Inventory Shortage Causing Stress on Manufacturers, Retailers, and Our Customers

As you might have seen from calling or going by our store Monday and Tuesday, we were out to meet with our BrandSource buying group (virtually, of course!) to learn more about what is happening across the country with appliances and mattresses.

The conversations revolved largely around inventory.

Starting in April, states shutting down their economies led to bulk buying of food and small chest freezers were bought up before we could put them on the floor. We even had a customer come down from the Twin Cities to buy one because they were already out up there.

Larger freezers weren’t far behind as packing houses closed and the cost of beef and pork shot up. Butchers are out through parts of next year with orders, and it all needs to be stored somewhere. Couple that with freezers being out of season for manufacturers just exacerbated the problem.

We have over $20,000 worth of freezers on order. And about every six weeks we receive two or three in and immediately head to some grateful clients.

Beyond freezers, we were okay with getting appliances at the beginning of the spring. But as the summer rolled along, assembly lines needed to start social distancing cutting efficency and demand for appliances went up as people were cooking at home more and wanted an upgrade.

No manufacturer has been immune from this. The limited ability to produce while demand is at an all-time high has hit everyone.

Some manufacturers have even gone as far as not accepting new orders until they catch up with backorders.

Others are making it clear that they are 6 to 10 weeks out on current orders. But that’s just a best guess, because even their computer system can’t manage the number of backorders in the system to produce an accurate ETA.

No retailer is immune from this, either. We just met with hundreds of retailers, big and small, all experiencing the same thing.

We had a concerned client call the other day asking why we can’t get him his refrigerator when Lowes and Home Depot are advertising great sales. Clearly, they must have the product in if they’re advertising it, right?

No.

Out of curiosity, we shopped Home Depot in Sioux Falls’ website for their model fridge only to see that it was out to November. Later that morning, we checked the site again before reaching out to the customer and it had November now became December 10.

The long and short of it is that if the product isn’t in-stock at the moment and the store told you it’d only be 2 to 3 weeks to get the rest in, they’re taking you for a ride.

We have tried our best to be on top of the situation and not over-promise customers. But the absolute truth is we just don’t know with any certainty when a product will be in. There is no advantage to buying from the big box stores to get the product sooner.

So if you’re going to be waiting in line anyway, why not wait in a line where you’re a name and not a purchase order number?

What does this mean for people in the appliance market?

I know this sounds like a sales pitch, but if you think you’ll be in the market for new appliances in the next six months, consider buying now.

First, supply and demand can only stretch so far. GE and Speed Queen have already issued price increases effective this year. The others won’t be far behind. Right now, LG has some pretty nice sales going on yet, but there is no indication that Black Friday will even be a better time to buy.

Second, reserve your place now. Just like in the online shopping example above, waiting even a few hours changed the outcome of delivery on that refrigerator. Orders get fulfilled on a first come, first served basis at these manufacturers.

Finally, remember that this is impacting the entire market. We pay dues out of our bottom line every month to a buying group that gives independent dealers the same influence with manufacturers as Lowes and Home Depot. And after the last quarter where the demand in sales is largley coming from independent dealers like us, that influence is only going to get stronger. We wouldn’t mind taking those membership dues home with us each month instead, but we know strategically how much better our clients are served by us being a part of it.

We want your business because we truly enjoy serving Rock County with appliances, mattresses, flooring and cleaning. It’s fun for us to find the products that work for you, especially when we can find great deals on it, too!

There has been a lot of frustration all around, and we wanted to share this to offer a little background, but also as advise. To that end, if it makes a difference in your shopping experience, Schomacker’s will accept payment on delivery instead of up front. We want you to know we’re with you.

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