Start your holiday shopping now or risk supply chain issues

Yes, it’s bit much that the Pumpkin Spice Latte comes out in August and that my local grocery store has had a special Thanksgiving aisle set up for weeks. But when I tell you that now is the time to start your holiday gift shopping, it’s because if you don’t buy soon, supply chain issues may make it tough to get what you want later.

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There are labor shortages and COVID outbreaks that have closed down factories, and kept workers from unloading shipping containers and driving trucks. H&M, Bed Bath & Beyond, and Nike are all underwater. One toy maker told Bloomberg that around $8 million worth of its toys are sitting in a factory in China because of a shipping container shortage. One of the country’s largest toy companies said it had more than 600 containers filled with toys that were stuck in the port of Los Angeles for six weeks waiting to be unloaded.

But Americans are buying; we’re expected to spend 7-9% more than last year’s holiday season.

Mark Kapczynski is the chief marketing officer at Gooten, a print-on-demand business that doesn’t manufacture a product until it’s ordered. He says the old supply chain model has got to change.

“The more stops the package has to go along the way to getting to its destination is what’s hurting us right now,” Kapczynski said. “Stuff has to go from one country to another country via boat, over to a distribution center via train or a truck, to a warehouse, and then to a store or to online. Then it has to get repackaged and get back on a truck or an airplane and shipped to a consumer. When you have so many hops in the supply chain network, you’re bound to hit the issues that we’re facing.”

If companies cut down on the number of stops their products make, won’t it be more expensive? Didn’t we start manufacturing overseas to significantly lower prices?

“Here’s the misnomer: I think what tends to happen is that people look at the unit cost. Like a stuffed animal, they think they can buy cheaper internationally than I could here in the United States. But they’re only looking at the unit cost, they’re not looking at all the effort to ship it and house it in inventory,” Kapczynski said. “Could you order all the raw goods and then just have them stitched together here? And do it as efficiently and cost effectively? I think you could probably get pretty close.”

He thinks it’s ridiculous for companies to have to order tens of thousands of units of a product they may not even sell. Kapczynski believes on-demand production should be the way of the future.

“To me, what’s fundamentally wrong is how we sell stuff, how we have to pre-create inventory that sometimes, and most times, doesn’t even get sold out,” he said. “Look at Tesla. Tesla doesn’t build anything until it’s already purchased. Europe doesn’t have dealerships with cars sitting on them. That’s more of a U.S. thing.”

Reports anticipate these supply chain issues could last for years. I asked Kapczynski when he thinks it might correct.

“I hope it doesn’t! It’s good for businesses to have to make changes, doing things that also are more sustainable and support our planet,” he replied. “I don’t want it to go back to the old way where we’re just having all this stuff being trucked, and trained, and shipped all around the world. I want to go to a different, cleaner model where we only make what we consume and consumers will benefit, retailers will benefit, and ultimately people that manufacture and ship will have a little bit of pressure relieved off them.”

This holiday season, expect higher prices and less inventory.

To get people shopping early, Amazon rolled out “Black Friday-worthy” deals on Monday, and Target plans to do the same next week. To avoid the supply chain issues, shop in person at local shops or, on the other side of the coin, at big box stores like Walmart that avoid the cargo issue by chartering their own ships and using their own planes.

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