Price Increases in the Decorated Apparel Industry: A Q&A with Erin Cannata of S&S Activewear
It seems that price increases, supply chain woes, and inventory issues top nearly every conversation these days. It’s a hard topic to avoid as it affects almost every aspect of our daily lives. It goes without saying that the apparel decorating industry has seen its fair share of these challenges. When it comes to price increases in particular, it’s hard not to cringe when the cost of everything from inks to blanks goes up.
However, if you as a decorator can find a way to be transparent, to communicate with suppliers and customers, to foster relationships, the sting will be a little less painful. To shed some light on the matter, we spoke with Erin Cannata, the sales and marketing communications director at S&S activewear. Check out the following Q&A session for further insight.
Question: What are the essential points to keep in mind when discussing price increases, both between suppliers and decorators and decorators and end customers?
Cannata: Global supply chain issues and price increases seem to be a daily topic of conversation between suppliers, decorators, and end-users. We all want to please our customers and offer them the best experience. It is undoubtedly challenging when we cannot provide them with what they’re looking for and at a price they want to pay or are accustomed to paying. We can quickly lose sight that these issues are not unique to our industry. From micro-chips to groceries to the windows needed for a new home — countless industries are affected. It’s a shared, collective experience.
Be transparent. Remind customers that every supplier is doing everything in their power to address these issues, and also explain the myriad of factors affecting price: inflation is at its highest rate in almost 40 years, an increased demand for goods, supply chain disruptions caused by labor shortages (oftentimes the result of COVID-related shutdowns/decreased staff), transportation issues resulting from labor constraints as well as weather-related delays, etc.
Many economists will argue that inflation is a sign of a healthy economy. While it’s challenging to deal with these issues on one hand, we are fortunate to have the demand for goods in our industry that we are experiencing. In the end, being transparent and planning ahead are suitable communication methods to employ. Presenting clients with various options at different price points can help shoulder the sticker shock when it comes time to order. We have found pre-COVID and now more so than ever, many end-users want to put their brand name on a product they perceive to be of the same value as their brand. They are more willing to pay for good quality products, which often means retail-brand names. Not only does the quality and style of the product affect their buying decisions, we are finding that the end-user also wants to purchase a product from brands that align with their corporate values as well.
Question: How can apparel decorators adjust to price increases?
Cannata: Transparency is key. While we all know prices are going up in many industries, the initial sticker shock can sometimes be eye-opening to customers who may assume they’re paying the same price as in years past. Sharing with customers the factors affecting price increases and even sharing the communication decorators receive from their suppliers could help so customers don’t feel like they’re being gouged.
As far as decorators adjusting to price increases … We all get busy, especially during these times. Being aware of your increased cost of goods and adjusting prices accordingly early on will help alleviate a not-so-pleasant bookkeeping moment when one realizes their margins have decreased if they had not changed their sell price.
Question: Do you anticipate prices going back down as the economy begins to even out, whenever that may be?
Cannata: Some economists will argue that the current 7% inflation rate is temporary and will start to level off once supply chain disruptions begin to even out. Even if the rate of change decreases, it doesn’t necessarily mean the level of prices will. If/when prices start to stabilize, it will take time for those changes to be reflected throughout the supply chain. Since manufacturers and suppliers have been buying long to increase their overall supply and have been buying at higher prices, many of us will likely be sitting on higher cost of goods inventory. If/when we start to buy at lower prices, it will take time for the inventory cost average to even out, so decorators will not be buying at lower prices immediately.