PANIC surely causes stress. Sometimes that stress is unavoidable and we need to fire on all cylinders and live off adrenaline to get through it. In other circumstances, though, we can avoid the panic by heeding some warning signs and thus preparing for PROFIT.
Right now, we need to take note of what’s happening in Asia and how it is affecting costs, timelines and program commitments. This is what we understand to be our current reality.
Daily protests by workers regarding wage negotiations have led to factories competing for a shortage of workers at a higher cost. In addition, China’s rapid growth has fuelled demands to support its internal domestic economy and the dramatic shortage of production capacity has been further impacted with the unbelievable rate of factory closures. Add to this rising oil and cotton prices and container shortages, and well, let’s just say we need to change our expectations with respect to imports; it’s a producers’ market.
The impact is two-fold in terms of the effects on both imported stock-held goods as well as custom. We do have empowering choices but need to factor in the new realities around China-made goods when creating the initial plans and making those buying decisions.
STOCK: Rising labour and raw goods costs will also be reflected in imported stock goods. Verifying prices at the time we book will ward off surprises. The good news: domestic inventory levels, especially on garments, are much stronger this year than last. If quick turn-around is what we need, this is the way to go.
CUSTOM OFF-SHORE: Twelve week ocean delivery is an unreliable time frame. Save the planet, and your bottom (line), by planning now for June delivery by ocean.
CUSTOM DOMESTIC: Surely the way to have more control is to manufacture in Canada or the U.S. Imported raw goods are affecting finished prices and domestic labour is still slightly more expensive but time and control are on our sides keeping the manufacturing, and the money, at home.
Knowledge is power, but it’s how we apply that knowledge that will determine our profit path.