The 80/20 of Ecommerce – April 16, 2021

Retail sales explode in March as consumers use stimulus checks to spend heavily

In the US, retail sales “exploded” in March mainly due to the $1,400 stimulus checks issued by the government.

According to CNBC, “Sporting goods, clothing and food and beverage led the gains in spending and contributed to the best month for retail since the May 2020 gain of 18.3%, which came after the first round of stimulus checks.” 

Furthermore, the outlook for 2021 seems very rosy as government stimulus is expected to inject a growth serum into the arm of the US economy.  

Some experts are predicting that this will be the “fastest economic acceleration in nearly 40 years.” 

But the long-term outlook once the economy weans itself off the government checks is less clear.  

All in all, I expect a strong year for ecommerce as the economy rebounds. 

Consumer Prices in U.S. Rise by Most in Nearly 9 Years

If you’re in the US, you may have already felt this - A price hike on almost everything! 

US consumer prices rose the most it’s risen in 9 years this March. This was mostly due to reopenings after the Covid-19 lockdowns.

According to Bloomberg: “Goods prices rose 4.1% in March from a year ago, services up 1.8%” 

In addition “Car and truck rental prices rose 11.7% from a month earlier, most since June, while year-over-year increase was largest on record. Food prices climbed 0.1% from a month earlier, while energy costs jumped 5% in the biggest gain since September 2017.”

Another key reason for the price increases are COST INCREASES.  

According to a study by the Institute of Supply Management, “more than half of service providers reported paying higher prices in March, the largest share since 2011. The ISM’s manufacturing survey showed about 72% of manufacturers said the same -- the second-most since 2008.”

What does this mean for ecommerce sellers? 

If you’ve been feeling the pinch in your supply chain (rising product costs, shipping bottlenecks, additional 3PL costs, tariffs, etc) this may be a valid reason to raise your prices if you haven’t already.

Profitability is one of the key factors that keeps businesses in business so as the rest of the economy is raising its prices it may make sense to adjust your pricing (within reason) now.  

Author: Gary

I work with many Amazon sellers to help them source from China. I’ve managed multimillion dollar sourcing campaigns and have been sourcing from China since 2008. I also am an Amazon Private Label seller myself so I know what you’re going through. My goal is to teach you how to source from China quickly and easily so you can own a 7-figure online business.

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