Mostly manufacturers in my industry are really behind the times. Pre pandemic, a leading company would be out of stock anywhere from 90-180 days on items. We have doubled revenue every year since we went online. This leads to shortages for us. No matter how many times we ask to meet with companies logistics people, they always underestimate us. We always fly out, meet with them. Tell them we are going to sell more than the rest of the USA combined and will be your #1 buyer. They always say, we have no problems meeting demands. Then a month later, "we've never seen this kind of demand before". Essentially these companies have never seen true influencer marketing. They don't account for, we are going to purchase more than anyone, but our marketing is going to drive the demand for the product on every single website and retail brick and morter store in the world. Sure we don't reach everyone, but we hit 3+ million people a month on youtube alone. They are used to putting advertisements in a fish magazine with 10k readership.
One example would be a med, our intial order was more than they sold the entire year of 2019. We sold it out in 30 days. On top of that, we started just producing our own products instead of waiting for a container to come in for a manufacture, then route straight to us. Our analytics can forecast much better than our suppliers as we can move on trends in real time. Then there's the oops, I mentioned a product in the video and now demand will be 3x what our forecast was prior. Then add Covid to the mix. We had one product manufactured specifically for in Florida. We ordered it in June, we had 60 days of supply in stock at that point. It landed at our warehouse 2 weeks ago... in 2021, after placing the order 6 months ago, meaning we sat out of stock for 4 months.
Another product comes from Malaysia. Their entire system shut down, no mail or packages leaving for many months. As this is a natural product there is no where else to get it. Once we depleted our reserves. We then sat out for 6 months. When our supply finally arrived, it was enough for the previous whole year combined, we estimated 6 months of this year with growth. It lasted 42 days before selling out. We are currently waiting for more to make it's way here. We ordered a second order before the first order even arrived. The second ordered hasn't arrived yet. We placed an order for some ridiculous amount now, and they are having a hard time even getting enough of the product to prep to send us. It's a leaf that falls off a free. Just has to be collected and dried, then packed.
As fast as we can move for a product being manufactured. It takes 30 days for China, Vietnam, Taiwan etc to spin up the factory, box our stuff, put it on a boat. 30 days to arrive, then 15 days at port with covid jamming things up currently. This puts us as 2.5 months from the minute we know we need to order. We have a cargo container of goods landing every month in addition to buying from wholesalers. I still have 20 out of 236 items out of stock currently on our online store. Essentially money can't buy these items currently and once we can get our hands on it, we'll grab 6+ months because this just repeats itself.
I find that we lose far too many sales being out of stock than the cost of storage and taxes from inflated inventory. Lastly, every one of my competitors is having chronic out of stocks, we win purely by having things in stock. Plus there's so many other elements, marketing materials in the form of blog articles and videos that can't release until we can get supply. Nothing gets an angry mob faster than hyping up a product we are sold out on. An example of that is, we have a live plant that we can get in once every 4-6 months. They sell for $29.99 each, which is expensive. A few weeks ago, I was able to get 140 of them shipped in. I mentioned it to members only on youtube, and it sold out within 90 minutes. The paying members were even upset they missed out and there are only 2000 of them. Now open that up to a demand of 530k instead of 2000 and you can see the strain.
As we are told and say all the time, "it's a good problem to have" and my response is always, it's still a problem. I should also add that we are very selective in the products we want to carry. We sell lots of volume of few products. This no doubt puts strain on our suppliers but is the correct choice. We don't buy into, just bring on the whole line mentality.
