GameWorld Planet wants to continue to be transparent with our customers about the current state of business as it pertains to COVID-19 and continued inventory shortages, delays, and cost increases. At a high level, there are currently 6 key factors that are driving all these issues.
Global Demand – With the pandemic, the demand for many products has greatly outpaced production capacity. If a factory used to have 50 people on a production line, with persistent covid safety protocols that same production line may be reduced by half which will reduce output.
Extended Lead Times – There are an abundance of factors contributing to the longer- than-usual lead times on products. Back orders is the new normal. In many cases, production capacity is related to manufacturer bandwidth and manpower. Outside of production, industries worldwide are forced to work around container shortages, major port delays, and forwarder and carrier delays, all limitations that can be attributed to the pandemic.
We may have been vaccinated, but the rest of the world which supplies raw materials or produces many of our goods has not.
Increased Transportation Costs – The shipping industry is currently running at over-capacity, and, with demand outstripping supply, prices are skyrocketing for all types of freight, affecting a multitude of industries.
Increased Raw Material Costs – Those increased transportation costs also affect all factories, meaning the cost of parts for a new product will be higher. This also affects packaging materials costs due to the huge increase in online shopping.
Tariffs – Joe Biden may have replaced Donald Trump in the Oval Office, but the former President's tariffs remain in place and continue to affect prices.
Labor Costs – Labor costs continue to rise around the world along with increasing safety measures being put in place by factories and local governments. Most of the products you purchase online are made abroad, directly affecting your lead times and your costs.
As you can see, all of these are issues that are out of anyone's control and have been affecting all retailers for the better part of two years with escalating price adjustments. You can expect to see an average increase of 8-20% across all product lines in the coming months. Lead times will also increase.
Suppliers continue to look for new domestic freight solutions as these prices have also increased dramatically due to the high demand for online shopping along with a severe shortage of freight drivers.
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