Dealers encourage in-stock patio furniture sales due to continued supply chain hang-ups
Manufacturers and distributors of patio furniture have not, ironically, been doing much relaxing while preparing their showcases this season. Tony Rodriguez, president and CEO of Summerset Casual in Ontario, California, says when demand for outdoor products skyrocketed in the onset of COVID, most of the company’s dealers had plenty of inventory and no lead-time issues.
“Now, we get into year two,” he says, “[and] we tend to have supply-chain issues.”
Open since 1979, Rich’s for the Home, with six stores in the Puget Sound area of Washington State, is experiencing unprecedented lead times for patio furniture, says CEO Jon Chapman. Lead times have gone from six to eight weeks to, in some cases, more than a year depending on the vendor, he says.
Nimisha Patel, vice president of Galaxy Home Recreation in Broken Arrow, Oklahoma, says when one issue with patio furniture supply resolves, 10 others seem to come up.
“For example, most patio companies struggled with fabric shortages,” she says. “However, once they procured new material, China started imposing power restrictions limiting factory hours. Then factories couldn’t get product out before Chinese New Year because it’s extremely difficult to book a container.”
It’s not just China: Patel says the patio furniture industry has also been impacted by factories in Vietnam having been shut down from July to September 2020, delaying production and shipments. “[Vietnam factories] have remained open since, but orders are running behind schedule still,” Patel says. “China’s government-mandated power outages are still in effect. It has limited hours that factories can operate machinery, not allowing for a full schedule of operations. A vendor told me today that my order has been pushed again because the power outages are still in place.”
Rodriguez mirrors this reality, recognizing a new mixture of freight issues, raw material issues, offloading issues, warehouse issues and more creating delays in getting patio furniture to homeowners.
For companies that import many of their materials, like Summerset Casual, container shortages have led to an exponential increase in shipping costs that are hitting their bottom line. Over a matter of months, Rodriguez says, freight went from $2,500 a container to $10,000 a container, “and it was in the blink of an eye.”
To avoid international freight uncertainties, companies like Rich’s for the Home have added more domestic suppliers.
“There’s been a slight emphasis to protect ourselves by going more domestic,” Chapman says. “It’s a little more reliable.”
But even domestic vendors have supply-chain challenges.
“We like to run leaner with our inventory levels, but based on the uncertainty of when we can get product, we have to bring more inventory in,” Chapman says.
Galaxy Home Recreation has also increased inventory levels. Patel says that even though she has ordered five times more patio furniture than in previous years and added five vendors, she has yet to have an inventory surplus.
Rich’s For the Home added another warehouse this year. However, warehousing inventory comes with concerns like the possibility of fabrics looking outdated by the time they arrive. The hope is that Rich’s will have a product available that competitors’ customers are waiting on.
In addition to increasing inventory and avoiding carrying costs, Rich’s for the Home is emphasizing in-stock orders. Special orders were about 40% to 45% of the company’s business pre-COVID; Chapman says it’s 10% to 20% of orders now because of the longer-than-normal wait times.
Likewise, Patel says Galaxy Home Recreation is only selling in-stock inventory. “With so much uncertainty and unexpected price increase and surcharges, it was becoming hard to fulfill orders that aren’t stock,” she says.
Rodriguez and Chapman are both upfront with customers about uncertain fulfillment dates, especially with no end in sight.
“I don’t see a light [at the end of the tunnel], but I know vendors are working hard and thinking creatively for contingency plans,” Patel says.
Patel and Chapman have both noticed more vendors ordering products from Vietnam and Mexico to diversify labor/production and, in the case of Mexico, reduce on freight. “I don’t know if we’ll ever get back totally normal,” Chapman says.