Very interesting discussion yesterday about the current situation for office furniture importers. 2010 has been a very challenging year for this section of the industry, and for the first time we are seeing wide spread inventory shortages.
These inventory issues first appeared in Q1, and almost to a vendor, the story was; "we planned for a slow first quarter, but an increase in orders caught us by surprise".
Well, we are now well into Q2, and we are still experiencing shortages. This time however the story is a bit different. My staff took a meeting yesterday with representatives from a large importer, and the reasons given for their on-going inventory issues were problems finding ships to transport their containers of office furniture. Shipping companies are just like airlines (except they ship containers not people). When airplanes started running at 60% capacity, it made more sense to run fewer planes that were 100% full. This is apparently what the shipping companies are doing - parking ships in port to increase efficiency (and keep prices high).
This has all the makings of a slow death spiral and here is why: if the importer doesn't have inventory, I'll find product from an alternate source (generally a domestic manufacturer where inventory is not an issue). This then reduces the sales for the importer, which means they have to adjust their inventory (down), which means they may not have inventory the next time, and so-on and so-on.
The reason for our meeting yesterday was to discuss placing showroom and back-stock orders for the importer's products. Needless to say we did not place the order(s) when we became aware of the inventory issues - (kind of proves the point...)
- John Schwartz
- is the President of Sam Clar Office Furniture. Sam Clar Office Furniture has been providing office furniture and related services to Northern California businesses since 1939.