The Impact of Novel Coronavirus on Dropshipping: What to Do About It

The Impact of Novel Coronavirus on Dropshipping: What to Do About It

Novel Coronavirus is dominating global headlines and impacting manufacturing and shipping, particularly to and from China and other Asian countries. While the situation is developing, we get new information every day.

There are a lot of fear and misinformation about the virus and its impact on dropshippers. Here are the facts as we know them right now.

What is 2019-nCoV?

Coronaviruses are a large family of viruses, responsible for everything from the common cold to SARS. A so-called novel coronavirus is responsible for the current break.

It is novel in the sense that it is a new strain of coronavirus that humans have never encountered before. Experts are currently referring to the virus responsible for the current outbreak as 2019-nCoV or COVID-19.

Where did it originate from?

Coronaviruses transmit from animals to humans, and then from human to human.

The current outbreak first started in Wuhan, China, on Dec 31, 2019. People believed it surfaced in a Wuhan seafood market that was illegally selling wild animals as food products, where workers at the market contracted the disease and spread it to other staff and customers.

What are the symptoms of the disease?

According to the CDC, symptoms of COVID-19 include fever, cough, and shortness of breath. In severe cases, these symptoms can progress to acute respiratory distress, pneumonia, kidney failure, and death.

How does it spread?

Coronavirus passes from human to human in the same way as the cold or flu. When an infected person coughs or sneezes, tiny droplets of moisture can carry the virus to nearby people, who contract the disease when they inhale or ingest the droplets.

Some current research indicates that the disease may spread when an infected person touches an object, and then another person touches the same object, and their face subsequently.

Experts believe surface contact is not the primary means of transmission, because COVID-19, like most viruses, is not able to live very long on exposed, inhospitable surfaces.

While news reports around the world give statistical updates of the cases, COVID-19 is not yet under control. The statistics reported on TV are likely an underestimation.

China’s Dropshipping Industry at the Moment

Most dropshippers use suppliers from China, using common e-commerce platforms like AliExpress, Alibaba, eBay, and others. In early February 2020, quarantines in China shuttered many factories and shipping centers, leaving suppliers unable to make or ship products.

Chinese suppliers have asked their dropshipping clients to stop running ads on Facebook and to notify their customers who have placed orders of the possible delay in delivery.

How does Coronavirus affect the dropshipping industry?

COVID-19 is increasingly affecting global consumer behaviors and supply chains. Here are the primary effects at the moment:

  • Customers who have recently ordered from many dropshipping sites are experiencing a delay in shipping.
  • People in affected cities are panic buying. Some health products, like face masks, are experiencing an all-time increase in demand. In cities where the disease spread or a lockdown is imminent, people are stockpiling basic supplies and survival gears.
  • Dropshippers are changing their suppliers. While many companies and dropshippers are waiting for manufacturing in China to resume, many have already turned to suppliers in other countries to avoid shipping delays, and to reassure customers that their products don’t come from China. Suppliers in South Asian countries like Vietnam and Cambodia have seen an increase in business.

The COVID-19 outbreak is affecting nearly every aspect of dropshipping.

Inventory and sales

The reduction of manufacturing has led many suppliers to have reduced inventory. High-demand items like face masks are low on supply, or only available in limited quantities. Non-essential items are seeing a decrease in sales.

Human resources

Workers have been staying home or working remotely to avoid the infection. China has locked down three cities, resulting in almost no production in those places.

Logistics and delivery

Since late January 2020, China suppliers and freight forwarders have slowed down or completely stopped their fulfillment.

DHL has stopped all shipments to and from China. The warehouses in HangZhou have ceased operation, while those in ShenZhen have not.

Some fulfillment centers are still working, but there will likely be a considerable backlog of orders to clear after all the centers are back in operation.

Imports to China are also affected. Some consumers in China are beginning to look to purchase in-demand products from overseas, shifting the flow of products.

The Chinese government has been restricting transportation into and out of the key provinces and cities that contain a high number of infection cases.

The True Risks of COVID-19

Dropshippers are not only affected by the real facts and issues raised by COVID-19. They are also affected by altered consumer behavior based on fear of the disease, whether it is justified or not. And everyone is affected by the massive amounts of incomplete, inaccurate, or quickly changing information about the virus.

When considering the actual risks from coronavirus, there are two critical factors to consider:

Virus transmission via e-commerce shipping

The question is, if an infected person touches a product, and then that product is shipped abroad, could someone get sick from touching that product?

Since this question is of such importance, it is still being studied as we write, and information is changing rapidly. According to the World Health Organization, COVID-19 may live on surfaces for a few hours up to several days.

Other sources indicate that similar human-transmitted coronaviruses like SARS and MERS can live on surfaces for up to 9 days in environments with low temperatures and high humidity, but we don’t yet have information specific to COVID-19. Since the virus lives longer in low-temperature environments, it is subject to the local weather and climate conditions.

Currently, there is no evidence to support the transmission of COVID-19 associated with imported goods, and there have not been any cases of COVID-19 in the United States associated with imported goods.

according to the CDC

Infection mortality rate

The second important consideration is, should a person be exposed to the virus, what are the real chances of death?

Again, this is information that is being updated and changing rapidly, but our most reliable current information from China reflects a 2.3% mortality rate out of 72,000 cases. That makes COVID-19 more contagious, but less lethal than SARS and MERS.

Also, as with the influenza virus, it is more dangerous for the elderly and those who are already ill.

What Dropshippers Can Do About COVID-19

If you run a dropshipping business, even if it is not yet affected by the coronavirus, it’s a good idea to have a plan in place. Here’s what you can do:

Identify backup suppliers

If possible, look for other suppliers who may be less affected by the outbreak.

Update 16 Mar 2020:

A list of supplier locations that are least affected by Coronavirus outbreak, according to our connections in China, try in the order: top -> bottom.

Company LocationIn Chinese
Shenzhen, Guangdong深圳,广东
Yiwu, Zhejiang义乌, 浙江
Other cities in Guangdong province: Guangzhou, Dongguan, Huizhou, etc.广州,东莞,惠州
Other cities in Zhejiang province: Hangzhou, Quzhou, etc.杭州,衢州

How to view the location of an AliExpress supplier?

Aliexpress seller's business information

Tip: Try to find suppliers that ship from locations in North America to diversify the business risk. You can do this by using the filters on AliExpress. Do remember to verbally confirm with the supplier on the shipping routes. Alternatively you can use Spocket app to find new suppliers.

Look for automated fulfillment centers

If your business is large enough, you may want to contact agents or fulfillment centers that employ automation and rely less on human labor. These are typically more expensive, but may also be more reliable during the current circumstances.

Communicate with your customers

Keep a constant and open line of communication with your customers about delays and shortages. Consider streamlining order cancellation and refund practices.

Tip: For extreme delays, consider thanking your customers for their patience by offering them a gift. Something as simple as a discount code may help maintain customer relationships until business returns to normal.

Food for Thought

Since this is an uncertain time, and it’s unclear when we will eventually contain the epidemic, there are a few questions you may want to consider:

  • Is it still good to sell products that dropshippers usually sell or that have sold well in the past?
  • What sort of products would likely become not popular in light of the recent events?
  • Which in-demand products are more sellable instead? If you are selling masks, gloves, or hand sanitizers, then you are going to rake in profits. Example of a branded mask store: EM General.

Ongoing Information Sources

For the most up-to-the-minute COVID-19 information that is accurate and reliable, the World Health Organization has all the latest updates. WHO is also holding a daily coronavirus briefing that is easiest to view on their Twitter feed: @WHO.

Jeff Wong

Jeff has spent 12 years architecting data analytics and offering consultation services for clients in the b2b, telco, healthcare and e-commerce industry. He likes to blog about the problems online businesses are facing nowadays and share creative and inexpensive solutions.

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