Somewhere between China and the U.S. is a cargo ship carrying thousands of Bluetooth speakers shaped like cute little animals.
They are a crucial part of the My Audio Pet inventory that K.J. Robinson agreed to supply to retailers long ago, in time for the holiday shopping season. The ship originally was supposed to arrive by late September. Like so much of the global supply chain, it’s not panning out.
“‘It’s in transit somewhere’ is the messages we keep getting,” Robinson said.
By now, many shoppers in Georgia and around the nation have likely noticed differences on toy aisles and online this Christmas season. Many products are in short supply. And often prices are up.
But for months behind the scenes, local businesses have been scrambling to limit the damage from a discombobulated global network for getting goods to market. The system has gone wrong at virtually every level, stymying manufacturers, marooning finished products at distant ports and leaving some toys far from consumers’ hands as this year’s Christmas clock winds down.
Retailers and toy companies say products are on many shelves amid surging holiday demand. But the cattywampus supply challenges have worsened for some companies as the pandemic grinds on, and recent local spot checks showed some gaps.
“We’ve been concerned about this all year,” said Robinson, a Woodstock musician-turned-entrepreneur whose My Audio Pet has gotten plugs on network TV and twice landed on Oprah’s Favorite Things list in recent years.
About two-thirds of the company’s sales are tied to the holiday season. Problems started showing up early. In pre-pandemic years he could put in a manufacturing order and have finished products in 30 days. But the cycle this year turned into three to four months, Robinson said. Manufacturing plants he contracted with in China struggled with rolling power blackouts and worker shortages. They faced delays getting everything from batteries and magnets to audio drivers with chips.
His shipping costs quadrupled, even as delivery times grew longer than ever, but he said he ate the costs rather than increase prices this year.
Robinson limited orders from retailers because he couldn’t guarantee his products would arrive in time for the season. Some of his displays in stores aren’t up at all or aren’t fully stocked.
“It’s frustrating. There is nothing we can do about it,” he said. Sales will be significantly lower this year compared to 2020 or 2019, and the normally profitable company will likely lose money, he said. He laid off two of his five other full-time workers.
Retailers have struggled to keep their shelves full, whether with toys or other products, both in brick-and-mortar stores and online. The biggest players had extra options to avoid shortages. Walmart chartered its own cargo vessels, rerouting them to less-congested ports. Target used its resources to pump up inventories early. Still, several toy shelves in a Gwinnett County Target had empty spaces on a recent visit by an Atlanta Journal-Constitution reporter.
Out-of-stock issues persist online for the industry, with baby and toddler products as well as toys among the hardest hit, according to software giant Adobe. Overall retail out-of-stock messages were up 258% for most of November compared to the same month in 2019 before the pandemic, it found.
Credit: Daniel Varnado
Credit: Daniel Varnado
Trang Tran, who owns Hello Rainbow, a toy store in downtown Duluth, said she took unprecedented steps to ensure her shelves were filled for the holidays.
She spent a lot of time on the phone checking on orders, questioning suppliers about where their inventory was, how it would be transported and with what kind of turnaround times. She couldn’t get all the wooden train tables she wanted, and she eased back on Christmas books, fearing they might arrive too late. Bigger toys and books seemed to face the longest delays, she said. She canceled some orders and turned to some U.S.-made products in hopes of avoiding issues.
Customers know what to expect, she said. “They are not going to miss Christmas this year. They are not going to not buy. You may not get exactly what you want, but they will find an alternative.”
Tiffany Leggett of Cumming, shopping for her granddaughter, isn’t worried about some products being in short supply. She motioned to Tran’s stocked store. “There’s plenty of stuff they can have.”
At BabyLand General Hospital in Cleveland, Ga., the home of Cabbage Patch Kids, visitors earlier this year noticed the sparse supply of babies that normally fill room after room. While handmade versions are crafted on site and carry an “adoption fee” starting at $250, lower-priced, mass-market creations are made in Asia. The company put in orders in March and April of 2020, expecting delivery by the spring of this year. Instead, shipments didn’t arrive until mid- to late October.
“We were getting quite panicked that we weren’t going to get our babies here on time for the holidays,” spokeswoman Margaret McLean said.
Still, the company didn’t have what it was expecting over the summer, which is usually the busiest period at BabyLand. So managers have put in larger orders for 2022, hoping more will come through in time.
“It has changed the way we are doing business,” McLean said. “Before there was not that question of whether we would get product.”
Credit: Daniel Varnado
Credit: Daniel Varnado
Christa Pitts thought 2020 was rough. Then 2021 hit. “This, by far, was a more challenging year,” said the co-founder and co-chief executive officer of the family-run Lumistella Company, which owns The Elf on the Shelf brand.
She picked up early on the potential problems brewing around the world. So the company put in its Christmas season orders eight weeks earlier than normal. Sales tied to the season account for 90% of the Cobb County-based business.
In typical years, the company’s shipments might sit at a port for three days before heading out to sea. Instead, at one point, 18 containers of boxed sets of The Elf on the Shelf were stranded at a port in China for three or four weeks. Lumistella eventually lined up expensive air shipments to get some earlier.
Most retailers typically start taking the company’s wares in August, with 80% of the product out of Lumistella’s hands by September and the rest by mid-October.
Not this year. The last of the shipments due to retailers finally went out at the beginning of December. Even that was an accomplishment.
“We’ve managed through,” Pitts said, pumping her fist in the air.
But with costs up sharply for shipping, the company raised its own rates, and it upped the suggested retail price on its products by 10%.
Mark Tasman, who owns Peachtree Playthings, is still dealing with what he calls “the quagmire.” The Marietta-based company supplies products such as superhero night lights, arts and crafts and activity kits, writing and stationary products, some using licensed brands from Disney, WB, Marvel, Pixar and others.
The vast majority of his wares promised for the holidays are in retailers’ hands now. But a big chunk arrived a month later than planned. And some still hadn’t made it as of early December.
In the holiday season, “every day lost is pretty good-sized sales,” he said.
For a month, the company ran out of its Spiderman and PAW Patrol night lights because a container of them was stuck at a port in the state of Washington. Meanwhile shipping rates soared at one point to nearly 10 times higher than normal, adding more than a dollar to his cost for each night light.
Sales for the year will be up over last year, though a little below 2019, Tasman said. The company remains profitable overall. But the year has been stressful.
“This is a compounding of issues I haven’t seen in my years. It is back-to-back. You say, ‘OK, what is next?”
For some, it is gearing up even sooner for Christmas 2022, convinced the supply chain problems aren’t ending soon.
Pitts, from Elf on the Shelf, said she recently placed orders for next year, three months earlier than usual.
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