Out of Stock. Backordered. Backorder delayed. Price hikes.

Are these starting to sound familiar? If not, consider yourself lucky. As the world starts to reopen, people are, rightfully, excited about being able to be with people again. The demand for promotional products has skyrocketed. While that would traditionally be great news for us swag and uniforms distributors, there is a lot going on behind the scenes. Thankfully, Genumark has secured special relationships with our production partners that give us the ability to mitigate some of these issues, however, there are a lot of factors at play.

Simply put, here is what is going on in the global promotional products industry right now:

Promotional Products Supply Issues AMA with Liz

To help make sure you have the best information, we did a little AMA (Ask Me Anything) with our Director of Supply Chain, Elizabeth Wimbush.

Liz, what is going on out there?

Such a loaded question! Simply put, there are a lot of factors that are causing major disruptions in the global supply chain. While this directly applies to the promotional products industry, pretty much all industries are being affected right now. It’s like the Wild West out there!

Can you give some examples of some of these supply chain disruptions?

Can I ever! The main one, and it probably goes without saying, but, COVID is still causing major issues in shortages – most factories and a lot of shipping/freight companies are still not running at full capacity from having been shutdown or having its production downsized. Ramping back up takes a long time. Even where they are back at total capacity, there is a massive backlog that needs to be dealt with. That’s just one issue. Another big one is shipping demands have gone through the roof. International shipping has been, and for the foreseeable future will continue to be, bonkers! Remember when that giant ship, the Ever Given, blocked the Suez Canal? Well that was just the tip of the iceberg! There were already major shipping issues due to, you guessed it, COVID but also, the Chinese New Year break, a massive surge in demand in product with economies reopening, and the increased costs in shipping.

Lot’s to unpack there! What does all that mean for stock on product?

Well, as we are currently seeing, stock forecasting is going to be a little touch and go for a bit until the supply chain can settle itself down. Quotes given on a Monday could suddenly find the stock needed for the order be completely depleted by Friday, in some cases, even by the next day. My advice to anyone planning to have branded products for their activation is to plan ahead and once presented with some options, act as soon as they can. Typically, there would be lots of alternatives to help bridge the gap when a product is out of stock, and we’re here to help find the right ones for you, but the same rules apply with the alternatives. Act fast to hold stock!

Act fast. Got it! Anything else clients should consider? You mentioned a rise in costs before.

Thanks for bringing that back up. Guess I will have to be the bad guy and talk about what people like to hear the least. Costs have gone up across the entire industry. For new clients, they may be unaware but for our longstanding clients, they may notice that some items they have ordered on a regular basis will see their costs rise. Some of these I highlighted already, but they are worth mentioning again. Here is the basic rundown of where we are seeing all the increases:

Shipping is a major factor in the rise in costs. Our production partners are getting beaten on their freight contracts as it is becoming expensive to ship due to demand and backlog. Costs have skyrocketed to over 200% on average, with ocean transportation and logistics up approximately  293%, year-over-year!

Tariffs and exchange rates are the next factor. While we charge you in Canadian dollars, the vast majority of the industry pay their bills down the supply chain in USD. With the US dollar weakening, this is in turn making products more expensive for end users, but also devaluing the wages that those in manufacturing companies are making. While many manufacturers have made the shift out of China to avoid Section 301 tariffs, the exemption that were given to countries like Indonesia and the Phillippines, have lapsed, leaving those exemptions in limbo.

The cost of raw materials, used to make the promotional products we know and love, have also risen. By itself, this makes each product more expensive. For example, the cost of cotton has risen 31% while polyester has gone up 29%.

So, the big question then is what is Genumark doing to combat this?

Really putting me on the spot here! Well, what clients can be happy about is that Genumark, as a leader in the promotional products industry, is able to mitigate some of these costs but not entirely. Due to our size, relationships, and buying power, we are still able to get the best rates from our production partners, which means that while prices may go up at some point, we do not see continual fluctuation in pricing. We work with the best production partners in the industry, and they are hyper-aware of the issues we and our clients are facing. They are reworking their forecasting models as a result. We are working our butts off to try and make sure our clients are impacted as little as possible!

Well, that’s it for now. You are off the hot seat! Thanks, Liz, this really helped shed some light!

No problem. Next time, let me have my second coffee first 😉

If you have gotten this far, we hope you found this useful. If you have any more questions or would like further clarification, please contact your Genumark Account Manager or drop us a line!