How will COVID-19 Affect Beauty Manufacturing?
The Coronavirus
In case you have been living under a rock for the past few weeks, you’ve certainly heard of the Wuhan Coronavirus, better known as 2019-nCoV. Given the virus’s origins in - and widespread infection throughout - China, where the majority of manufacturing originates (source), there’s certainly cause for some alarm among entrepreneurs, especially in the beauty space.
So should you be worried?
The truth is, like it or not, the coronavirus can and will affect manufacturing timelines for beauty entrepreneurs. But it’s not just the coronavirus that you should be worried about, global pandemics are here to stay.
Here’s what you can expect in the coming days and weeks, and how you can prevent yourself and your business from getting caught off-guard by the next global pandemic:
What To Expect: How the Coronavirus Will Affect Your Indie Beauty Business
First, you should expect that everything will be appropriated delayed. Whatever timeline you were currently on for manufacturing (given that you had already placed an order), will be approximately 4-6 weeks behind schedule.
Before you freak out, realize that most flights into and out of China are currently canceled. Factories are closed for at least an extra week beyond the normal Chinese New Year schedule, because of a decree from the Chinese government, not of their own volition. They’re literally not legally allowed to go back to work yet. Things really are that serious.
The epicenter of the outbreak is a mere 400 miles from the (beauty) manufacturing center of China, where all the packaging is made. Going back to work early in this area will increase the risk of the epidemic becoming a pandemic, and for the secondary and tertiary effects of the outbreak to last longer than necessary.
In other words: It’s a little short-term pain for a better long-term outcome. We all just have to rough it out.
So, what should you do?
Our best advice is to continue on your ordering schedule, as if nothing is happening in China, because if you delay your order just to try to buy yourself more time, you’ll find yourself at the end of the queue, with an even longer lead time.
The truth is, regardless of whether or not manufacturing/shipping will be delayed from factories not reopening, factories are still taking orders and still creating order queues.
So our best advice is to carry on, knowing that the delay is inevitable and uncontrollable, but that the best course of action is to stay the course. Prepare your customer and vendors for the potential delay in shipping or production, but don’t otherwise change behavior.
As it stands, there is no good way around China for beauty packaging (except to buy up all the stock of the Chinese packaging held by US companies, which is again, a very short-term solution), and the virus has already taken hold of China, so there is no Plan B.
How to Prepare for Future Pandemics + Reduce Panic on your Business:
Moving forward, one needs to realize that pandemics are simply a part of the future.
You can expect a pandemic every couple years, not every hundred years. Even looking back at the past two decades, we see swine flu, avian flu, MERS and SARS, all of which affected the global economy on some scale. The Wuhan coronavirus is the just the newest epidemic (soon to be pandemic) to affect the globe.
The best way to prepare for a pandemic, is to always have enough stock to last you through your manufacturing cycle + an additional 3-6 months. This could look like many things, depending on your products and their respective shelf lives. It could look like:
Running predictive sales and inventory numbers, then keeping 9-12 months of stock (finished goods) on hand
If your products are manufactured in the US, Keeping a manufacturing run worth of unfilled packaging on hand at all times
If your products are manufactured in the US, keep a manufacturing run worth of unfilled packaging on hand for your most popular product(s) only
Research ingredient origin (natural and synthesized) and stock up on any ingredients manufactured in past or predictive epidemic outbreak zones (e.g. Asia, Africa)
Worst Case: Be prepared to run a pre-sale, in case of emergency; don’t run a pre-sale until you have a decent prediction on the restock date, lest your customers get restless
In addition to anything listed above, feel free to brainstorm and add your own ideas.
Conclusion: How to Protect Your Brand in the Face of Pandemics
Indie Beauty brands always strive to keep batches small and fresh, but in the face of a pandemic, this strategy can certainly backfire. Always have a strategy prepared for what you will do in the face of an epidemic abroad or - perhaps even worse - a pandemic.
The best time to start preparing is now.
Given that mask hoarders have already made staying healthy difficult, expect packaging hoarders to make your manufacturing life that much more difficult in the near future.
