2022 State of Supply Chain & Promotional Merchandise
It was a long haul to get through the pandemic as an industry. In addition to dealing with the impact on our families and community, many core events and activations that drive the custom merchandise business were put on hold. We pivoted successfully to help our client with work-from-home kits, virtual conference merchandise, and employee onboarding packages that helped new hires feel part of the team on day one.
While things are looking up, there are three key issues we are still facing (as are many industries). We have given a run down below of the four challenges we are managing and some tips and tricks on how you can navigate these times to deliver amazing, sustainable, and ethical merchandise.
ONE. Rolling Price Increases
The Issue: As a rule, our supplier partners undertake price reviews early in the year. If we see price increases, they are usually in January or February and then they’re set. In the past 18 months, we have seen unprecedented price increases, and they are rolling out multiple times a year. Fueled by inflation, labour shortages, gas prices and global conflict, the upward pressure on prices is real, and our industry is not immune.
How We’re Helping You Manage:
- Our quotes are valid for 30 days. Despite the pressure to shorten our quote terms from 30 days. We are holding ground and will honour pricing for 30 days, even if our suppliers increase prices during that time.
- We proactively flag risks of price increases as part of the sales process. If we know a supplier is rolling out a price increase (we often get a heads up of the date), we’ll share that during the sales process so our clients can take advantage of lower pricing by shifting their approval dates.
- We’re offering alternatives where we can. We identify lower-cost items where possible if we know budgets are sensitive to price increases.
TWO. Inventory Issues
The Issue: This is an issue we’ve been hearing about since covid. Extreme inventory issues, from bike stores with no bikes to manufacturers who can’t find shipping containers to put their merchandise in, this has been one of our biggest challenges of the past two years. Looking for a deep dive on this? Check out this awesome read on “How the World Ran Out of Anything” in the New York Times last year.
How We’re Helping You Manage:
- Presenting Back Up Options (at the beginning). We research similar styles, colours and materials to your first choice so that we can offer a backup option in the case of an inventory issue. Instead of discussing a specific brand and style, we are educating our clients about materials and fit so we can offer up the ‘same’ style shirt from a few varied brands if needed.
- Forecasting Your Merch Needs into the Future. We’re fans of plans. We’ll talk through your seasonal programs so we can forecast and schedule purchasing with ample time so we can secure inventory for your projects.
- Bulk Buying for Future Events (and warehousing if needed). If you have a full season of events and campaigns, consider purchasing in bulk. We can help you warehouse your merchandise offsite (we have partners on the west and east coasts of Canada and the US), and we can ship it to you as needed for future campaigns.
THREE. Shipping Delays
The Issue: When the Ever Given container ship got stuck in the Suez Canal in early 2021, it became the symbol of a broken shipping system. Shortages of truck drivers, warehouse staff, shipping containers and fuel surcharges have all combined to create mayhem in the world of shipping. Add to that a surge in consumer demand, especially for products shipped direct-to-home, and it’s been a roller coaster of a ride.
How We’re Helping You Manage:
- Prioritizing domestic manufacturers. Leveraging our deep connections to Canadian and US manufacturers, we’ve been able to mitigate some of the impacts of global shipping (and keep production local).
- Pre-Planning for ‘Buffer Days.’ Being transparent with clients about these issues allows us to build in ‘buffer days.’ Where a 5-day shipping estimate used to be reliable, we’re finding that it may take another day or two (or three) to get the goods moved from the warehouse to the truck. We’re flagging this as far in advance as possible so our clients can plan accordingly.
FOUR. Labour Shortages
The Issue: There is an acute shortage of workers in the US and Canada. In Q2 of 2022, there were over 5 million more job openings than available workers to fill them in the US alone. Pair that with the reality that Covid is not over, and many businesses are dealing with existing staff having to take sick days. In the promotional industry, this manifests in slower than usual times to pick, pack and ship products, slower production times in our decoration facilities and, at times, a delay in getting critical details like inventory levels from our supplier partners.
How We’re Helping You Manage
- Setting clear timeline expectations. We’re letting clients know our usual turnaround time of 2-3 weeks from proof approval can now be 3-6 weeks, depending on the supplier, product, and decoration type. We set out timeline expectations up front, including recommendations for items that have faster turn times.
- Prioritizing Tech Forward Suppliers. We’re working with a sophisticated supplier base and priorities those partners with online inventory look-up, accurate pricing information and seamless order management technology to smooth the bumps and ensure we have access to the right information at the right time.
- Proactively Connecting on Key Dates and Events. We’re reaching out to our core accounts to ensure we know their plans for the year well in advance. We’re even starting to talk holiday season. Given the above issues, the early bird will get the work as they say.
Reach out to us to get started on your next project and we’ll help you navigate the current state of merch!