From Boom to Bust to Shortages

Most of us have experienced the dramatic economic changes of the past few years. The “boom” economy, which was really only great for a select few, turned into a bust for everyone, again, except for a select few. Now that we in the US are struggling through a feeble recovery, the previous arrangements and relationships are being turned upside down.

The US recovery is being led by our export industries and the huge volume of imports of consumer goods from China is a fraction of recent peak levels. That sound good, doesn’t it? Here we are making export sales and importing less which will improve our trade balance and create jobs. But wait! Now we are being told that this situation has created shortages and bottlenecks. What’s going on here?

The first warning was a labor shortage on Southern and Coastal China. Many of the workers from these factories had been laid off and many factories closed as they were insolvent. These workers and the workers still employed who went home for Chinese New Year, did not return to their previous areas as they found jobs inland, or in other factories or stayed in their home areas as China expands it’s manufacturing base. The result in the south is a labor shortage. The next upheaval is a demand for higher wages now being played out in Chinese  automobile factories like Honda’s.

The latest “upside down” story is a shortage of steel shipping containers, known simply as containers. These are the wonderful 20 ft, 40ft and 45 ft steel boxes that have revolutionized international shipping of all kinds of goods and commodities. When the US was importing billions of dollars of goods in  of these containers each year there was a regular route and flow of containers from the orient to retail warehouses and back to the shipping ports to be returned to China to be refilled. That volume is way down and US exporters, who are mostly not located in large cities, are demanding export containers to fill. Instead, the shipping companies are stockpiling the containers or taking them out of service, because it costs too much to return them empty and the price to make new ones has risen significantly. The result is a shortage and another bottleneck to our retail recovery. I am sure there are experts who will read this and say that I have oversimplified the situation, but the result is the same and they don’ t know when it will be corrected

Thanks for the Comments

In a previous post, I wrote about starting this blog as an SEO aid for our website Christmas Night Inc.. I have been writing the blog since April 17,2009. At first, I was straining to find things to write about, until I started to “write what I know”. The more I do this, the more interesting comments I received, to the point where I feel I owe some responders answers to their questions and requests.

I an now finding out how to add pictures, diagrams and. perhaps videos as several of you have requested. I agree, these will make for a better publication. With regard to the blog template, we used the basic WordPress template. As regards spam blocking, WordPress has a  built in spam blocking functionality which the tech people set at a high enough level to be effective.

Going forward, we want to become more sophisticated and try to make our blog look more like our website, as well as use more of the many tools that seem to be available for blogs. But for now, we will continue to write about the industry, our business and business in general as well as publishing stories from really skilled writers and storytellers like Brian “Fox” Ellis

Blogging, Comments and SEO

Starting and maintaining this blog has been, and continues to be, an education. When I first started, my concern was having enough to write about on a regular schedule.I first used stories from the famous story teller, Brian “Fox” Ellis and these went over well. I then talked about new products and new sources, but finally, as the writing instructors advise, I started to write what I know and that is the details of running this business.

Twelve years ago, when we created our first website, we were pioneers. Now we are one of millions of retail websites, but, in many ways, we are still unique. One of our main marketing techniques has been and continues to be “Search Engine Optimization” or SEO. To me, much of this is a black art comparable to alchemy in the middle ages, which claimed to turn base metals into gold. We have a very good marketing organization, Mountain Media, hosting and marketing our sites. As a result of their efforts, we enjoy very high key word  page rankings with Google and other major search engines.

Mountain Media suggested that I start writing a blog to improve our website visibility and I did. This is when I discovered the problem and value of comments. Comments can be just that, a gratuitous entry either criticizing or applauding the particular blog post. Before we put in effective spam blocking software, we attracted hundreds of unrelated email comments touting some unrelated product or service, trying to piggy- back on our blog and website. Now the filtered comments that come through are mostly relevant and offer accolades, ask questions or just comment. Most come from other websites looking to improve their page rankings by commenting on our blog. Since this networking should also helps our page ranking, we mostly approve them. The only ones I have problems with are  the blatantly named sites ( you know who you are). These I do not approve.

I am still learning and I appreciate comments on how I can do this blog better, but don’t try to sell me something.

The Other Season

Owning and running a Christmas product website pretty much means that it is Christmas all year. What with, planning, buying, receiving, updating, photographing, contacting customers, selling and shipping we are busy with Christmas ten and a half to eleven months a year. The main problem with this, as my banker reminds me, is that we make about 70% of our sales in the months of October, November and December.

The obvious solution is to create a counter-seasonal business with sales concentrated in the spring and summer. The easy answer would be a garden product website. Unfortunately, a lot of other smart people had the same idea, so there are many good websites selling planters, birdbaths, fountains and garden statues and ornaments. Rather than find ourselves offering a “me too” website competing mainly on price, we decided to continue our emphasis on the religious aspects of Christmas by offering religious garden statues.

The natural focus was easy to find. Among Christian saints, Saint Francis of Assisi, often referred to as the “patron saint of the birds and the bees” has  a compelling story which appeals to modern sensibilities. He was the first environmentalist and he celebrated Christmas with “live” Nativity scenes using local village people and farm animals. Our vision for the website and product mix was formed during visits to beautiful and peaceful monastery gardens and churchyards in the US, Mexico and Europe. In addition to Saint Francis, we now emphasize, Jesus, Mother Mary and several other Catholic saints.

We now have nice counterbalance to our Christmas business and we continue to study the saints.

Christmas, Made In America

I just returned from a stimulating visit to one of our few factories making Christmas decorations in the USA. This factory, located in a small town north of Tulsa, Oklahoma is a testament to American ingenuity and fortitude. They make a variety of outdoor lighted frames depicting the traditional Christmas figures, including The Nativity, Santas , Snowmen, Toy Soldiers, Nutcrackers, Reindeer, Elves, etc.

Well there is a lot of this product in the US market, mostly made in China, but also in Mexico. The imported product is lighter weight, less durable but cheaper and tempts  retailers who try a container load but rarely repeat their order the following year. In fact, some of this imported product ends up at the American factory for rework, so it can be finally sold.

Why is the American product better? At first glance, it doesn’t look to be made differently, with most of the fabrication and assembly work done by hand. If you look more closely at the US made product, you see heavier gauge steel and aluminum frames and accessories, you see separate clips and extra ties to attach the light sets to the frames and you see much closer spacing of lights in the set. What you don’t see is the incredible attention to detail, both in the planning of the process but also the control of the production and the raw material, semi finished and finished product. What you don’t see is the weekly “Quality Competition” where production colleagues check 55 separate quality items on randomly chosen product and only 100% perfect wins.

This is a family owned and managed company, currently touted by politicians and economists as “the backbone of American business”, When I visit and am so impressed by a 15 year old  company with, at peak, 20 employees, I am inclined, for once, to agree with the “experts”

More On Religious Christmas Displays

My last post attracted a lot of comment. Most of the writers agreed with my position that religious Christmas displays by businesses, communities and institutions continue to grow. Like one of the writers, many of our creche customers, say that they are going back to what their parents or grandparents did, that is replace the Christmas tree with a Nativity Scene as a symbol of the celebration. The size and detail of the new Nativity Scenes make this an attractive decision.Even the folks who cannot bear to part with the tree are adding a Creche around the base.

I grew up in a time when Nativity Creche  were small, table top or mantle-piece figures and the outdoor Nativity display figures were the tacky lighted  blow-mold pieces that were more like cartoon figures than lifelike. In those days the few large life size Nativity Sets were made in Italy by Fontanini,  were limited to indoor use and were very expensive. Well,  Fontanini has now been in business for over 100 years and its Nativities are still very beautiful and very expensive. Like any exclusive product Fontanini  has generated lower price versions, made in the Orient and the Philippines. These Nativity figures are made of resin and resin/fabric combination  and their lower price and great availability as well as a much larger range of sets, has helped build the greater Christmas display of Nativities we see today.

Religious Christmas Displays

A recent article in a Christmas trade magazine had the following quote by a professional Christmas decorator, whose company designs and installs large scale Christmas displays for hospitals, banks and municipalities. He said “religious themes are pretty much out for public displays, unless paid for and sponsored by private funds” Then he remembered two major shopping centers in southern Florida who displayed the full Christmas Creche within the mall. “I had not seen that in a long time”, he mused.

What an interesting comment and, like a lot of life, there is more to the story. Our website features large outdoor Nativity sets and Creche. Every year we sell more large sets to municipalities and public institutions as well as nursing homes, hospitals, banks, manufacturing companies and yes, shopping centers. The two sets referred to by the decorator were sold by us as a result of missionary work by our customer who convinced the mall management that they were well within their rights to display this Christian religious  symbol. We have had customers who purchased Nativity sets to donate to their local municipality only to have the council get cold feet regarding the supreme court ruling  and have to be convinced by a constitutional  lawyer that they were not breaking the law. Please see the note on our website under “Useful Information” entitled “Your Legal Right to Display a Nativity Scene”

Imports of Christmas Product

As many of you know,The USA,this wonderful country of ours, has mostly given up making decorative Christmas items. We import our lights and ornaments, glass and otherwise, plastic and non plastics artificial Christmas Trees as well as fresh Douglas Firs and the various tree lights mini and otherwise.Near and dear to our heart are Nativity Sets which are also imported.

Most of these Christmas imports come from China, but, given the increasing difficulty in doing business in and with China, importers  have been moving farther afield, primarily to the Philippines and Vietnam. We also bring in Christmas articles from Canada, The UK and Italy.

Given the impact of this Great Recession on all parts of our economy, it is not surprising to find that volumes of Christmas imports are down significantly in 2009 when compared to 2007. Most categories of Christmas imports are down between 40 and 50%

The Great Recession as impacted many established importers negatively. They have lost long established factory relationships, had factories close down or go bankrupt, change product mix to exclude Christmas product oe the importer has lost their bank lines used for funding of import container-loads of product.

As a retailer, albeit an internet retailer, we have reacted by establishing direct factory relationships with smaller factories in China, the Philippines and elsewhere. We are designing our own add and stand alone Christmas items with these factories to put our own distinct look on the traditional Christmas outdoor displays. This looks like a good strategy for us. Time and the market will tell.

A New Story from Brian “Fox” Ellis

We are thrilled to feature a new story from the famed storyteller Brian “Fox” Ellis from FoxTales International FoxTales We hope you enjoy it.

A SNOW MAN IN FLORIDA?

(Or, Why are snowmen part of the holiday celebration even in the south?)

“Mommy, Mommy, please tell us about the snow.”

“Please, please, please,” a chorus of swimsuit clad children were pleading with their mother as they took a break from swimming on this unusually warm, sunny day in December on Miami Beach.

“You see, I was born in New Jersey,” she began for the hundredth time, “and what I loved most about the winter was the snow, soft, deep and fluffy or the thick clouds of howling, blowing blizzards of snow, I just loved snow.”

“When will it snow here, mommy? Why don’t it snow here?” were Charlie’s constant questions.

His older sister Sarah answered, “cause it’s too warm here, the snow would melt, silly! Shush.”

Mother continued, “When I was a little girl, not much bigger than you, I remember school being cancelled because of the deep snow. I remember being so excited to spend the day playing in the snow with all of my friends!”

“We would all bundle up in layers and layers of clothes, long underwear, two or three shirts, a sweater, a jacket, a coat, mittens, boots and a hat. We wore so many clothes it was hard to walk. We would all meet at the park down the street. My brothers would go off with the older boys and build a big fort for a rowdy, wet and cold snow ball fight.

“One of the older girls would line us all up and make sure we all stepped in the same footsteps, so 30 kids left only one set of tracks. When she gave the signal, we would all fall down on our backside and move our arms and legs just so… this was not just any old snow angel, no way, by working together we could make a whole choir of angels, a heavenly host singing hallelujah!”

“But my favorite part of winter was making a snow man. When all of us kids worked together, the bigger kids making humongous snowballs, the middle sized kids making medium sized snowballs and the little kids making heads, we could make a whole family of snowmen, snow women and once we even tried to carve a snow dog!”

The kids laughed. The mother was lost in moment of nostalgia, remembering those warm feelings on that coldest of days.

The kids ran off towards the surf. As the youngest boy lay down, he moved his arms and legs just so, making a sand angel. Mother smiled. An idea flashed across her imagination.

On the way home she bought a bag of ice. While the kids were showering and changing, she shaved the ice in the icy maker, forming it into large and smaller snowballs. By the time the kids came back down stairs, there was an entire family of snowmen, snowwomen and even a snow dog sitting in bowls on the kitchen table. The kids laughed and clapped as mother coated them in flavored syrup and everyone ate their own icy snow man.

The oldest daughter Sarah had the biggest Cheshire grin, but said nothing. She knew what lay under the tree wrapped in glittery ribbons and bows.

On Christmas morning, when mother opened her present and first saw a picture of herself as a little girl bundled up in many layers, standing next to a giant family of snowmen, she had a puzzled look on her face. She folded back the tissue paper and saw a beautiful glittering snow man and her heart melted.

“Momma, I got you a snowman that will never melt!”

How many Christmases had passed since that first snowman?

“And so you see, that is why we have snowmen for Christmas, even in the south. That momma, that was your grandmother; that boy, Charlie, was your Uncle Chuck; and that older sister, Sarah, that was me. My grandma sent me the picture of my mother from her snowy childhood in New Jersey.”

As the children sat quietly, snuggling with their mother, they knew they had seen beautiful crystal snowmen, wooden carved snowmen, even plastic snowmen that danced and sang with brightly colored lights, but they had never seen a real snowman.

Their eyes were drawn to the shelf in the corner above the Christmas tree, loaded down with snowmen of all sizes. There were tall snowmen standing under the tree, and several snowmen hung as ornaments upon the tree. The children now knew why their mother loved them so, and wondered, because of the snowmen they had seen at their friends’ houses, how many of their friends longed for the cold bite of snow upon their cheeks.

Dedicated to Trisha Shabet, whose grandchildren still make snowmen for her every winter!

© Brian “Fox” Ellis – www.foxtalesint.com

Interesting Times

It’s an often quoted cliche that there is a Chinese curse which says “May you live in interesting times”. Nevertheless, each new development in the market, email from supplier or service provider, rumor of supplier bankruptcy, price increase, price decline or shortage brings that thought to mind.

Recent letters from our logistics company warn of severe shortages of containers from Asia and dramatic increases in container costs to “make up for” shipping company losses over the last few years. As if these shipping companies didn’t have themselves to blame by adding far too much capacity during the boom times and not wanting to bite the bullet when prices continued to fall. What do they think will happen to all that capacity when times get better and shipping volumes increase? These surcharges may not even last very long after the end of Chinese New Year.

With many Chinese factories closing down or moving to more profitable or higher tech products,there will be more business for factories in other Asian and Pacfic countries such as the Philippines. There will also be more new and inexperienced Chinese factories entering the market without the technical skills or Chinese government subsidies which the older factories enjoyed and product quality could suffer.

The traditional and dominant American/Chinese import company, which designed or specified product in conjunction with several factories, used US trade shows to find out what the market wanted and then imported large quantities of goods to warehouse in the US, is giving way to smaller importers who sell direct to commercial users and consumers, often using only the internet for product offerings. The demise of the trading company Pacific Rim a few years ago, began this trend.

More about this in a later blog. So far it’s fun as well as “interesting”