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Braap Chat
What A Wild Ride
June 22, 2022
This time last year, when the supply chain crisis first hit, we completely ran out of inventory in the middle of the riding season. Sales dropped to nearly zero for two months, leaving us scrambling for product.
The reason we ran out is that, in a very short amount of time, our production and shipping lead times extended from 4 months to 12+ months. Suddenly it was taking way longer to make samples, get materials, complete production, and ship.
Freight costs went up too, not just because of shipping rates, but also because we were using air freight to fill demand while our inventory was stuck on boats. To partially offset that, we implemented a 15-20% price increase and started placing production orders 10-12 months out.
Now we’re still experiencing supply chain issues, especially on the apparel side of the business, but luggage lead times are finally shrinking. That means we’re going to have more inventory arriving much sooner than we need it. Just two weeks ago, a large production order showed up three months ahead of schedule.
Freight costs are coming down too, because now we’re using more water freight than air freight. However the cost of basically everything else is going up, so we can’t just drop back to last year’s prices, at least not permanently.
Instead, we’re running a mid-season sale, with free shipping across the board, 10% off most items, and some items (like the Reckless 40 and Scout 25 Panniers) reduced 20%. This is exactly the same as our Black Friday sale, in June/July instead of November.
The sale reverses last year’s price increases (it reverses an 18%+ price increase), and we hope it will help move through inventory faster as lead times shrink. We’ve never run a mid-season promotion like this.
Planning inventory in this environment is like trying to predict the weather 10 months out. We have no idea what’s coming, we’re just stoked it’s warm out, the snow is melting, and it’s time to ride.
See ya out there!
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David
June 28, 2022
Yeah, supply chain issues, rising prices, inflation, overregulated government mandates etc. and everything else in between, I’d say you guy have done a fantastic job. Thank you!
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Mosko Moto replied:
Thanks, David! Wild times, no doubt.