Small retailers are playing with hoarding due to supply chain issues

Megan Searfoss was hoarding sneakers in Connecticut.

Ms. Searfoss, the owner of two walk-in shops in Darien and Ridgefield, Connecticut, would normally have around 3,000 pairs of shoes in stock before Christmas. But as she watched supply chain worries rise in Vietnam this summer and into fall, she secured a new warehouse and now carries around 4,100 pairs.

It’s a costly gamble for Ms. Searfoss, who said she was being given about $ 165,000 more than what is usually given in November due to concerns about potential shortages.

“It’s about placing a big bet and anticipating that what all the analysts are saying is right,” said Ms. Searfoss. “Usually we get through the New York City Marathon and then we stop buying shoes – we sell what we have and go super, super slim into January. But we’re told not to do that because there just won’t be any shoes. “

The construction of running shoes in Connecticut is just one example of how supply chain problems and pandemic bottlenecks affect thousands of small businesses across the United States this holiday season. While the widespread availability of vaccines results in a busier shopping season than last year, businesses of all sizes are grappling with the impact of overseas factory closures, port backups, and trucking and other labor shortages.

For many small businesses, this year’s unpredictability has forced them to make buying decisions months or weeks earlier than usual and tying up more money in inventory, which can be risky.

“The most important thing is that you really have to order in advance,” says Dan Quinn, owner of What We Make, an Algonquin, Illinois furniture company that sells tables and other goods through Etsy. “I have 14 weeks of projects. I have to get most of the stuff inside as soon as possible and buy it until you basically have a supply. “

While many small businesses are facing production problems overseas, some have used this moment to their advantage. Etsy, which runs online stores for millions of sellers, said more than half of its US sellers source materials from their own states, which allows them to bypass many of the supply chain problems that affect the global economy.

Etsy shops “don’t have the complex supply chains that are prone to single sources of error,” said Josh Silverman, CEO of Etsy, in an interview.

Yet the range of scarcity can manifest itself in unusual ways.

Isabel Amigon, owner of the Sololi online shop, is still waiting for an order for Christmas tree decorations, which she placed in April. The manufacturer drew her attention to the fact that the order would be delayed due to a lack of string to tie the decorated balls.

Ms. Amigon, who lives in Westchester County, NY, said she was concerned that if she didn’t get them in time for the holiday season, she would have to wait until next year to use the stock. The lack of string has also led them to remove certain housewares like table runners and washcloths from their website.

“Even if I get them by the end of November, I won’t be able to sell them all because most people have already bought their ornaments,” said Ms. Amigon. “I placed the orders early and I still have to face this situation.”

Other missing elements are more traditional than string.

Earlier this year, Angela and Sean Arnold planned to order another set of Disney princess dolls to fill some shelves at their Playmatters Toys toy store in Pepper Pike, Ohio. However, in September they received a notification from the dealer advising them and other toy shop owners that the items were “out of stock for an indefinite period” because the factory in Vietnam that makes the dolls was due to a Covid-19 19 outbreak was closed.

Although they anticipated delivery delays and ordered some toys in mid-May instead of August, they could not forestall the global disruption.

And it’s not just dolls. The couple missed out on other toys and electronics due to delivery delays or disruptions at manufacturing facilities in Vietnam. The couple have also been forced to raise the prices of some products as they face higher transportation and wholesale costs from toy sellers.

“Some of the items that we ordered in June and July are still to come,” said Arnold.

Because of these types of delays, Etsy viewed this moment as a moment for small businesses to offer gift options that don’t rely on overseas factories and shipping. Additional consumer interest in small businesses, whether online or offline, would likely be welcome after the pandemic dealt a crippling blow to so many over the past year.

Etsy said searches for living room furniture were up 1,572 percent and saw less dramatic but significant jumps for dining tables, checkers, or chessboards, suggesting that some shoppers are coming to the site instead of walking into chain stores.

Etsy has learned how to better cope with large spikes in demand after face masks exploded as a category on the site at the start of the pandemic, and has made improvements to alleviate the shipping problems it faced at the time. Mr Silverman said that virtually all items from sellers in the United States now have an expected delivery date, which was not the case a year ago, and buyers can filter products by geographic area to buy from vendors in their area, which can expedite shipping .

The company also said it will check with sellers to ensure they have sufficient raw materials and supplies if its technology detects spikes in demand for specific items.

Mr Quinn, the owner of furniture retailer What We Make, has seen its business boom as Americans struggle with long waiting times and unavailability of chain furniture. Customers were willing to wait 10 weeks for a dining table from him, especially after waiting 20 weeks at chains like West Elm.

“The big stores don’t have a lot of things that they normally have. The positive for us is that people are forced to look at other options while settling for the simplest option beforehand, ”he said.

Still, he has seen his business disrupted in other ways, including a sharp spike in material prices and a scramble for scrap wood, usually sourced from old barns.

“The people who dismantle the barns for the materials we use have often been laid off or gone unemployed,” Quinn said. “So we had to try to stock up on material and order well in advance, which is what we used to do.”

Although Mr. Quinn has succeeded despite competition from large furniture sellers, the country’s largest retailers are often better equipped to deal with supply chain problems than small businesses. Companies like Walmart and Amazon are massive enough to charter planes to get certain goods.

Jeannine Cook doesn’t have this luxury. Ms. Cook, the owner of Harriett’s Bookshop in Philadelphia, noticed over the summer that publishers were struggling to deliver their book orders and some were unable to even provide a schedule for when the orders would come in. The problem continued to spread in late August.

Ms. Cook, who opened a second store in Collingswood, New Jersey, in July, said more and more customers were canceling their orders from the bookstore.

“It makes me nervous because I don’t want people to feel like they’re not getting what they need or want,” said Ms. Cook. “It’s difficult because we’re already competing against the big companies that have so much more infrastructure than we do.”

A recent study by Adobe has shown that in October the number of out of print messages more than quadrupled compared to October 2019. It’s one of the reasons retailers, including small businesses, have urged the public to shop earlier this year to grab gifts for the holiday season.

“I hate that we went straight from Halloween to Christmas now,” said Ms. Searfoss, the runner’s shop owner, who said she started Christmas marketing for the first time on November 1st. “I don’t want people to get hectic, but I think it’s pretty serious that they won’t get what they want this year.”

She assumed that delivery delays and problems with out of stock goods at larger chains could drive business into their stores. “People are buying everything they can at every local store they can these days before Christmas,” she said.

“It’s just a little stressful for me to think, ‘Okay, look at everything I’ve bought,'” said Ms. Searfoss. “If I buy it, will they come?”