How Can Marketplace Sellers Deal With Supply Chain Issues?

Take note of your inventory, consider swapping more expensive merchandise, and give yourself some extra leeway.
man scans warehouse package

DealNews last visited the potential for supply chain issues and how to prepare for them in March 2020, at the beginning of the COVID-19 pandemic. The world of 2021 feels like an entirely different place. And while most consumers have newfound compassion and understanding for what businesses are going through, it doesn't mitigate the loss of income or sleep for many business owners.

Dealing with supply chain challenges has become par for the course in many sellers' cases. But why? What's causing these extreme complications both globally and domestically? And what can you as a Marketplace seller do to stay afloat despite them? Keep reading to find out.

No time to read? Check out this edition of the DealNews Seller's Guide!

How to Deal With Supply Chain Issues in 2021

Monitor Inventory Closely

According to the Council of Economic Advisers, domestic supply chain shortages and interruptions are largely due to rapid fluctuations in supply and demand. At the beginning of the pandemic, inventory-to-sales ratios surged when businesses couldn't sell their merchandise. However, the pendulum has swung in the opposite direction at this point. Now businesses can't keep enough merchandise in stock. For example, in February 2020, retailers carried 43 days' worth of inventory on average. Today the average hovers around 33 days' worth.

SEE ALSO: Why You Should Think About Your Black Friday Campaigns Now

Stock Up Strategically

Low inventory is only one of the problems wreaking havoc on supply chains. A growing demand has caused prices to increase, leaving some struggling businesses behind. Meanwhile, factories are still playing catch-up after closures during COVID-19 surges. What's more, shipping container shortages and limited air freight capacity are slowing down shipping and lending themselves to 2021's supply chain challenges.

Your best bet is to be cautious about purchasing too much inventory or waiting for your stock to dwindle too low. Keep a reasonable amount on hand, as long as you have the ability to do so, and you should be able to weather some supply chain issues.

Beware of Smaller Staffs

Then there's the labor shortage. In April, 9.3 million jobs had opened up. With the ongoing fears of COVID-19 and the ending of certain government benefits, as well as only 50% of Americans being fully vaccinated, the job market is unstable. Many American workers are questioning what they want from a job, and businesses across industries are reporting difficulties in staffing as a result.

Adding two to three weeks to your own business supply chain could help you ward off supply chain problems.

These labor shortages can result in a myriad of issues at every stage of the supply chain. Retailers may find it harder to put physical stock on shelves — even if they have the merchandise — due to a lack of workers available to do so. And manufacturers may have trouble filling orders — not because the products aren't there, but because they don't have the physical labor necessary to do the job. These are important factors to keep in mind when managing your own inventory, as they could delay receiving replenishments.

Learn From Prime Day

So what else can Marketplace sellers do to protect their businesses and manage these supply chain issues, especially with the holiday season looming? Lessons from Amazon Prime Day 2021 might be the best indicator of how to move forward. During a time when the possibility of supply chain failures threatens everything, what have successful sellers learned?

What we now know is that businesses that had planned far ahead seemed best prepared for this June event. And planning far in advance may be necessary now. Shortly before Prime Day 2021, CNBC reported that more than two-thirds of the National Retail Federation's members said they'd had to add two to three weeks to their supply chains.

Reevaluate Your Inventory

If your margins don't allow for that added 3-week buffer, consider swapping more expensive inventory for less expensive items. For example, toy manufacturers have been anticipating shortages for months. Take the time now to map out your timeline and a solid plan of action on how to deal with these potential shortages, and adjust your inventory as needed.

SEE ALSO: The Best Inventory Management Software for Amazon Sellers: 6 Top Tools to Consider

Use Additional Vendors

Consider reaching out to additional vendors for some of the more popular items, as well as finding alternative merchandise to pad your inventory. With the holidays ahead, don't let global supply chain interruptions halt your business flow. Preparing now means being able to give yourself a chance to meet these challenges head on.

And if all else fails, call the North Pole. Maybe Santa can help.

DealNews Contributing Writer

Joselin's work has appeared in The New York Post,, Morning Edition, Life of the Law and xoJane. Her books include The Family Gene and The Gamification Revolution. She sometimes remembers to tweet with a handle that economically combines her first and last names: @joselinder
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).


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