Supply Chain, Inventory Woes Persist and Could Worsen

The supply chain issues that have been driving up product prices and causing inventory shortfalls in the North American promotional products industry during the economic recovery that’s followed COVID-19 shutdowns show no signs of abating and could potentially worsen.

That’s the message from industry suppliers who have been trying to mitigate the issues in order to provide sufficient quantity of quality cost-effective products in a timely fashion to help fuel promo’s sales recovery from the pits of the pandemic, fallout from which drove down industry distributors’ collective annual revenue by nearly 20% in 2020.

Accounts from distributors indicate that demand for promo items has been increasing significantly in recent weeks, as the U.S. reopens and life returns to something closer to a pre-coronavirus normal amid advancing vaccination rollout, the lifting of societal restrictions, easing of mask mandates and the return of in-person events.

Still, shipping/fulfillment issues, rising raw material/labor costs, difficulties suppliers are having hiring enough staff, unfavorable exchange rates and other factors are contributing to insufficient inventory, higher product prices and lengthened delivery times for orders, which make it more challenging for distributors to meet client needs and capitalize on rising demand for branded merchandise.

“Inventory issues, for example, could stifle growth,” says Sarah Whitaker, owner of Hopkinsville, KY-based Williams Advertising (asi/360402). “If I can’t sell you the shirt you want, you’re either going to wait to order, or not order at all, unless we can offer a very similar option.”