Premarket was everything you could hope for combined with lots of drama about what the future holds. Sales for most factories and retailers are blowing away expectations.  With little consumer discretionary purchases going to travel and entertainment, the home furnishings category is finally captivating to consumers. They are building, remodeling and refurnishing like we have never seen, causing incredible demand. One would be hard pressed to find a factory showing at Premarket that wasn’t excited about how well sales have been this summer. It doesn’t matter if it was higher end or promotional goods, if a factory could ship, their business was better than robust.

More good news at Premarket was the availability of new offerings. When factories had 11 months since the last North Carolina market, they had lots of time to spend on making sure their new offerings were good. If a factory showing in High Point and Las Vegas tries to bring something new every market, the amount of new products sometimes is limited. But that same factory with almost a year to plan what they want to show can remerchandise their entire line to give retailers lots of new, fresh looks.

For as good as sales and merchandise selection was, the challenges of the supply chain was also quite evident. The biggest headache for all is production. Many domestic factories are struggling to find people that want to work with Covid-19 concerns. One very good domestic manufacturer can open several more lines of production if they had the personnel, but they just can’t find the bodies. This of course caps what they can accept in new orders and runs their lead times out much longer than what was previously acceptable.

It’s not just production but components are also a problems. Kits from overseas are delayed because of container issues. Foam prices have increased 8-10% and lumber that goes into frames is up substantially more. This all has caused a price increase roll out from upholstery factories that started being communicated at Premarket. In the past, retailers try to negotiate away some price increases, but when getting production time is a premium, the factories will pass on the real costs of production, and those who don’t want to pay it will probably not get shipments.

And if that’s not bad enough, when the goods finally get made and ready for a retailer to pick up the product, there is a lack of transportation, either containers or trucking. Rumors abound about very large buyers across the country paying higher freight rates and locking up trucks because they want to get the goods more than they want to fight over a higher freight bill when they need goods.

One way some factories are coping with the supply program is either by not accepting new customers, putting retailers on allotment or cutting off small customers who don’t buy enough product. This has all kinds of consequences as business returns to normal. Those factories that no longer want to sell smaller dealers will begin to trim their sales forces. Those retailers that are no longer getting deliveries from their main suppliers will not have product to sell and may not be able to stay open until factories can ship regularly again.

The transition our industry will undergo from a retail storefront point of view and a sales rep point of view could be one of the biggest consequences even though on the surface the furniture industry sales are through the roof. When business finally slows down and factories are again looking for customers, how likely will the retailers want to go back to the factories that left them high and dry?

A recent study by the International Home Furnishings Rep Assn. is a timely reminder of why reps are important in the home furnishings industry. A survey of more than 100 retailers indicated that for 50% of them their business was up over last year. Over 60% said their biggest problem was inventory shortages as discussed above.

There are several questions in the survey about how reps can be helpful to retailers during this time of transition with virtual selling, help on real time inventory information, and help with enhanced product images and digital assets for websites being chief among needs retailers have for reps. Reps are an important link for the movement of products in a busted supply chain.

Those reps who can keep communication and product flowing between the factories and retailers may be one of the most valuable tools in the industry right now.

Factories are so busy with production they may not realize that there is product waiting for retailers to get in and pick up. Retailers may think factories are shipping only to find out later that their carrier is not picking up goods as planned. Or a factory may be filled to capacity, but if orders are placed a certain way, there can be efficiencies that may allow the product to get scheduled earlier. Brick-and-mortar retailers are hastily adding product online, but if the descriptions are hurriedly attached to images, the retailer may not get any results for their efforts.

A good rep can review to make sure the product is presented in the best possible light. There are numerous ways reps benefit the industry beyond showing up with an order pad. Many retailers are relying on their reps to help keep the supply chain working in flowing goods. Planning and communication are important, but so is adaptability to solve problems.

It’s a crazy world right now in the furniture supply chain, but a good rep can be a terrific partner to help.

To sum it up: Sales are great, but product is hard to come by due to production and supply chain challenges. Fresh merchandise is being presented, but shipping is questionable with lack of current production capabilities for older product. There will be winners who get product, satisfy their customers, and have great logistics. There also will be a shakeout of factories, stores and reps who could not navigate the changes this pandemic brought about. Good reps will step up to help their customers and their factories flow goods.

Wishing you good selling and better deliveries!

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