We are a manufacturer/distributor of home decor paint and sundry products. Our costs on literally everything we use and sell has gone up significantly on a steady basis for 2 years. Prices on resins and plastics have dramatically increased, which directly affects our bottom line - we use one or the other in 95% of the products we use and/or sell. We always buy in bulk to save on shipping, but even that is now a challenge. For example, In Feb of 2020 shipping on a pallet of product we buy on a regular basis was averaging around $98-106 per pallet. This pallet has 1188 pieces of product on it. So, this means we paid around $.08-.09 per piece for shipping - which we factor into our cost. The product itself cost $.67 each, and the lids for them was $.09 each. In Feb of 2021, this same product cost me $.98 each, and the lids were $.14 each, and shipping on the same pallet of product was $264. So, at that point, our price went up on the 1 item a total of $.50 per item - which equates to an increase of $594 for that 1 pallet. (For reference, we order 3-4 pallets at a time.) In Feb of 2022, for the same product, we are now paying $1.37 for the container, $.19 for the lid, and shipping on that same pallet is now $319. So, doing the math, that's now an increase of $.98 PER ITEM on that pallet from 2020, and an increase of $.49 over 2021, which is a total increase of $1164.24 PER PALLET over 2020 prices, and an additional $582 over 2021. And this is only on ONE of the items we use. We have 26 different containers we use!
Add to this the fact that the product we had always been able to get in stock within 2 weeks, we're now having to cross our fingers and hope we can get it within 6-9 months. This is no joke. We've waited up to 14 months for product we used to could call in an order for on a Monday and receive in house by Friday.
In my business, resins, plastics, pigments, and most all raw materials are now being rationed, which means if my factory is only getting 10 barrels of product each week where they used to be able to get a truckload, then we're in line with every other vendor begging for a share of those supplies.
In our case, we have eaten ALL of these price increases for the last 2 years up until recently. We only raised our prices last month, and only enough to cover our new costs. We're just trying to make the same margins we were making 2 years ago. So, when you say so many people are simply price gouging, I would encourage you to look behind the scenes at what a business really has to deal with. It's not cut and dry, and there are always other factors you may not know about.
We rarely ever get a complete order, so we started ordering double what we need at the time in hopes of receiving at least 1/4 to a 1/2 of that order. The paint industry has been hit very hard with supply chain issues.
The only hope in seeking out alternative suppliers is to actually find someone who had any product you need in stock prior to the slow down. It has happened, but we had to pay more for it also.
When the lockdowns first started, we began increasing our orders because we knew what could happen. The excess supplies only lasted us about a year, and then we were in the same waiting line everyone else was.
In an effort to recoup costs, we started selling directly to consumers on our website. Not competing with our retailers, mind you, because we do not sell into areas where there is a physical location selling our products.
Selling directly to consumers allows for higher profit margins. (We are primarily wholesale). However, we've also changed our marketing angle to gear our product more to the end user, and we've slowed down marketing for new wholesale accounts.
Overall, the supply chain issue for our industry is finally loosening up a bit, but we still have pigment issues.
Hopefully, we'll all be back to better business soon!
