If you had to pick a word to best sum up the past two years, “disruption” would be at the top of the list, or at least very close. The COVID-19 outbreak has impacted every facet of our lives and businesses – including a chain reaction of global events that has caused extended factory shutdowns, employee shortages, shipping delays, soaring inflation and price increases.

Inflation is soaring, and suppliers are justifiably raising their prices. Distributors, if you're going to charge more in the new year, use our quick guide to avoid turning away your clients.https://t.co/Txln7EzLFX

— C.J. Mittica (@CJ_ASIMedia) December 22, 2021

As a result, the greatest prized possession in the promo industry has become inventory – product that’s available and deliverable. “Inventory has been the single biggest challenge we’re facing,” says Hunter Janda, senior manager with Boundless Network (asi/143717). “I check stock before I place the order, but no matter how quickly I turn it around, the items could be gone.”

“We joke that during the past two years, every order is really three jobs,” adds David Weintraub, CEO of Pinnacle Promotions (asi/295988). “We find a product, order it and discover it’s out of stock, so we have to go back in and find a replacement and sell it all over again.”

Apparel has been hit particularly hard – and not just due to the pandemic. “Inventory struggles based on a perfect storm of COVID-related labor and raw material shortages, plus two hurricanes in Honduras last year really impacted production for key brands,” explains Terry McGuire, senior vice president at HALO Branded Solutions (asi/356000). “Central America is where the majority of our tees – our top-selling single product – are produced.”

The lack of inventory – coupled with rising prices and the gradual return of in-person selling – has changed how promo companies approach the category. They’re certainly not sitting still. Instead, they’re drastically revamping internal processes, adding technology, increasing communication and adopting new selling strategies to keep up with a constantly shifting business landscape. “You never know who’s naked until the tide goes out,” Weintraub says. “When times are tough, the more creative companies will be poised to be successful.”

Here’s what promo companies are doing to stay in the game.

Cast a Wider Net

Distributors have to be creative with sourcing apparel – both in terms of where they order from, as well as what styles they sell.

“From the stocking supplier’s perspective, inventory rules all. If you don’t have product both on the shelf and in the replenishment pipeline, you have major issues,” says Michael Snyder, vice president of sales at Edwards X. The company, which specializes in custom apparel and uniforms, was recently rebranded from Bishop Custom Apparel after it was purchased two years ago by Top 40 supplier Edwards Garment (asi/51752).

Snyder says Edwards’ two divisions collectively source from 18 countries on five continents – what he terms a “global sourcing chessboard” – to mitigate disruptions such as COVID spikes, rolling power blackouts and port congestion. “Clients understand the current supply disruption to a degree,” he says, “but they won’t tolerate you being flat-footed with lengthy replenishment dates.”

Indeed, distributors learned quickly that they had to turn elsewhere if their favorite suppliers weren’t delivering the goods. “The biggest suppliers got hit the hardest first,” Janda says, “so people turned to the next tier of suppliers that still had inventory.”

Pinnacle has recently expanded to working more closely with smaller suppliers. “They’ve been able to shine, because they’ve had inventory where the larger players that everyone usually relies on have run out,” says Weintraub. “It was important to expand our network.”

“We’re preaching patience. The first conversation we have now is, ‘I can’t guarantee I can get you the product you want.’” Kelby Shymlock, Threds

The demand for the type of apparel is changing too. During the pandemic, Weintraub notes, no one was asking for “the cool products.”

“Those who had a deep inventory of basics were in demand,” he says.

Edwards X has been receiving numerous requests for industry-stocking basics, such as sweatshirts and T-shirts. “This isn’t typical for companies on the custom side,” Snyder says. “We typically provide unique, limited-edition styles and targeted uniform pieces.” It’s been a growing category for the company, though, and the supplier offers additional niceties such as custom labels and coordinating embellishment at the factory level.

Be Transparent

The biggest shift in Pinnacle’s business has been increased transparency. Initially, the company tried to stick to “business as usual,” but then had to keep going back to explain why they couldn’t get the product after all, which upset clients; they were accustomed to getting whatever item they wanted, as quickly as they wanted, which Weintraub says is no longer feasible: “We’re making a conscious effort on the front end to address any and all issues, including production, that might impact an order, which in turn is making the entire process run more smoothly. We’re over-communicating every step of the way.”

When items weren’t available, “in the beginning, people would get upset and say they were going elsewhere – they didn’t realize we all buy from the same suppliers,” Weintraub adds. “Traditionally, account managers didn’t explain that because they were worried they might lose the order. Educating them on the front end helps to set expectations,” he says.

“We’re preaching patience,” says Kelby Shymlock, vice president of Threds (asi/344356). “The first conversation we have now is, ‘I can’t guarantee I can get you the product you want.’ We let them know what the challenges are.” Working with longer lead times, Shymlock and his Threds team makes sure the item is in stock, then recommends that clients move quickly. “If the customer wants something,” he says, “we firmly tell them they have to order now.”

Communication is also crucial with each component of the order. For example, Eggers Imprints, a contract decorator based in Milwaukee, has altered how it handles shipments. “In the past, when boxes arrived, we just scanned them and put them in the system. There wasn’t an issue getting a large order of items all in one shipment,” says owner Dan Eggers.

Now, as incomplete orders come in from a variety of locations, fulfilling an order is far more labor intensive. “We can only decorate what we have and can identify,” Eggers says. Although he’s added to staff in the receiving department, he’s now tasking customers with providing tracking information and warehouse locations in order to expedite turnaround time. “We explain that we want to be a partnership and we need to work together. We also let them know that a 7- to 10-day turnaround is no longer guaranteed. We ask for three weeks with no firm date.”

Inventory is a moving target, but technology can help. Earlier this year, Boundless Network had a webinar with SanMar (asi/84863) explaining how reps could check to see when inventory would be back in stock, and Janda says he’s increasingly using this technology. “It’s user-friendly,” he says, “and I don’t have to email my reps as often.”

Embrace Flexibility

In times like these, clients can’t afford to be rigid. “We encourage our clients to purchase early and be flexible, and to have a first, second and third choice for apparel styles in the event their order can’t be completely filled due to inventory shortages on a particular style, size or color,” says HALO’s McGuire.

Adds Weintraub: “If someone wants jackets, we show them three options and urge them to commit to all three. We tell them, ‘It’s going to be one of these.’”

Don’t expect to find everything in one place. “Pre-COVID, we’d get an order for a thousand shirts, issue the order and get all the product from one vendor and one warehouse,” Shymlock notes. “Now, that same order could be coming from four vendors in 10 warehouse locations.”

“If someone wants jackets, we show them three options and urge them to commit to all three. We tell them, ‘It’s going to be one of these.’” David Weintraub, Pinnacle Promotions

Janda recommends his clients mix and match styles in the same color so they can fulfill a large order in a variety of sizes. “I quote whatever I can find, present to my client and tell them, ‘it’s in inventory today, but may not be tomorrow,’” he says. Clients are adapting and ordering more quickly.

HALO’s client base has responded well to its advice of ordering early and remaining flexible, says McGuire. “We’re seeing far fewer of those last-minute rush orders, as clients realize they need to plan and prepare better.”

Threds, says Shymlock, has been focused on buying product as soon as the customer lets them know what they want, even if the order is a month out, to ensure they can get it.

Eggers has noticed more customers are willing to simplify their logos in order to get the job completed more quickly. “Instead of 10- to 12-color,” he says, “they’ll knock it down to four,” adding that sometimes the client will opt for heat transfer, embroidery or digital design in order to expedite the order since less setup is involved.

Find an Opening

When COVID hit, Edwards X saw its event-based business drop noticeably. However, Snyder says demand remained strong for uniforms and workwear from both divisions. “Uniforms tend to be an annuity business, and more distributors are realizing they need to diversify into this space,” he explains.

The company began educating its distributors on the merits of selling uniforms. “We instructed them that uniforms are a safe and stable business, and that, especially in a COVID world, people want to see buttoned-up personnel when they enter a business,” says Snyder. “There’s never been a time more conducive to clean, cohesive and confident uniform presence.”

The example reinforces the idea that distributors shouldn’t settle for doing things as normal, but should instead find markets with needs that match what’s available and can be sold right now. It’s why when Janda was having trouble getting polos for clients in the heat of summer, he started pitching cold-weather stock, such as hoodies and fleece jackets. “We started buying winter apparel before it got cold,” he says.

Apparel is the top category in the promo industry for a reason, and buyers will still be incredibly receptive to it. Now it’s just a matter of who’s looking to buy. At Pinnacle, account managers targeted the human resource departments of its client base to encourage them to connect with their remote workforce. “Apparel was a great way for companies to stay tied to their employees,” says Weintraub. “Providing sweats, blankets and T-shirts let companies show they were in touch with what people needed at home.” The company pivoted into fulfillment and kitting as well as rewards programs, which all paid off handsomely, especially during the holiday seasons.

Late last year, HALO saw a substantial jump in demand for premium and retail brands, largely because so many employees were working from home, says McGuire. “Rather than distributing merchandise at events, companies showed appreciation to their employees by sending higher-end apparel. “We’ve seen over a 100% increase in kitting and individual drop-shipments as a result of this trend.”

There are certainly challenges to contend with right now, but pragmatic planning and staying calm will help see companies through. “I’ve been through three major downturns in my career: the dot.com crash in 2001, the recession of 2008-09, and now the COVID outbreak of 2020,” says Weintraub. “I let my team know that this too will pass, and we’ll come out of it stronger, so let’s make sure we’re prepared for what happens afterward.”