Coronavirus and its effect on a small local business in Minnesota
We’ve all been watching the news and see how the virus is impacting business in China and elsewhere around the world. So how does it affect a local business in Minnesota? The short answer is, more than we previously thought possible. It’s quite obvious we are in a worldwide economy and no country is immune to major problems elsewhere around the world. We’re very fortunate in that all of our InstaTrim Flexible Trim Products are made in Minnesota. However, there are many more layers to manufacturing besides just the plant where our products are made.
All the ingredients in our InstaTrim Products can potentially be affected by any slowdown of manufacturing supplies. Adhesive, PVC, release liner and packaging needs to be in the supply chain for production to continue. If any one of the above ingredients experiences a slowdown due to the virus it has an immediate and potentially crippling effect on production. We are fortunate in that all of our ingredients are also locally made in the Midwest. However, as the cases of the virus expands even these plants may experience a slowdown or even a shutdown to keep the virus spreading. For the short term we have plenty of inventory but if this continues for many months even these supplies will grow short.
Only time will tell….
Another factor that we are watching is consumer behavior during the virus worries. We have noticed that the consumer is still buying, since we can monitor sales through ecommerce retailers. It makes sense as we all feel safer in our own homes and having Amazon, HomeDepot.com and Walmart.com available is a safe and easy method to continue to shop. In addition, consumers may be spending more time at home and are seeing projects they can complete in their houses during this “hiding” period. DIY projects like caulking, trim, tiling and weatherstripping are generally something the consumer can do themselves. These projects also may keep the consumer busy during these tense periods. It will be very interesting continue monitoring our ecommerce channels to see how consumer buying habits evolve over the next few weeks.
Certainly, there are numerous manufacturers that are unable to supply products that are made in China. This may be severe and could put a small business “out of business” if the virus fears continue. The impact on ecommerce is already being felt as over 40% of all the items for sale on Amazon are made in China. That’s hundreds of millions of dollars of potentially lost revenue.
The next few months will be unprecedented in the future of all business’s in the USA. Only time will tell how much of an impact the virus will have on our economy. Some will loose and some will gain, only time will tell.