If you’re feeling like navigating your small ecommerce business is more difficult these days, you’re not alone. Supply chain issues have caused a cascading avalanche of challenges (as many of us have already survived during the pandemic), alongside many small businesses facing difficulties filling open staff positions in April 2025.
“Very few small businesses export their goods and services, but millions acquire imported goods as inputs to their operations, and those supply chains are currently at risk,” the report said. “Tariff policy is suddenly and dramatically changing relative prices (costs), and relative prices drive all decisions. Uncertainty remains elevated and thus caution clouds spending, hiring and investing decisions.” …While bigger companies can diversify suppliers or negotiate bulk contracts, most SMBs can’t.
Of the 56% of owners hiring or trying to hire in April, 85% reported few or no qualified applicants for the positions they were trying to fill… Labor costs reported as the single most important problem for business owners fell three points in April to 8%.
There is a whole generation of business people who have never had to worry about supply issues for their businesses, and many lack the skills set to deal with any interruption if supply.
In the days before the internet, there was greater understanding of what could happen, how one avoided it, and what one could do to remedy a problem.
Contract manufacturers in the US, of varying types, are seeing boom times with all of their production capacity in use.
Back in the old days, it was considered necessary to have a second source for everything. It was so essential that every major computer chip manufacturer licensed a competitor to manufacture their chips.
Yes, even Intel licensed AMD as a second source for its processors and their support chip sets. About the time that the Internet took off, these practices ceased.
It was also a bit of a fracas with the Novo Holdings and Catalent deal, because Catalent did work for Eli Lilly. Both are big names in GLP-1 drugs, obviously.
IDK if this supplier is an SMB or a “big guy,” but case in point:
Now I also don’t know if this applies to these suppliers, but so many companies have adopted the “just in time” inventory strategy that started rising in the 2010s. It’s just a crafty way to say they have just enough (or almost enough) immediate supply for immediate demand–not long term demand, not projected demand, etc. Only right here, right now.
While that strategy is possible (and hopefully profitable) when supply chains are intact, unfortunately it also means that an on-hand supply gap like this takes so much longer to recover from.
(Again, that might not be the case with these suppliers specifically.)
Grocery stores and food chain has operated that way for decades … truck to shelf.
Covid exposed how fragile this system can be when you operate that way and how long it can take to recoup.
But an industry like the food industry needs to operate that way to insure the freshness and quality of the food.
In other industries, you are hot when you are hot and then you are not. Current fads demand product now but not later … so these industries have to gage the fad and then when to pivot to the next fad. Just enough inventory to make a quick buck and run.
Consumables will always tend to be “just in time”.
When it comes to manufacturing and you know how many you intend to make and with what, then building a stock pile can be profitable because of a volume purchase and/or simply avoiding an interruption in production. Guess it right and you are a hero. Guess it wrong and you have a pile of surplus to get rid of.
Just in Time was a dramatic innovation which was copied from the Japanese manufacturing companies.
It was rapidly adopted around the world as a means of efficiency in inventory. Promoted heavily by Wall Street.
It truly worked in Japan, where manufacturers and suppliers were located together in common campuses, in a small island country, with interlocking ownership of companies along the supply chain.
It was extremely challenging to adopt in large countries like the US with manufacturers and suppliers scattered across the states. And there were many executives who thought it was sub-optimal.
With supply chains spread continents apart, it might be suicidal, whether practitioners wish to admit it or not.
Supply chains for consumables may or may not be “just in time” depending on the time periods involved. Some fresh fruits and vegetables are hybridized to maximize their ripening time to allow sufficient transit time. The tomatoes I eat here in New England are grown in Mexico for a Canadian company. They taste pretty good for a product which is likely to have a farm to table interval of more than 4 weeks.
A good many “fresh products” only have one crop a year. Like apples. They are available year round, and are stored for most of the year. Obviously, like the Mexican tomatoes, some products cannot be stored that long.
I’ll take you back a couple decades on that. I had started in the investment business as a broker (sales) in 1976. I believe it was the late '70’s that GM had gone full in on ‘just in time’ and they were just in time to suffer the consequences.
As I recall some unions didn’t want to strike against GM proper, but they DID strike at some key suppliers. That resulted in almost immediate outages of key parts needed for current assembly.
GM had to shut down a number of plants until the strikes could be settled. Needless to say there was a small amount of pressure put on those suppliers to settle quickly.
GM at that point figured that forcing the suppliers to settle wasn’t going to cost GM anything in the near term because they had contract pricing for x number of parts or model years.
Maybe this is where Amazon got the idea that sellers shouldn’t be allowed to sell above a certain threshold since it only costs Amazon FEES instead of real money…
Yes indeed, and I apologize for overlooking groceries. Somehow, I put it into its own space, alongside restaurants. But grocery stores certainly don’t just sell fresh food.
