As someone trying to grow their business, we try dozens of strategies, with a somewhat hit or miss success rate. Some strategies will work, some don’t, and many that do work only have only temporary success. One strategy that is recognized as one of the best is the distribution of promotional products. The brand name awareness is the best part in addition to the level of sophistication and professionalism that is recognized by consumers. However, there is a problem happening across the globe right now labeled as the global supply chain collapse and it is having a devastating impact on the world’s economy.
The Global Supply Chain Collapse
Since COVID began, nothing has been the same when it comes to how trade is conducted. There are trade wars, congestion in ports, weather events, and more unfortunate factors contributing to the way things look today. Problems that were never even conceived of are happening so companies have had to react in the best way that they can. Supply and demand lost their harmony and the rhythm is struggling to return. Here are the most impactful factors that are being tackled now.
Supply chain managers are now dealing with increased prices of fuel, transportation, logistics, labor to combat port congestion, expediting, and much more. This is hurting profits and customers are having to pay more for their goods. Unfortunately, promotional products are affected so there may be a price increase until things eventually go back to normal.
Something you may already be aware of is the chip shortage that is affecting everything ranging from toasters to cars. In fact, the automotive industry has been hit the hardest by the chip shortage with a large percentage of new cars sitting idly unable to be shipped, which is subsequently increasing the price of used cars in order to try to maintain profits somewhere. This reaction of shipping delays leading to increased prices is evident almost everywhere.
With a whole new reality to the way shipping was once done, companies have been doing their best to be reactionary and creative to find solutions and make changes to the current protocol. With the increased complexity, it hasn’t bode well in general due to failures in cooperation between companies and employees. Everyone is trying new things out with a handful finding a bit of success, while most do not.
How to React Appropriately
These tips will cover the best way to react and plan ahead.
As a business owner, it’s important that you are unable to identify your vulnerabilities during this difficult time and before the potential next one in the future. Finding risks may require a fair amount of digging and going above and beyond understanding your own supply chain.
It can be expensive to do such internal investigations, but it is worth it and can be cost-effective if done correctly. Such things to look out for are determining how long your company could manage during a supply chain failure without going out of business, and identifying alternative suppliers for products or parts that may later be in danger of delays and price increases.
Hold Extra Inventory
When alternate suppliers are scarce, it’s important to have extra inventory available. This, of course, can tie up some cash and seems counterintuitive, but it’s extremely important and is what the major players do. Weigh the potential collapse of your business when making this decision. Keep in mind that there are huge costs in supply chain disruption such as higher prices for materials in short supply, time and effort required to secure the hard to get items, and lost revenues.
You can probably understand now that having extra inventory available that you pre-order at wholesale for a low cost is advantageous. When you have the extra inventory, you can still sell your products without dealing with higher prices, slower shipping times, and more effort to secure just a limited supply.
Experts are predicting for things to not get better until midway through 2022. Businesses need to be prepared to make some big changes in order to survive. When it comes to marketing your business, the best thing to do now is to order your needed promotional items early to avoid such inconveniences.
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