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Welcome to 2021! The World Changes Bigtime!

It’s time to think about how you run your business!

December 31, 2020

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Welcome to 2021! The World Changes Bigtime!

MIAMI BEACH—As we approach the holiday season, the world has become a more dangerous place not only due to Covid 19.
Anyone doing business with China has noticed a slowdown in deliveries due to the Chinese New Year which started last month.
There is also a general realization that new product is harder to come by because importers have not been able to visit their mills in China in order to develop new product.
Wholesalers in New Zealand and Australia for example, have been pocketing their savings derived from their lack of sampling. They sell the same old merchandise and sampling new goods is lagging behind.
In other developments, Chinese RMB has gained 4% against the U.S. dollar which means profit margins are squeezed by that amount for upholstery fabric importers who buy in RMB.
Shipping costs have risen about 300% for airfreight with major increases in ocean freight—if you can find a container!
Airlines are removing passenger seats in order to make room for cargo and trying to make up for the huge passenger losses in the process.
Yet, the upholstered furniture business is robust in the USA, the principal market for Chinese upholstery. Prices to the consumer are going up.
Some wholesale customers now want the importer to warehouse the goods at the importer’s own expense which further pressures the supplier. There is pushback from the importer to do this as they rethink who they want their customers to be in the future.
Many suppliers are rethinking their attitudes towards warehousing and the resulting closeouts at the end of the year when their customers don’t buy as much as they thought.
For many suppliers, the first half of 2020 was a disaster and it is only now that converters and importers are seeing the boost in their business, finishing the year at almost even to 2019…if they are lucky.
Many expect the first half of 2021 to still be a rough situation with lockdowns in the UK and Europe due to new strains of Covid 19.
What will the Spring hold for the fabrics business?
Trade shows are supposed to start up again in April but even this is questionable.
As a result of these developments and market uncertainty, many are planning conservatively for the first half of 2021 with the hope for a more robust second half with the vaccine more widely distributed.
Still, there are always opportunities so hang tough! There will no doubt be a big wave coming our way and those who are smart will ride it to prosperity!

—ERIC SCHNEIDER, Editor
 


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