Sourcing and Inventory Management in the Post-COVID-19 Environment
The retail landscape of America is undergoing an undeniable transformation. COVID-19 has catapulted e-commerce center stage, with online marketplaces taking over for brick-and-mortar stores amid safety fears and lockdown restrictions. This has proven just how crucial it is to cultivate a robust digital presence, particularly as retailers are facing economic devastation, with 2.1 million job losses already recorded in the sector. With the impending threat of a U.S. recession, maintaining an agile online seller profile will be the difference between failure and success, in which sourcing the best products and maintaining a streamlined inventory is key.
Despite e-commerce sales presenting a huge opportunity and strong alternative to embattled U.S. retailers, jumping a staggering 49 percent in April, online marketplaces such as Amazon.com and Rakuten — the new virtual malls — are becoming saturated. The potential business benefits of continued growth, overhead savings and convenience are clear, but it's becoming far harder to stand out. Businesses are flooding online to recoup losses incurred during the pandemic. In order to keep a competitive edge, sellers must have a strong pipeline of consistent, reasonably priced and quality goods — or face unprecedented customer churn. Sourcing the right products with the right suppliers, while implementing operational efficiencies, will become more crucial than ever to sustaining sales and growth in this new retail environment.
Expanding sourcing operations to a global network of suppliers will not only ensure low prices for the merchant and the customer, but will also open up a wider variety of products. Product popularity is constantly evolving, particularly during a pandemic. Sellers must be aware of this dynamic in order to adapt quickly and stay current with customer demand. Building out a strong and seamless supplier network will be critical for retailers wishing to expand into fresh markets with confidence, and ensure a consistent service and product line.
International sourcing fairs, such as the Canton Fair, can prove invaluable for merchants in upgrading their supply chains and educating themselves on new product developments — and they're now moving online. This means it's now cheaper and easier than ever before for online sellers to discover new global suppliers, make connections, and compare the latest products and technology.
Significant problems arise, however, when supply chains become disrupted, as long delivery times and stock shortages push consumers straight to the nearest competitor. Integrating smart inventory strategies can enable sellers to pivot their product lines with agility, ensuring consistent stock levels and maximizing the opportunity for cross-border sales. How effectively sellers can manage their supplier relationships — by paying them on time and in the right currency — will be the true test. Some sellers can be reluctant to move on from old suppliers due to this fear, ending up stuck with an inefficient and outdated network, which hurts their bottom line. Having a stable, trustworthy payments process in place can significantly mitigate supply chain disruption, increase profitability, and free up merchants’ time to concentrate on achieving their commercial objectives.
Against the looming economic slowdown, e-commerce is providing a lifeline to professional sellers, and empowering a new generation of online entrepreneurs on a journey of global growth. In order for businesses to achieve a unique online presence, while maintaining profitability, sourcing the best products globally and adapting supply chains to meet changing customer needs will prove essential.
Kenny Tsang is the managing director of PingPong Payments, an innovative payment service provider for cross-border e-commerce sellers around the world.
