Small business owners: We will go to China to make sure we have enough inventory

2021-11-18 09:25:49 By : Ms. sandra Zhang

Supply chain issues have led to shortages of pet food and Christmas trees, and shortages of toilet paper and baby products. Major retailers such as Wal-Mart and Home Depot have been able to rent private cargo ships to maintain inventory on shelves. In an extreme case, the manufacturer of Doudoubaby chartered more than 150 flights from China to bring stuffed toys to the United States, bypassing port congestion. But these are expensive solutions that small businesses cannot afford. 

To ensure that they have enough products to satisfy customers, small companies have to be creative by minimizing delays. In some cases, this means going to China to pick up the goods directly from the factory. In other cases, it has led companies to open their own warehouses in the United States to bypass congestion in California ports.

Pish Posh Baby is an online baby product store with a physical store in New Jersey. It used to occasionally pick up goods in China. This is done to save money, because manufacturers sometimes offer discounts for direct delivery from their factories. But due to the current supply chain blockage, the purpose of going to China is different. 

Charlie Birnbaum, chief operating officer of Pish Posh Baby, said: “Nowadays, manufacturers usually don’t have enough profits to discount, so we go to China just to have products.” “We are not saving money, but Is doing this more frequently."

We went to China just to have products. We are not saving money. "

Birnbaum said that by introducing product containers on its own, Pish Posh Baby can better control distribution and deliver products to customers faster than other methods.

"We usually rely on American distributors to pick up products from China and bring them to their warehouses. Then we place an order, and they ship it to us, then to our warehouse, and then to the customer," Birnbaum Say. "What we are doing now is to place a larger order and send it directly to our warehouse."

Pish Posh Baby is not alone. 

Kids2 is a toy manufacturer with multiple brands including Baby Einstein. Its owner and CEO, Ryan Gunnigle, said that the demand for retailers who wish to pick up goods directly from its Chinese factories has increased. A total of 10 major retailers came to him and asked to do so.

He also helps partners secure certain items that are difficult for them to stock, such as computer chips.

"Retailers come to big companies like us to help them solve some supply chain challenges," said. "We have a retailer who came to us and said that we can work with you and work with you to increase our demand by 30%. Conversations like this have appeared four or five times."

Gunnigle said that he saw the direction of development early on. Fortunately, his company had established a solid footprint in China before the supply chain began to recover.

"Having local infrastructure allows us to increase response time and seize more opportunities," Gunnigle said. "But we really have to change the way we work. We hold supply and demand meetings once a week. In fact, we have a lot of inventory in our supply chain, and you don't want to end up with too much or too little inventory."

He said this is a good balance because even with its infrastructure in China, if Kids2 is out of stock, it will take about six months to replace it. 

If the company is out of stock, it will take about six months to replace it.

This is because even if the company can actually obtain products directly in China and bear the cost of shipping them to the United States, the backlog of goods is waiting at American ports. The ship was idling at sea in ports along the coast of California. Once the ship is able to dock and unload the freight container, the container winds through the port's processing center, waiting for the shipper to label and pick up the cargo. 

Lectric eBikes CEO Levi Conlow said that this process may now take weeks instead of days. Conlow said that from the moment the inventory arrived at the port, it would take him 5 to 6 weeks to arrive at the worst delays in February and March. 

"The third-party logistics distribution center in Los Angeles is no longer available. They don't have enough bandwidth to solve the problem," he said.

Long before the supply chain was blocked, Lectric electric bicycles had been struggling to maintain inventory and meet demand. As a result, Kang Luo used to spin fast. When the port situation started to become crowded this year, he began to lay the foundation for completely abandoning the processing system of the Port of Los Angeles and acquiring his own warehouse. 

"Trying to obtain inventory has always been a challenge. We have never been spoiled by the simple or sane world," Conroe said. "We realized that we had to leave Los Angeles, and we brought internal realization to Phoenix in August. Within 30 days, I became a stocked company."

The major steps taken by small companies to maintain inventory and meet demand show how much pressure the supply chain still exerts on retailers. As Birnbaum said, "From purchasing materials to delivering them to our customers in the United States, there are always problems."

Ahiza García-Hodges covers the intersection of media, technology, sports and business.