[Crew Review] Blackouts in China are threatening your Q4

'Tis the season

China’s Big Power Crunch

Crazy tariffs, soaring freight costs, and now, power outages in China.

A severe power shortage is sweeping the world's factory, causing power rationing and blackouts all over its key manufacturing regions.

Coal is in short supply for the coal-reliant Chinese economy, and factories are operating at sluggish rates or have stopped operating altogether.

Chinese suppliers have started raising their prices to Western retailers ahead of a high-demand Q4, but a price hike could be the least of your worries.

Read the full story here.

'Tis the Season

Amazon has announced this year’s big holiday dates to help you manage inventory during the holiday shopping spree. Sellers are reminded to have their inventory sent in before:

• November 15 for Black Friday and Cyber Monday
• December 11 for Christmas

All well and good, except a lot of sellers can’t actually send their inventory into the FBA warehouses because of Amazon’s ridiculous restock limitations.

Some sellers report being hit with decreasing max stock levels every week despite healthy IPI scores, and a few even have millions worth of inventory that could end up sitting the holiday out.

To prepare for the worst, you’ll want to work with a reliable 3PL and make sure your orders are all ironed out as early as now.

Black Friday-Worthy Deals

In an effort to get customers in the shopping spirit ahead of the holidays, Amazon has announced a bevy of deals involving top brands, must-have products, and unique gifts.

These deals coincide with its ongoing Holiday Beauty Haul, which the company also launched to attract buyers ahead of the holidays, although Amazon’s main goal seems to be increasing its share in the beauty market, which really took off during the pandemic.

Other major retailers are also following suit, with Target to hold its own Target Deal Days on October 10th-12th.

US consumers are predicted to spend 17.9% percent more this year than in 2020, according to eMarketer. Most of that spending will be during the holiday season, and a good chunk of the sales will go to Amazon.

Timing your promotions with these events and getting your products out there early could help reduce the negative impacts of ecommerce inflation to your business, especially with all that’s going on in the global supply chain.

Giving Amazon a Break

Turns out, it’s not just the pandemic giving Amazon a huge tailwind, but also the government itself. A recent report by the Financial Times says that Amazon won a record amount of tax breaks from both local and state governments in 2021 (estimates peg the figure somewhere around $650M).

These grants, tax exemptions, and other incentives were given to Amazon to entice the ecommerce giant to expand its logistics capabilities as part of the government’s efforts to rebuild economics and job markets in the wake of COVID.

Naturally, this raises some eyebrows (what issue involving Amazon doesn’t at this point?). Some analysts are saying the government is continuing to subsidize large and wealthy companies when it should be doing the exact opposite.

For Amazon’s part, it says that most of the benefits were on the table for a lot of businesses, not just for Amazon, but these tax breaks pretty much play into the company’s other initiatives to expand its own logistics network.

Taking Flight

Speaking of logistics, Amazon Air founder Scott Ruffin has founded a new start-up to speed up deliveries in time for the holidays.

The company is called Pandion, and its pitch is to help smaller companies sort, pick, and ship out their orders without relying on big logistics companies like FedEx, UPS, and well, Amazon. More interestingly, the start-up has developed software that spots potential hiccups in shipping and lets you reroute packages to other facilities.

After a successful initial funding round, it’s currently building a network of warehouses for online retailers across the country and is offering cheap 2-day deliveries for major retailers in the U.S. Northeast and mid-Atlantic regions.

With the major disruptions in the supply chain and a predictable spike in the demand for consumer goods in the next few months, this is welcome development as ecommerce sellers are striving to open up their options.