If you are an Amazon Seller who has been doing business involving importing from China for some time already, you may be familiar with the regular anxiety as February approaches each year. Every time Chinese New Year comes around, a lot of Amazon Sellers who rely on imports from China gets thrown for a loop. Rookie sellers often fail to anticipate the holiday’s impact on their production timelines, shipping timelines, and quality control.
As many seasoned sellers know, it’s critical to start planning for the CNY holiday far in advance. Factories shut down for several weeks, and after they reopen, it takes at least a few more weeks to get back up to full production capacity.
Here I will address the typical effects of these holidays and the actions you can take to avoid problems with your Amazon business.
How Long do Factories Usually Shut Down for Chinese New Year?
During the Chinese New Year holiday period, every factory in China shuts down… Yes, every factory. The official public holiday only lasts for seven to eight days. However, most factories are fully closed for two to four weeks.
Additionally, many Chinese factory workers take extra time off, leaving in the weeks leading up to company closure dates, slowing production down significantly. Many workers will not return immediately afterward, meaning it can take up to a month for production to return to full capacity after the holiday.
Why do Factories and Employees Take So Much Time Off?
Chinese New Year, also called the Spring Festival, is the country’s most important holiday. Like Thanksgiving or Christmas in the US, people travel back home to spend time with their families.
Since most factory workers are migrant laborers, they generally live far away from their hometowns and travel hundreds of kilometers or more to return home. If they have a husband or wife and children, it may even be one of the only times they see them during the whole year.
Companies require long closure times to allow workers to travel home and then back to the city where they work.
5 Things You Should Note
With so many people traveling for Chinese New Year and the lengthy factory closures, there are certain things you need to understand if you want to properly manage your Amazon inventory and maintain your expected level of quality.
#1 It Takes Factories at Least a Month to Restart After Chinese New Year Holiday
You might assume that the same workers who left before the holiday will be coming back afterward. However, Chinese New Year is generally the preferred time to switch jobs in China.
Up to a third of workers might move to another factory or decide to stay in their hometowns and not come back. As such, your manufacturer needs to hire new workers and get them up to speed. Because of this, many factories will not be back to full production levels until about a month after Chinese New Year.
Based on my own experience, I had it frequently happen to me that a completely new salesperson turned up after February, who had no recollection of what I ordered before.
#2 There are Increased Quality Issues Before and After the Holiday
Before the holiday, factories are in a mad dash to get orders out the door, which leads to more things being missed and more quality issues than usual. You may see incorrect quantities of units received by Amazon FBA facilities following shipment, because your supplier opts to ship everything as it is (incomplete), as opposed to delaying and risking you cancelling the whole order. After the holiday, the factory needs to hire new workers who are more likely to make mistakes than experienced ones.
As such, consider stepping up your product inspection efforts in the months before and after the Spring Festival.
#3 The Cost of Shipping Goes Up Drastically Around the Holiday
With the lengthy factory closures and the rush to get products out beforehand, manufacturers will often charge more if you want to ship an order close to Chinese New Year.
In addition to your factory taking time off, shipping companies also take time off. As such, heavy volumes are going to the ports before the holiday with only a limited number of ships, which means shipping rates go up.
Shipping rates have been a big topic in recent years, and they are much lower now than during the pandemic, but keep in mind that Chinese New Year is typically the most expensive time to ship.
#4 You Should Never Pay a Deposit Just Before the Spring Festival
Sometimes companies go out of business — and in China, the Spring Festival is the most common time of year to close down permanently. Factories that have not been doing well financially often choose to go out of business during Chinese New Year.
Paying a deposit just before the holiday can be a disastrous proposition. If your factory intends to close permanently and does not tell you, you may never get it back, so be sure to wait until they reopen.
#5 You Need to Forecast Far in Advance to Adjust for Production Times
As I have discussed, several factors affect production around the Chinese New Year. These include the rush before the holiday, the long closure times, and the ramp-up period afterward.
For any orders you would want to receive in March/April, you should start discussing them with your suppliers by around September/October.
When planning schedules, it is a good idea to take past data into account and also consider what may or may not happen globally. It is essential to forecast your inventory needs far in advance and consider many factors when developing your ordering schedule.
When do Factories Close for Chinese New Year 2024?
The dates for Chinese New Year and other traditional festivals are based on the Chinese lunar calendar, and thus they change every year, relative to the Gregorian calendar we use in the West.
February 10, 2024 is the first day of the “Year of the Dragon.” The official government holiday will last from February 10th through the 17th. Some factories may close earlier in the month and many will be fully closed for two to four weeks. So check with your factory contacts to get their exact closure dates.
As I have discussed, Chinese New Year is China’s most important holiday, leading to significant factory downtime and increased quality mishaps. As such, you should step up your quality control efforts around this time.
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