As I’ve been talking to manufacturers over the past weeks, once again shipping issues are potentially impacting the industry. A recent article in the New York Times outlines some of the issues, which include port traffic jams, political unrest, fluctuations in the spot market and more.
It’s a particular challenge for the toy industry because even a two-week delay on deliveries as we get ready for the Q4 sets can have a serious impact on sales. We spoke to one small company that had been having “Where’s my stuff?” conversations with shippers, only to find that product had been rerouted.
Not surprisingly, this will impact small companies the most. They are often heavily reliant on spot shipping rates, which are the most volatile. They are also more unpredictable as in recent weeks, according to several news sources, sailings have been cancelled or postponed, which makes timing and planning more and more difficult.
Like with so many services in the economy right now like airfares (I’m also thinking Broadway ticket prices, of course.), dynamic pricing seems to be the new business practice.
That’s going to be tough to accommodate in budgeting and pricing, particularly when there are so many unknowns. Inevitably, prices are going to have to go up, but how much? And when? The one advantage that I always see in the toy industry is that with so many new toys introduced every year, there isn’t a frame of reference for consumers. Toys are not, say, like eggs or other products people buy every week, so price increases are seen and felt immediately. Still, there will be concern that all rising prices may impact the industry overall and lead to less discretionary spending. (Depending on the family and time of year, toys aren’t always perceived as discretionary, of course.)
The history of the toy industry is one of change and adaptation, but it does seem as though the pace has picked up considerably. What are your best practices for dealing with the current volatility and unpredictable nature of the market? We’d love to hear from you and share your insights on this topic.
