Chinese Tariffs' Impact on Dropshipping
Hi everyone, it's Kam and Chen here again! Today, we want to talk about the electricity problem in China. Recently, many of our factories have been facing delays in production due to new government rules limiting electricity usage. Some cities, especially those in industrial areas, are only allowed to use electricity three days per week, which leads to longer production times and delays.
The government is considering raising the cost of electricity, which has remained unchanged for 20 years. This could lead to increased costs for products and affect the economy. As China has emerged from the COVID-19 pandemic, life has returned to normal. However, the electricity problem has become a cause for concern.
Most of China's electricity comes from coal mining, and the government has set a target to reach a balance in carbon emissions by 2050. However, the reliance on coal and market-driven pricing has led to a situation where the big companies that control coal mining can raise prices without government intervention. This has resulted in a situation where the price of coal has increased, while the government has kept electricity prices low.
This has created a situation where some factories are using a lot of electricity to produce low-value goods, leading to a waste of resources. To prevent this, the government is limiting electricity usage for factories. Additionally, the government is also limiting or closing down factories that use high amounts of energy to produce low-value goods.
In September 2021, the Chinese government also declared the use of bitcoins illegal, which has affected bitcoin mining in China. This is because bitcoin mining requires a lot of electricity and energy usage.
To address the electricity problem, the Chinese government is considering raising electricity costs and limiting electricity usage. This could lead to higher production costs and affect the economy. However, it is necessary to address this issue to reduce pollution and waste of resources.
In conclusion, the electricity problem in China is a complex issue that requires government intervention and cooperation from factories and companies. We hope that the government can find a solution that balances economic growth with environmental protection. Thank you for reading, and we'll see you at the Canton Fair!
Will Donald Trump's Tariffs Kill Your Shopify Dropshipping Store?
In this video, MattWasik shares a piece of news that can affect dropshipping stores and Amazon FBA businesses. The news is about Donald Trump announcing a big tariff on products imported from China, which can increase the cost of products and shrink the margin of businesses. Matt explains how this can affect businesses and what they can do to manage it.
- The news is about a big tariff being put on products imported from China, which can increase the cost of products by 50 to 60 billion dollars.
- This can affect businesses that are dropshipping from China or bringing in products from China to sell to US customers.
- If the prices of products increase, it can shrink the margin of businesses and leave little room for advertising spends.
- Businesses can increase their price, but they may lose customers who see little value in the product.
- Building a strong brand, loyal following, and customer base can help businesses sell products at a high margin and still make money.
- Businesses may need to pivot to a print on demand model or find a manufacturer in the US to make similar products at a good price point with shorter shipping times.
- Businesses should not waste time commenting on news articles on Facebook but focus on adapting and pivoting to the constant changes on the internet.
- The only thing that stays constant is change, and businesses need to be ready to adapt and pivot when needed.
In conclusion, the big tariff on products imported from China can affect businesses that are dropshipping or using Amazon FBA. Businesses need to manage this situation by building a strong brand, loyal following, and customer base. They may also need to pivot to a different business model or find a manufacturer in the US. Businesses should focus on adapting and pivoting to the constant changes on the internet. The only thing that stays constant is change, and businesses need to be ready to adapt and pivot when needed.
TRADE WAR | THIS IS HOW IT WILL AFFECT SHOPIFY DROPSHIPPING
- Donald Trump's announcement about potentially banning Chinese planes from entering the US may affect drop shipping logistics and shipping options
Interview with CJ Drop Shipping Supplier:
- Supplier from CJ Drop Shipping in China provides expertise on the China vs US trade war and global pandemic
- Provides updates on ban of flights from China, increase in Chinese import tariffs, and termination of Hong Kong trade privileges
- Addresses concerns in drop shipping and e-commerce community
Ban of Flights from China:
- Concerns arise due to reliance on shipping service, ePacket, which relies on passenger flights for shipping
- CJ Drop Shipping uses specialized shipping companies for cross-border e-commerce shipping that do not depend on passenger flights
Increase in Chinese Import Tariffs:
- Import taxation applies only to products with a cleared value exceeding $200 USD
- Working with a B2B company like CJ Drop Shipping allows for negotiation of best prices and minimizing impact of any cost fluctuations
Termination of Hong Kong Trade Privileges:
- No effect on drop shipping as Hong Kong is just part of the route for several products and not within the scope of dropshipping
Preparation for Potential Shipping Delays:
- Processing time for shipping may be affected due to pandemic and efficiency of last miles
- Preparing ahead of time with private inventory and US warehouses can lead to faster delivery times and advantage over competitors
- Informing customers about potential shipping delays beforehand is important to avoid losing orders
- Negotiating discounts may be necessary in cases of extremely long shipping times
Status of Trade War:
- Import and export of goods have slowed down due to trade war
- Negotiations are ongoing but no resolution in sight
- Shipping costs with USPS have not shown signs of increasing in near future
- CJ Drop Shipping has US warehouses with sufficient supplies and hires US staff to run warehouses
- Prices for most products are stable and not more expensive than previous year
- Hot sellers may experience price increase due to demand
- Understanding the dynamics behind the scenes of drop shipping logistics is important in order to be prepared for potential disruptions
- Joining the free Facebook group allows for access to experts like Demi to answer questions and provide updates on industry news
- Stay safe during the pandemic and keep up to date with the latest news in the drop shipping and logistics world.
China’s Economy Has CRASHED! (DROPSHIPPING IS DEAD?!)
Did you know that China is currently facing a housing crisis? This is important for e-commerce business owners who import products from China or dropship on platforms like eBay and Shopify to know. In this article, we'll go through everything that's happening in China right now and how it can potentially affect your business.
China's real estate makes up 40% of its GDP, which means the housing market's impact on the economy is significant. In recent years, there has been a slow increase in property value, mainly due to the belief that owning a property is essential in China.
Why it's important:
Homeownership is crucial in China, and over 90% of the Chinese population are homeowners, compared to 65% in the USA and 63% in the UK. This is why it's easier for people in China to get mortgages, with some even being given nine to twelve times their annual income.
The real estate bubble:
China's housing crisis is due to various factors, such as loopholes in selling properties that don't exist, pre-sell. Property companies sell properties that haven't been built yet, and people pay monthly payments with the hopes of buying them at a lower price. This has caused a massive boycott in China, and many people have decided not to pay these monthly payments anymore, which causes property companies to default on their loans.
How it affects e-commerce business owners:
The longer the housing crisis continues, the more it will impact production costs like labor, raw material, and shipping. Manufacturers tend to use big banks to get funding, but with the banks increasing interest rates due to the economic downturn, costs will rise. However, not all suppliers in China will be affected, and it's essential to find new suppliers if necessary.
What e-commerce business owners can do:
E-commerce business owners should be on the lookout for a cheaper or more efficient supplier and continue as normal. In case their current supplier is affected, it's crucial to find another supplier that can meet their needs.
It's essential for e-commerce business owners to keep up-to-date with what's happening in China because of its impact on the economy and production costs. In the coming weeks, we'll continue to update you on various developments in China.
TRADE WAR! Trump China Tariffs – The END OF Amazon FBA?
- The United States and China are currently engaged in a trade war, with the US imposing a 25% tariff on goods imported from China.
- This has led to concerns about the impact on businesses that rely on importing goods from China, such as Amazon FBA or drop shipping businesses.
- This article will provide an overview of the situation and what it means for these types of businesses.
What is a Trade War?
- A trade war is where one country imposes additional taxes (tariffs) on goods imported from another country, leading to an escalation of tariffs from both sides.
- The current trade war between the US and China has been ongoing for the whole year, with the US recently imposing a 25% tariff on over $200 billion worth of goods from China.
Impact on Business:
- The majority of goods affected by the tariffs are high-tech raw materials or finished products.
- Everyday consumer goods, which are more commonly imported by private label or drop shipping businesses, are generally unaffected.
- Businesses should check their Harmonized Tariff Schedule (HTS) code to determine whether their products are affected.
- If prices do increase due to the tariffs, it is likely that all businesses will be affected and the market will eventually stabilize at the new price point.
- Businesses may also consider absorbing some of the costs or finding alternative suppliers outside of China.
- While the current trade war between the US and China may not directly impact everyday consumer goods, it is important for businesses to stay informed and be prepared for potential changes.
- Knowing your HTS code and understanding where your products fit in can help businesses make informed decisions.
- As the situation continues to develop, businesses should stay updated and adapt as necessary.
China Sourcing | Sourcing Agents vs Manufacturers | Dropshipping for Beginners
- The article discusses the difference between sourcing agents and manufacturers for business starters importing products from China.
- A sourcing agent represents buyers to source products out of their reach.
- They provide a One Stop service for managing a global business.
- They deal with market analysis, product research, product buying, profit calculation, negotiation, quality control, and global shipments.
- They have good communication skills and can source products from hundreds of thousands of manufacturers.
- They have a low MOQ (minimum order quantity) and offer faster delivery times.
- A manufacturer produces products and cares about the material, process, and time taken.
- They have minimum startup orders and less flexibility in sourcing products.
- Sourcing agents are a better option for business starters because they provide a One Stop service, have good communication skills, offer a lower MOQ, faster delivery times, and are more flexible in sourcing products.
- Fulfillment Channel is a global fulfillment and Drop Shipping Services provider that offers product photography, shopper, and catalog services for business starters.
Top 5 Products to Avoid Dropshipping From China and Some to be Careful of From a Supply Chain Angle
- Five types of products to avoid dropshipping or fulfilling from China
- Bonus section on products to be careful of
- Importance of considering supply chain when choosing products to sell
Products to Avoid:
1. Oversized products: difficulties with shipping and restricted shipping lines
2. Super heavy products: weight limits on shipping lines and high shipping costs
3. Fragile items: high breakage rates during shipping
4. Pure liquid products: restrictions on shipping lines
5. Single batteries: fire hazard and cannot be shipped on planes
Products to Be Careful Of:
1. Liquids: need to be shipped on the right lines and declared carefully by supplier
2. Products with batteries: cannot be shipped on any line, need to use special lines or fulfillment agents
3. Clothing: issues with sizing and SKU management
4. Expensive products: risk of losing profit with lost orders
5. Products with few sellers and low orders: potential issues with fulfilling orders due to lack of inventory
- Supply chain considerations are crucial when choosing products to sell
- Importance of working with trusted suppliers and fulfillment agents
- Look out for future video on products that are good from a supply chain perspective
- Consider using Ecom Ops for premium fulfillment services.
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