Changes in China

"Buy American" is a wonderful goal, but chances are good that a very high percentage of the items in your shop are made in China. Any changes in the availability and pricing of Chinese-made merchandise could have a big impact on what you are able to offer to your customers, and thus to the viability of your shop.

Recently wages in China have been on the increase, in part due to a new employment contract law that came into effect in 2008. There is also a shortage of workers because of the enforced low family size. Increases in the price of oil are impacting prices in China as well as the cost of shipping goods to the U.S. And the proliferation of Chinese factories has led to pollution problems that are expensive to correct.

In an interview last year in Giftbeat, George Kacic of Ganz was quoted as saying "We can no longer rely on factories staying open, ship dates being met, prices being honored for more than a few days, or even factory workers showing up."

What this means for our vendors is a less reliable and more expensive source of merchandise. As retailers we are already feeling the pressure to write orders earlier and earlier in order to be assured of delivery for the holiday season, and reorders are often not possible. And we have noticed that our vendors are starting to source products in India, Cambodia, Thailand and Vietnam.

These changes in China may have a positive affect on American manufacturers trying to compete with imported goods, although we have lost much of the infrastructure of factories and workers necessary for manufacturing. We are finding our customers enthusiastic about American-made alternatives when we can find them, especially if they are competitive in price. A movement towards living without products made in China that was recently encouraged by a book entitled A Year without "Made in China": One Family's True Life Adventure in the Global Economy. You might enjoy this short video about this valiant attempt.

Diversity is essential to surviving any major shift in the supply chain. As you look for new products, pay attention to the country of origin. Consider some fair trade sources that bring in merchandise from developing countries. Shop your local crafts fair to see if their are regional artists whose products could be purchased wholesale for your store.

Be aware of the challenges that your suppliers may be facing in the manufacturing of their products in today's China. Placing advance orders for key merchandise, especially for the holidays, will help assure that you have what you need for successful sales.