Some small businesses see silver linings in the janky supply chain
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The congested supply chain has been making it a lot harder for a lot of businesses to get the goods they need. That’s affecting car production, imports of products like furniture and electronics, and nearly every aspect of the American economy.
The shortages aren’t great for an economy that’s still recovering from the pandemic. But on the other hand, the janky supply chain has created new opportunities for some smaller businesses, thanks to their size and ability to move quickly.
Take tuxedos, for instance. “There’s this crazy tuxedo shortage in America right now,” said Ken Giddon, who runs Rothmans, a men’s clothing store in New York.
Giddon has been able to navigate that shortage because he has more vendors than his larger competitors. That’s because Rothmans curates the clothes it sells and the suppliers it buys from. Big department stores sell to the masses.
“I’m staring at a board with a hundred different vendors listed on it,” Giddon said. “In each category, I might have 10 guys.”
Because of that long list of suppliers, the tuxedo shortage wasn’t such a big deal for Rothmans.
“We were there to come through for a lot of wedding parties, when, you know, the big department stores weren’t able to do that,” Giddon said.
Rothmans has another advantage over big department stores: Stores have to buy thousands of products at a time from suppliers; Rothmans doesn’t.
“Maybe they have 100 units left of a great sport coat, rather than the 10,000 that a department store was looking for,” he said. “We may be able to buy that, maybe at a better price.”
Other small businesses have gained an advantage because they bulked up on inventory months ago.
Brandelyn Green runs VoiceOfHair, a company that makes hair products for women of color. At the start of this year, she ordered extra plastic bottles, caps and labels for the new shampoos and conditioners she planned to launch.
“I was just afraid to be in a situation where we sell out and then I can’t get more product out to customers for months,” Green said.
In order to produce the new products in time, her manufacturers needed to have enough packaging on hand.
“They might be ready to produce, but if they don’t have your packaging, they’re not going to start your order,” Green said. “So then you’ll wait months and months just for that packaging to come in.”
The decision to stock up on packaging paid off. Green launched her products in July, and she was able to start selling them on Amazon. Meanwhile, a lot of her competitors were struggling.
“I mean, I have definitely seen, like, other brands who sell similar products, where they just weren’t able to do any holiday sales, or they’ve been out of stock for months,” Green said. “I’m in Facebook groups where people were asking to buy packaging from each other.”
Some small businesses have been able to step up and deliver products when their larger competitors can’t.
“Really, the supply chain thing has been more of an opportunity than a problem,” said Jennifer Curran, CEO of Sadie Rose Baking Co., based near San Diego, California.
Curran recently got a call from a large, local client of hers. It needed partially cooked pizza crusts, but its regular vendor couldn’t deliver.
“And in fact, we already were making a very similar product, so we were able to do it right away,” Curran said. “Although it was in pretty large quantities, so we had to ramp up pretty fast.”
The bakery had been making its pizza crusts by hand. Because of the new demand, Michael Lipman, Curran’s husband and the bakery’s president, has been modifying a dough production line to make pizza crusts more efficiently.
“We’re having some special dies made so it will cut perfect 10-inch circles for us,” Lipman said. “And the line will then take them and put them onto pans, and then we bake them after that.”
As a result, Lipman said the bakery will be able to churn out pizza crusts faster. It also owns its own delivery trucks, which will help it avoid hassles with shipping. Plus, it’s a lot closer to the client than the old supplier.
“There’s not much of a supply chain,” Curran said. “It’s from us to somebody down the street or up the highway a couple of exits.”
And because Sadie Rose Baking Co. is a small business, it can make decisions quickly.
“It’s just me and my husband,” Curran said. “We can have a quick talk between the two of us, loop in our operations manager and then go ahead and start testing a product the next day.”
Curran said the new line of business is going to help the bakery’s sales bounce back closer to where they were before the pandemic.
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