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Economy and available products
In my sector we are seeing large numbers backordered

 3:36 pm on Mar 26, 2008 (gmt 0)

Sector is health supplements and we are seeing large numbers of backordered products from our distributors. Not just one but all of them we use 3 or so and they are all getting in bad shape on the hotter selling products.

I asked a distributor yesterday as to the cause of all the backordered products,we just started doing business with, and his response was the manifactures are holding back due to slowing sales.

I have to admit our internet sales are horrible right now, but our store sales are holding their own. Problem is I am finding it harder and harder to get the hotter selling products for the store.

This really concerns me as if I can get the product what then.

I will hopefully be able to cross sell a similar item in the store but it sure makes it tough on the internet as some pages will have more items backordered than in stock.

Tough to trying to keep up with the increasing number as well.

My question is are other sectors seeing this as well?



 3:44 pm on Mar 26, 2008 (gmt 0)

Yes, I'm seeing this in Computer/CE field as well. Hot sellers are impossible source lately. "Tier-1" retailers get first dibs and us "newbs" get the slim pickins and its rather annoying hehe


 6:02 pm on Mar 26, 2008 (gmt 0)

I've have thought about this too.

Over the past two decades I've seen remarkable improvement in the ability of suppliers to stock merchandise in depth and to get it to us quickly. I gather this is due to 1) prosperity; 2) low interest rates (recently); 3) technology; 4) competitive factors; 5) improvements in transportation; 6) the demands of web retailers. We have one supplier 300 miles away who gets 98% of our orders to us in a day!

During tough times suppliers are reluctant to stock merchandise in depth so as to free cash and reduce markdowns. A major recession will likely hit drop ship retailers hard and store-based ones will again have an advantage in terms of product availability.

Another likely trend if business softens: the breadth of product offerings should decrease.

Our suppliers continue to ship well, but I expect to see increasing stock-outs.


 6:27 pm on Mar 26, 2008 (gmt 0)

I told my wife yesterday this will certainly weed out the weaker ones as our industry has gotten way too saturated.


 8:11 pm on Mar 26, 2008 (gmt 0)

Slow delivery from manufacturers can also indicate that the company has credit problems and can not get the materials they need to make your products.


 8:35 pm on Mar 26, 2008 (gmt 0)

That is correct but it just isn't one company it is multiple brand names. Then it could be several in trouble that I wouldn't be suprised


 9:20 pm on Mar 26, 2008 (gmt 0)

In some industries, a bottleneck could be 1 main supplier of a key material used in the manufacturing process. If that company fails (or has problems), it could affect the entire industry.


 4:03 pm on Mar 27, 2008 (gmt 0)

Fuel/Credit costs seem to be my largest issue and i'm sure its bighting my suppliers as well. My amex credit lines be it cards or LOCS always get throttled the time my sales pickup for one reason or another - perhaps the credit crunch and shaky banks are somewhat to blame for limiting the supply (and further increasing costs in many ways)

You know - the banks who charge a lower apr now just want the money to be worth less so you borrow more ;)


 7:43 am on Mar 28, 2008 (gmt 0)

Wow, thats why most of my manufacturer are back ordering now. I see this across several categories, brands, & manufacturers. Good news is, sales hasn't slowed. I don't know how long thats going to last.


 7:24 pm on Mar 28, 2008 (gmt 0)

I would advise everybody to take a hard look at all their credit cards as I just got a one of mine in they doubled the intrest from 20 to 40% intrest. Canceled the cards and paying them off.

I suppose this is from the increase in people can't pay the bills and they are gonna try to hammer the ones that can pay for now.


 5:59 am on Mar 29, 2008 (gmt 0)

I would advise everybody to take a hard look at all their credit cards as I just got a one of mine in they doubled the interest from 20 to 40% interest.

bwnbwn: got out my new CC bill (received yesterday) and checked. Rate is 12.5%. I've used USAA for at least 15 years. Great company.

I've only owned one CC for many years but with the credit situation getting so nutty I'm thinking it might be a good idea to add one or two more.


 5:16 pm on Mar 29, 2008 (gmt 0)

yes they are I have my Life Insurance with them


 5:13 pm on Mar 31, 2008 (gmt 0)

Ditto about USAA- have CC, car/home insurance, and checking account with them.

My CC rate with them is 0% (for a few more months anyway). :)


 5:46 pm on Mar 31, 2008 (gmt 0)

USAA is a financial co-op for military officers: Insurance, banking, mutual funds, loans and credit cards.

They offer a limited number of their products to the general public which includes me. I have their term life insurance and credit card. I recall asking years ago about some other product (car insurance perhaps) and they said it was only available to members.

Rare example of a company that grew huge by word of mouth.


 6:12 pm on Mar 31, 2008 (gmt 0)

Just to add to what jsinger said- membership is open to current and retired military officers and their dependents.

Interesting- I wasn't aware they offered any services to non-members.

And to sort of get this back on topic...
When the economy takes a downturn, that is a good time to look into non-traditional suppliers (not sure what those would be in this case) and credit sources (credit unions and other co-ops, as long as they are financially sound). Some of the smaller/niche organizations are often better suited to survive economic downturns since they often don't have the bloat of other larger organizations. Also, with their smaller size, they are usually better at working with individual members when problems arise (e.g., being unable to repay loans on schedule).


 6:18 pm on Mar 31, 2008 (gmt 0)

Not exactly on topic but interesting none the less -

What will happen with the USD when/if their economy "takes a down turn" or "slows" in relation to the Euro/Pound?



 6:30 pm on Mar 31, 2008 (gmt 0)

Interesting- I wasn't aware they offered any services to non-members.

Doubt that we non-members get the very best deals. But still good.

And to sort of get this back on topic...

When times get bad, we've often found bargains buying products from distressed competitors. A couple of years ago a large competitor liquidated their inventory quickly and efficiently by means of email advertising. Rented trucks arrived from hundreds of miles away to cart away stock. Virtually everything in their warehouse sold out in about 60 days.


 7:01 pm on Mar 31, 2008 (gmt 0)

Seeing one of the BIG boys in our industry already cutting prices I assume to lower the overhead and reduce inventory.


 10:52 pm on Mar 31, 2008 (gmt 0)

bwnbwn, part of the problem with your widgets could be the fall of the dollar. I sell some natural items and have found that the dollar's drop has made things I have been buying from Europe too expensive.

The other thing is that it could just be that there are climate or political conditions in the countries that originate the item, if it's natural. There are items that periodically are unobtainable in my niche because of civil unrest or fires or whatnot in the originating country. Then every distributor here will be out of it.

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