Credit Crunch Impacting our Industry

Here's a little industry scuttlebutt I picked up this week while visiting with some decision makers on the supplier side of the promotional products industry. As we move toward the last quarter of 2009, we're now seeing the after effects of the credit crunch that has crippled so many companies over the course of this year. Suppliers have seen their credit lines reduced -- in some cases dramatically -- and where this affects us right now is with product inventory.

As America finally emerges from this awful recession, business is (finally) starting to pick up and products are now starting to sell out. A lot of these mugs, pens, hats etc have been sitting in supplier warehouses since last fall and because nothing had been moving, the suppliers stopped buying.

These products are finally selling, but now that credit has dried up, suppliers are finding their financial resources reduced and it's forcing them to make some hard decisions about which products they're going to restock -- at least for the short term. So this means some products which are now out of stock -- aren't going to be replaced anytime soon.

Over the past few days, I've been calling around to try to obtain the best pricing that I can for my clients on certain items, and what I've been hearing is certain colors - or in some cases all colors of some products - are out of stock with no replacement inventory due in at least until the end of the year. And based on what I've heard, expect this situation to continue for some time.

What does this all mean?

For me, it means I'm not placing an order until I check inventory levels first to make sure there's enough available to fill it. And if you're a buyer of promotional products, whether you work with me or someone else, get a confirmation that stock is available before committing to a project -- especially one with a deadline. Or at least have a plan B in mind if your top choice falls through.

Like the economy in general, this situation will correct itself over the long term. But from now through the end of 2009 be advised that stock on many items may well become an issue.