“You Just Have to Be Creative:” Local Small Businesses on Dealing With Supply Chain Issues

As anyone who has gone shopping recently knows firsthand, consumer goods such as toilet paper, meat, and frozen vegetables have been more difficult to find and often more expensive. Consumers around the world are having similar experiences due to disruptions in the global supply chain.

Although inconvenient for consumers, the recent supply chain disruptions have hit small independent business owners especially hard, significantly impacting many business sectors including retail stores, restaurants, breweries, homebuilders, and numerous others who lack the economies of scale enjoyed by large chains and franchises.

According to Assistant Manager Anthony Smith of GigaParts, access to new technology presents a major issue for the company, which builds custom computers and sells components for those who want to build their own systems, as well as radio equipment and other electronics. Smith noted that some products have been “out of or low stock for so long they’re infinitely backordered,” such as graphics cards and chips. 

Although price increases on stand-alone computer components make individual parts less attractive to customers, Smith explained that the sticker shock is reduced when those parts are incorporated into a computer system. He has also noticed that customers are more aware and forgiving these days.

Graphics cards have increased in price because of low supply and high demand, and Smith said that they are in such short supply, vendors that do business online raffle off the opportunity to buy them at full price. GigaParts won one of these raffles, buying cards at full price and then doing a customer giveaway in which they presented one lucky winner with a free graphics card.

According to Smith, “it makes sense…when things go back, we hope people remember where they won one or where they entered to get it.”

GigaParts adapts however they can to the ebb and flow of access to goods. “We get something in to tide us over and try to buy what we can where we can. It’s been hard. One thing we have hugely in our favor: the October before Covid we started growing into our own distribution center. We could buy in larger bulk and greater quantities for larger products. Vendors place higher priority on us.”

As for the radio side of the business, Smith reported that some vendors have had a much worse time than others. Components are manufactured in Japan and China, with products at different levels of completion due to a lack of parts. He added that some brands of accessories are particularly hard hit because they are shipped by boat. Labor in China has also taken a massive blow. 

The radios themselves have had periods of shortage, according to Smith. However, he said, manufacturers have made a concerted effort to equal things out as much as possible.  

Madison Band Supply owners Robin and Frank Cotton also reported that electronics are especially hard to find. In addition, Chinese-made products like earplugs are out of stock, and both instruments and parts for instrument repairs are harder to find. The most common euphonium from Yamaha is backordered for months, and even a simple pipe for the instrument is hard to find. “Students are choosing to replace instead of repair–whole horns are in supply rather than parts.”

Most musical instruments are now made in China and Taiwan, and according to Frank Cotton, even US-made instruments have parts from there, with the metal supplied by China. 

Although scarcity presents problems, Frank Cotton said “we’ve kept our prices the same as two years ago. Supply prices haven’t really escalated yet, although our main supplier is going up by 5% rather than the usual 2-3%.”

Finding products takes much more work now than before: “We have to go through five or six distributors now instead of the normal supply chain…Bandmaster (marching) shoes ran out of a lot of different sizes and we had to make substitutions. We’re okay but we have to be creative and it takes a lot more energy.” Robin added, “We’re having to relearn patience.”

Local home builders and contractors are also experiencing the negative effects of supply chain disruptions. Wendy Lee, owner and founder of LeeHouse Homebuilding, said that although the homebuilding business has experienced labor shortages for the past five years or so, supply chain issues have had the greatest impact on the industry recently.

Lee noted delays in the availability of products ranging from plumbing fixtures and window glass to drywall mud and hardware glue. “There doesn’t seem to be a rhyme or reason but the end result is a delay in finishing the home, which not only affects the profit margin but, more importantly, adds frustration and disappointment for the customer who is already stressed due to higher pricing and a competitive market.”

According to Lee, price increases occur in the housing supply market on a daily basis, with trade partners and vendors passing down material increases including freight costs that in some cases more than tripled. “As a boutique-size homebuilder I have no choice but to raise the sales price of my homes, which unfortunately results in some buyers being priced out of the market.”

Adaptation is key: Lee focuses on frequent communication with customers, keeping them up-to-date on delays or product substitutions. While she continues to build pre-sale homes for customers, she has added in more speculative builds, setting the prices once the homes are near completion so as to compensate for price increases incurred along the way.