t think that’s the case I think yes this is a
major major hit and we might see some crazy manufacturing companies tank in
the stock market over the coming weeks and things might be going out of stock I
know I personally stocked up on some stuff just in case but even with all of
that that doesn’t mean that China is going to stop being a viable place to
source in the future and I think that they will a hundred percent bounce back
from that but that doesn’t mean that China is never going to be a viable
place to source products from again forever
I think they’ll for sure bounce back from this the part that’s up in the air
is how long is that gonna take and that would just be a guess that would just be
anyone’s estimation really and this is also very based on the region in China
but from what I’m seeing suppliers are starting to get back in the door to some
extent I don’t think it’s peak operation but for example I have one supplier that
I actually need to send something to rather than receive from but for a
product development type of thing and they were they were saying to hold off
and now they’re saying go ahead we’re good – we’re good to receive it so to
kind of summarize on that point yes there are delays yes I think some delays
will continue but it seems like it’s not going to be that much longer to at least
get stuff rolling along maybe not at the peak of where it was or where we’ll be
but it seems like things are already moving very much in the right direction
on sourcing so another question coming up a ton right now is should i source
from a different country should i source from india the u.s. Thailand Vietnam
wherever you’re finding potential manufacturers and in a way my answer to
this is the same as it would always be which is those are amazing if you can do
it and I’m a huge fan of sourcing from anywhere but China when you have that
ability and I think this gets confused a lot so this is a good chance for me to
clarify because obviously I do talk a lot about sourcing from China and then
some people take that as me saying that sourcing from the US would not be a good
option and that’s not at all what I mean I’ve sourced from the US and several
other countries whenever possible actually
but China just the truth of it is in a lot of situations that’s where things
are manufactured to the highest levels mass production at prices that are
action doable and it’s not like we’re talking
about a product that costs five bucks to be made in China versus six bucks to be
made in the US if that is the calculation that you’re dealing with you
should go for the us every single time because the logistics are gonna be so
much easier the lead times are gonna be so much better but the truth is is that
there might be a product that you’re sourcing in China for five bucks
and maybe it just doesn’t exist at all manufactured in the US or it’s 50 bucks
not five bucks so it’s not always this simple calculation like people seem to
think so the answer is never that you should only source from China the answer
is that in a lot of cases you kind of that’s kind of your only option for a
product in those cases and so if you’re able to find manufacturers for your
product in the US India anywhere else or that’s just the country that specializes
in the type of product that you are sourcing I’m a hundred percent all-in on
it all the time coronavirus or not so if you’re sourcing
from the beginning right now and you can find a product that you were looking
into that source elsewhere absolutely I’m all-in
better tariffs situations there’s there’s really no reason to only look at
China China is a great place to source in terms of quality mass manufacturing I
mean it’s obviously the leader in that generally but some products just have
other countries in areas where people are specialized in making those products
so it really just depends product to products so if it’s not a product you
source before and you can source it elsewhere absolutely all in now if it’s
a product you’ve already been sourcing in China that could be more difficult to
switch because you might find that that product is just specialized in China and
they have the capabilities to do it there and you might not be able to find
manufacturers that are that have those capabilities that you need for that
product elsewhere so overall in that one honestly in a way my answer is the same
as it would always be sourcing outside of China is absolutely great if you can
manage to do it it’s just honestly not always a reality for a lot of products
and also on this point in terms of comparing pricing of manufacturing in
China to other places if there are massive global supply chain issues for a
specific category of products you might see your competitors going out of stock
you going out of stock pricing changing a lot in the markets so that might mean
that you would be able to absorb a higher cost by sourcing in the US or
elsewhere and then work it into your price
because look if you’re gonna go out of stock anyways you might as well raise
her price and slow things down a little bit get a little extra cash coming in as
you figure out what’s next and also if your competitors start going out of
stock then the same thing there’s gonna be more potential customers looking at
your products so again probably raise prices so not only think about your own
supply chain but think about how this is going to affect the market for your
buyers – and I think it’s still relatively early to be seeing a massive
disruption in the buyers market right now it’s more on the supply chain things
and looking a few weeks or months down the road but this is definitely
something to think about and it might be an opportunity to even make a little bit
more money in the short term and another question I want to cover this one might
be the one I’m getting asked the most right now and funny enough it’s kind of
the same question that’s always asked but just spun in a new way based on the
current events and this is just if I haven’t started yet is now the right
time to start should I delay is this causing so many problems and should I
just wait on the sidelines for now and my honest genuine answer to this is I
don’t see any reason to not still get the ball rolling in your business and
getting things started at least in the planning phases and the research phase
most people that ask this question don’t even know what product they were gonna
be selling anyways honestly and that’s just a harsh truth but if you’re asking
that question I would really love to know if you were actually at the point
of ordering your inventory or if you’re just kind of thinking about this because
if you’re just thinking about this you should start the planning anyways
because most likely by the time you’re ready to pull the trigger on your
product things are gonna be dramatically different anyways and you’ll be that
much more ahead of the curve and ready to actually start your business when the
time is right even if there are some slight delays if some slight delays are
the difference between you doing this and not then you’re probably thinking
about this extremely short term anyways and yeah you might want to consider
other places of manufacturing things like that I’m all for it but I don’t
think this is a reason to just give up and not think about it at all even if a
slight delay and look also a lot of other people are going to be afraid of
this so any time there’s more hurdles and more people afraid and more people
looking elsewhere things almost quiet down a little bit so this might be a
great time to get not medical advice just my some dude on
the Internet’s opinion I’m not particularly worried from the health
angle but I do see this as a massive global disruption event the markets
supply chains you know that has really started to get weird
a month ago I wasn’t really concerned about this at all I still don’t think
it’s that scary in terms of the health implications though I think a lot of
people could get it but it is scary in terms of supply chain and things like
that so personally I was screwing around and holding some put options shout-out
to Wall Street bets didn’t go so well I don’t understand how but we’ll see what
happens with that and yeah I bought some extra like water and non-perishable food
and stuff like that not because I think it’s gonna be some zombie apocalypse but
because I think that the supply chains could be disrupted for sure but again at
the same time how long is this going to last not forever and both on the
consumer side and the online business owners side I do think this will blow
over it’s just a matter of time and anybody telling you it’s gonna be
tomorrow or next month or three years from now in my opinion would just be
guessing so this is just my opinion this is just the way I see it but hopefully
it was some good insight for you at least to see how it’s affecting my
business personally and how it’s affecting a lot of the people that I
talk to because I do get so many people approaching me about this so if you’re
watching this far please do stay healthy smash the like button subscribe to this
channel hit that Bell so you get notified when I post drop comments below
I will read and respond to all of them it really helps with the YouTube
algorithm as well feel free to also follow me on instagram at mellow person
to see what I’m up to and see you in another video really soon

8 Comments

  • Sourcing from China is different at this point, yes factories are open but they still have many workers not back. I am getting samples quickly but production and FCC testing is delayed big time!

  • Thank you very much. I'm in the product research phase and I'm a little worried that the product data provided by the softwares can be inaccurate because many sellers are out of stock right now. What do you think about it?

  • Can the virus be carried over in packages sent express air, sorry if this sounds like a silly question, im at the stage of ordering and was just thinking about this. Thanks

  • Great advice all the way around. It's a great idea to always check other markets/countries for your products, check prices, & get samples etc.. Good business practice.

  • Thanks for this video. Please do a video on sourcing products from US. Have you ever sourced any of your products from US?

  • Was wondering when you were going to address the T-Virus. Great info, thanks! I see you're still rockin the shoe below the TV too. Ever since someone pointed that out I can't "unsee" it. I think it's odd and hilarious (in a good way). Gotta enjoy the simple things in life lol

  • Nice video man! I made one on the subject too. We should be good to go here pretty soon. My 3 suppliers are all back in action, but some students and my dad actually still have issues. Depends on the province pretty much.

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