Rockland Embroidery: Dealing With Ink Shortages

Andy Shuman, general manager

August has been “outrageously busy” for Topton, PA, contract decorating firm Rockland Embroidery (asi/83089). “Across all facets of decorating, we’re as busy as we’ve been all year,” says Andy Shuman, general manager.

Rockland has been fulfilling a lot of event-based business, like charity walks, along with corporate gifting. High-end retail brands continue to be in demand, and Shuman has noticed a trend for caps and hats in particular. “Headwear is through the roof,” he says. Supply chain issues have worsened, however. Shuman and other promo apparel firms have become somewhat accustomed to dealing with volatility in the garment industry. Now, however, he’s seeing shortages, shipment delays and even rationing with raw materials like screen-printing ink.

“The fundamental problem is there isn’t enough to go around, and when it runs out, you’re looking at longer replenishment times given delays with shipping and delivery,” Shuman says. “When there’s stock, there’s a mad rush for it.”

It’s presenting “a whole new layer of challenges,” he adds. For instance, the shortages are likely to work against turn times, which are already pushed out because of other pandemic-related challenges. “I don’t want to tell a client three days before that we don’t have the ink to print it,” Shuman says. “We’re being conservatively proactive.”

Despite the challenges, Shuman remains optimistic about the future, but he says he’s given up any long-term planning for the time being because of factors like rising COVID case counts and persistent but evolving supply chain issues. “It’s becoming difficult to look at anything beyond a three-to-four-week period,” he adds. – Theresa Hegel

Rowboat Creative: Paddling Hard, Despite Choppy Waters

Lucas Guariglia, owner

Rowboat Creative (asi/313715) continues to stay busy. “More orders are coming in, so we’re on the up and up,” says Lucas Guariglia, owner of the Chicago-based decorating firm. But the frenzy of activity is also coming with a host of challenges, including “unreasonable expectations from people,” long production times on certain products, ink shortages and staffing woes.

“Demand is increasing, but the supply chain can’t keep up,” he adds. “We’re seeing lights of hope, but the industry is having a tough time producing products. If we slide backwards and have another wave of shutdowns, more companies will close.”

Adding to labor issues, Guariglia says, minimum wages and taxes recently increased in Chicago. “Margins in this industry are thin to begin with, so this is very challenging for all of us,” he adds. The company has been able to maintain a hybrid setup for its office staff, but hands-on workers need to be on the production floor.

Despite the ever-morphing and ongoing challenges of the pandemic, Rowboat Creative has been able to stay afloat. “We stayed lean and mean,” he adds. “I don’t know when we get back to normal, if it’s months or years. … We have to constantly watch and keep navigating.” – TH

Compass: A Strong Summer

Josh Levy, CEO

Compass (asi/46170) continues to have a great summer. Sales in July were up 35% year over year, and August sales should be up significantly higher than in 2020. Summer is normally slow, says CEO Josh Levy, so the strong results are very encouraging. “I don’t believe that this is early Christmas orders, at least I hope it’s not,” he says. “I think people may order a little early because of supply issues, but I don’t think people are ordering so much earlier.” The company’s high-end, brand-name tools and outdoor products have proven in demand, including the supplier’s new snowflake-shaped multitool.

While the delta variant hasn’t affected Compass’ sales, it has required Levy to make some careful considerations regarding its employees and working in the office. “Some employees have expressed their reluctance to be in the office with those who aren’t vaccinated,” says Levy, whose company is headquartered in New York City. “While I do wish everyone would get vaccinated, we are not going to mandate it. Luckily, the few stragglers who have decided to not get vaccinated, at least for now, can work fully remote, and that’s what we’re asking them to do. I never want to make anyone feel uncomfortable. I think that’s what allows us to have such a positive culture.”

Levy is unfailingly optimistic about Q4. “It’s normally our strongest time of the year, and I would think that people are going to want to give out high-quality items, this year more than ever. I think after such a bruising past 18 months, companies will want to bring some joy this holiday season.” – C.J. Mittica

Fairytale Brownies: Bring on the Busy Season

Eileen Joy Spitalny, co-founder

Phoenix-based Fairytale Brownies’ (asi/53518) busy season has begun.

The sweet treats supplier saw single-digit growth this past month compared to last August, as clients are making their holiday orders well in advance due to the supply chain disruption. Starting Sept. 1, the company is bringing back pumpkin spice morsels, introducing snickerdoodle cookies and offering festive gift packaging. “We continue to urge people to allow us extra time and to order early,” says co-founder Eileen Joy Spitalny.

Due to the delta variant spreading throughout the United States, Spitalny says that some employees have resumed wearing masks in the office. “Being overly safe is not frowned upon at our place,” she says. – John Corrigan

Starline USA: Fourth-Quarter Optimism

Brian Porter, senior vice president of sales and marketing

The supplier continues to ride the growing sales wave that began shortly after the start of the pandemic last year, says Brian Porter, senior vice president of sales and marketing of Starline USA (asi/89320). It’s tracking to close out August with a year-over-year sales increase of about 85%.

But significant challenges persist, particularly with supply chain. “There’s no way around it,” says Porter. “From lack of labor to load and unload ships, to delays in trucking and rail because of staff shortages and wildfires on the West Coast, it’s a struggle. Honestly, we don’t see this clearing up until late 2022.”

And now with virus cases rising, many companies that had planned to bring people back early this fall are playing it safe and maintaining remote work setups for the time being. Porter predicts that will last until at least the spring. In the meantime, Starline’s drinkware is in particularly high demand among customers, and the supplier is seeing more sales in construction, education as students return to the classroom, and corporate gifting.

“Fortune 500 companies have more cash piled up than ever,” says Porter. “So, they want to actively retain and thank their employees.”

In the meantime, the company will work to manage supply chain disruption as much as possible. “We’re going to keep the inventory pipelines wide open, over-communicate with distributors and keep our lead times where they are,” says Porter. “We’ll be the absolute best partner possible during what’s shaking out to be another record fourth quarter for us.” – Sara Lavenduski

Whitestone Branding: Grinding Out Big Sales Gains 

Joseph Sommer, owner/founder

Despite massive challenges related to supply chain issues, Whitestone Branding (asi/359741) is authoring a success story in 2021.

The distributorship, which has a remote workforce spread around the U.S., has powered a year-over-year sales gain of 238% so far in the third quarter through mid-August.

“We’re seeing activity from many different types of industries,” says owner/founder Joseph Sommer. “Healthcare continues to be strong in addition to small businesses spending.”

While PPE sales have returned for some distributors, that hasn’t been the case for Whitestone. Rather, given the inventory shortfalls that have emerged in the industry due to COVID-related supply chain challenges, Whitestone is selling “the products that are in stock,” says Sommer.

Initiatives like SureShip from Leed’s (asi/66887), and PCNA’s (asi/78897) commitment to invest more in inventory “has come through for us in the clutch,” he adds.

Sommer believes the COVID surge will affect business, but adds that there hasn’t been a noticeable negative effect yet. “We’ve seen events canceled and possibly one or two opportunities lost because of that, but our buyers have been through the pandemic before and know how to pivot like we do.”

Even with the dexterity and sales gains, Sommer admits 2021 has been a grind due to the industry-wide issues with stock gaps, elongated production/delivery times and more, all of it stemming from COVID issues.

“It’s dramatically impacting business,” Sommer says. “Simple reorders have become giant obstacles to overcome with clients. Some understand and are willing to explore other options, but others are just not as accommodating or easy to do business with. It’s frustrating that it seems to be every supplier and every product, with the exception of a few, are having such issues with inventory and the like. I think the surprise has been shortages on name brands and apparel. It’s unfathomable how bad it’s actually gotten.” – Christopher Ruvo

Custom Logos: Strong Bookings, Lagging Billings

Jeff Golumbuk, co-founder/owner

Supply chain disruption continues to prevent San Diego-based Custom Logos (asi/173183) from fully rebounding from 2020.

Although bookings are exceeding pre-pandemic levels, billings are lagging due to shipping delays, empty inventory and other constraints. “Our logistics staff has gone to great lengths to ensure that our orders are shipped and arrive on time,” says Jeff Golumbuk, co-founder/owner of Custom Logos. “However, we’re experiencing tremendous delays with incoming orders and the highest error rate – incorrect or incomplete shipment of goods – that we’ve seen in our 32-year history.”

Because of the supply chain disruption, Custom Logos has been urging clients to place their holiday orders now. Fortunately, many have heeded the distributor’s advice. “We continue to see the highest demand for garments,” Golumbuk says. “Because we’re known for our in-house production and quick turnaround, the result has been record revenues across all production departments.”

With all employees back in the office for several months now, Golumbuk has encouraged staff to get vaccinated while following all state guidelines. “While we feel strongly that it’s everyone’s social responsibility to get vaccinated, we feel employer-mandated vaccinations are an overreach and not something we would contemplate,” he says. – JC

Full Line Specialties: Waiting for More Event Business

Sam Singh, president and CEO

British Columbia remains in step three of a four-phase reopening process based on falling cases, hospitalizations and fatalities, and a rise in vaccination rates. Officials have said the province won’t enter the fourth phase before Sept. 7.

Meanwhile, employees at Full Line Specialties (asi/199688) in Surrey, BC, still have the option of working in the office, at home or a hybrid of both. President and CEO Sam Singh says sales for the first two weeks of August were up 31% year over year, though margins continue to constrict as the company heads into the holiday season. It’s also contending with supply chain disruption, which is poised to worsen before it improves.

“We’ve been pre-booking Q4 orders since June,” says Singh. “Availability of goods will be the number-one challenge, with labor shortages a very close second. Q1 2022 should be stronger than previous quarters, but it will depend on government restrictions and if in-person events will resume on a larger scale than what can take place currently.”

Singh says the opening of the Canadian border to vaccinated Americans is helpful for tourism and related industries like hospitality and food services, though the question of the vaccinated still being able to contract and spread the delta variant is an ongoing concern.

In the meantime, while most event business is still on hold, Singh’s team continues to see demand for warehousing, kitting and fulfillment services. Many clients are also now looking for apparel basics like T-shirts and headwear, as well as higher-end brand names. Singh expects a possible increase in demand for fabric masks since they’re still recommended for everyone indoors.

“We’re seeing opportunities across all industries,” says Singh. “It’s about knowing how to look for them and recognizing them when they’re found. They’re also really dependent on the client, industry and the government mandates affecting their region.” – SL

Moore Promotions: Stressed by Supply Chain Issues

Kelly Moore, owner

Kelly Moore sold large quantities of personal protective equipment during the spring and early summer of 2020 when COVID-19 lockdowns were at their height, but the business waned and ultimately slowed to less than a trickle by the second quarter of 2021.

Now, amid a surge in COVID cases driven by the virus’ delta variant, the pendulum is swinging back when it comes to PPE.

“The surge is prompting more PPE sales,” says Moore, the solo-operating owner of independent Florida-based distributorship Moore Promotions (asi/601617). “There’s been a particular resurgence in demand for PPE from my hospital clients, but all types of customers have started ordering PPE again, including nursing homes and colleges.”

Despite the increase in PPE business, Moore’s gross revenue and profits are down – a frustrating phenomenon given that order counts are up.

The disparity is a result of writing a plethora of what Moore describes as “tiny orders” and having to lower profit margins, give credits and refunds, and pay out-of-pocket for rush delivery and freight costs to make order deadlines. Those actions are all repercussions of the supply chain disruption that’s caused inventory shortfalls, higher product prices, longer production times and delays in delivery of finished orders within the promo industry.

“My suppliers are dropping the ball on me all the time, and I’m having to try to account for that,” Moore says. “Getting my client orders finished and delivered from suppliers has been a big challenge. I have missed deadlines in the past few months and that has never happened before. I feel like all my time is spent making excuses, placating clients. My stress level has been very high, and it’s affecting my work.”

Still, there have been notable successes, too. Moore has been consistently onboarding new clients, which could benefit her business significantly longer term, even if initial orders are on the smaller side. Plus, she recently scored a sizeable victory.

“I won the bid for a massive job I pitch every year,” Moore says. “That has eased my stress. I still am very lucky. I just feel run ragged.” – CR

Jack Nadel International: Beating 2019 Sales Figures

Craig Nadel, president

Business is on the upswing at Top 40 distributor Jack Nadel International (asi/279600), despite an uptick in delta variant-driven COVID cases. “Sales have been very good, and not only are we ahead of last year – way ahead – but also about 15% to 20% ahead of ’19,” says Craig Nadel, president. “The economy does seem to be slowing a little, which I would think would impact us, but so far it has not.”

Nadel does agree that some clients are reinstituting live events, but they’re not nearly back to where they were in 2019 and early 2020. Moreover, the supply chain issues are currently a more challenging problem.

“There are definitely still significant supply chain issues, and if anything, they’re getting worse,” Nadel points out. “Clients, some of them, are listening to us and ordering things early, and I’ve noticed they’re still going for higher-end items.”

He also notes that while “Made in the USA” items piqued interest and inquiries from some clients during the height of the pandemic and in recent months, cost can be a deciding factor. “The trend we do continue to see growing, and maybe because we’re in California, are eco and sustainable items,” he says. “And for sure there’s some client demand for items from women- and minority-owned suppliers.”

And while sales are certainly moving in the right direction, Nadel – who made the decision to bring his team back into offices across the U.S. in July – says the company, like many others, is continually on the lookout for new team members. “Finding support people is an ongoing issue,” he adds. – Michele Bell