Commodity Insanity

I am not sure if you all caught on yet to all the hints or not, but inflation is staring us all right in the face and I want you to be prepared.

Last week, I explained about cotton and greige goods and how those commodities are rising. That is just the start though as I expect just about every commodity and input to products to rise. Thus, the commodity insanity that lies ahead.

The writing is on the wall folks: PRICES ARE GOING HIGHER ON EVERYTHING! Don’t say I didn’t warn you.

I am not trying to taunt you all with the negative discussions on pricing because, quite frankly, I don’t want the prices to start going crazy. I don’t want to have to keep adjusting prices with every increase that has been thrown at us. I don’t want to have to keep calling customers to say that prices are changing. I much prefer stability and gradual increases. Unfortunately, it’s not going to play out like that for me.

Major inflation is exactly what happened around 2010 when cotton rose to over $2.10 per pound in a very short time period as you can see in the chart above. As a point of reference, right now we are under $.90 per pound. I remember scrambling to work around the price challenges and it wasn’t easy or fun. From one order to the next, you didn’t know what the textile mill would be charging and how much less you would be making. In a word, frustrating!

The point of all this is not to scare you or rub it in your faces, but rather, I like to be forthcoming and telegraph what I see in my crystal ball. I want you to be prepared to pay more for fabrics and everything else or even try to get ahead of it as best as you can. For consumers, I don’t want you to think that the shops are gouging you. Quite the opposite, they are just trying to keep up with the increases to stay in business. Please don’t get mad at them when the prices go up because it isn’t their fault.

For my shop owner customers, I want them too to be prepared and make sure that they are getting ahead of the price increases in order to maintain the margins they need to stay in business and be profitable. Right now, the key is communication so there are no surprises lying around the corner and everyone can plan ahead. Trust me that this isn’t the first time this year that I have spoken about this.

That is the crux of my message for the day. Below, I plan on sharing some commodity charts with you for you to see for yourself what’s going on. For my companies, here is a list of the input costs that I see rising the most and impacting our business. Most of them are already up and going higher.

• Greige goods and cotton.
• Freight from overseas and domestic freight.
• Gas and oil.
• All paper products and cartons.
• Plastic for wrapping boxes and precuts.
• Tight labor market will result in higher employment costs.