Over the past year, shipping costs for a single 40-foot container from Shanghai to Los Angeles has nearly doubled, leading to many sellers wondering about the rising costs of shipping from China. As China remains the most important exporter for many e-commerce sellers, the situation has made many worry about the viability of their enterprises.
Adapting to new shipping rates doesn’t mean your business is doomed, however. In fact, there are a few practical steps you can take to mitigate these rising costs. Today, we walk you through why rates are rising and what you can do to stay profitable.
Why are Shipping Costs Rising?
While general costs of shipping are rising every year for simple reasons like inflation and rising fuel prices, shipping rates from China specifically have been rising due to other reasons. The main one is ongoing tariffs levied against China by the United States, creating a situation where American importers are paying a premium for goods shipping from China. In general, American companies have been absorbing this cost, leading to a rise in items at almost all levels of the supply chain.
The now-infamous ship that was lodged in the Suez Canal highlighted the fragility of the shipping industry as well, and caused severe delays for many parts of the world. All of this has led to rising shipping rates and, in some cases, slower delivery times at a time when demand is high and fast shipping is essential.
How to Work Around High Shipping Costs from China
While these rising shipping costs may seem like a potential death knell for some sellers, there are a few things that you can do to mitigate the costs and keep your profit margins. Here are a few tips that we have found useful.
1. Ship only best sellers: Now is not the time to take risks on products coming from China. Instead of trying out new things or keeping products that don’t move, focus instead on your best sellers. This can help you guarantee profitability on everything you’re shipping from China while lowering your risks at sitting on products that are costing you too much.
2. Look at the calendar: Important shopping days and seasons will help you move products faster. Times of the year, like Back-to-School and Prime Day, can help you move more products faster, and maximize your products that are costing extra.
3. Look Locally: The easiest way to get around rising shipping rates from China is to start sourcing locally. Whether it’s manufacturing in your region or products from nearby with lower or no tariffs, looking elsewhere for similar products can help you stay profitable.
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