Author: Jay Spear

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China’s Christmas Industry Predicting Worldwide Inflation?

Many of the labels on our Christmas decorations say “Made in China” but few of us realize that more than 60% of the world’s Christmas goods come from China. The very low profit Chinese Christmas industry has suffered recent difficulties which could predict problems for  Chinese and worldwide manufacturing.

Some of these problems are common to low wage developing countries and include the rising cost of city living as workers move from rural villages with family support and low living costs. Manufacturers in the Chinese Christmas industry have been forced to increase wages as much as 150% and still have faced labor shortages. Factor in the increasing average age of Chinese workers and their reluctance to work long hours for low wages  and live in factory dormitories thousand of mile from their home villages and you can predict more labor shortages for this and other low wage industries. The government has encouraged many factories to relocate inland where cheap labor is more available, but these new locations do not provide the raw material supply, skilled trades and lower transport costs now enjoyed by the ” coastal pods” of Christmas product manufacturers.

Rising material costs are also pressuring the industry. Commodity prices, led by oil and copper, are increasing worldwide. Rising oil prices impact on the transport cost of everything. In addition oil is the feedstock for many plastic resins used in the manufacture of many Christmas articles. Raw materials are estimated to make up 40% of the cost of Christmas products.

Since  profit margins are so low in the very competitive Chinese Christmas business, these problems could become the “canary in the coal mine” for many industries worldwide as China, with its huge demand is driving up commodity prices and exporting inflation and low wage jobs.

The Christmas business will likely continue to be centered in China as no other low age country has the labor supply, concentration of efficient factories and industrial infrastructure to support mass production. Nevertheless, countries such as Vietnam, Bangladesh and even the the Philippines and Indonesia will experience a rapid growth of low wage jobs.

If you disagree, please comment.

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Five Ideas to Prevent Stolen Christmas Decorations

My last blogpost told the story of Betty Wetmore of Columbia MO and her Santa, Sleigh and Reindeer display stolen before last Christmas. Although the police recovered her display, it was broken and she and her husband experienced a lot of stress. Every year, during the Christmas season, we are contacted by customers who have had a lamb or the baby Jesus stolen from their Nativity set, or a Nutcracker or Toy Soldier spirited away and if recovered, in poor condition. We recognize that a determined thief will eventually overcome the best security but we have some suggestions for securing your outdoor Christmas decorations that will make successful disappearance less likely.

  1. Drive a wood post or piece of steel rebar into the ground behind each standing  piece and tether the piece to the post using flexible wire, clear fishing line, or nylon ties
  2. If setting up the display on a wood surface, such as a stable for a Nativity set, screw or glue the figures to the wood surface.
  3. For smaller figures, such as Nativity animals or the baby Jesus, tether them in two places to wood pegs using clear fishing line.
  4. Some of  our larger figures have attachment brackets built in to the structure. These can be used to attach the figure to the wall behind for items such as Toy Soldiers or Nutcrackers displayed on each side of a door or to a floor or ground for such displays as Nativities.
  5. Bare ground attachments can be disguised using mulch or other ground cover.

Please note that these attachment methods can be used to prevent taller pieces falling onto hard ground or walkways and being damaged. Causes can be high winds or vandalism.

We are always looking for innovative ideas for tethering your Christmas displays. Please send us your solutions and we will feature them in an upcoming blog

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Crime Doesn’t Pay?

We recently were involved in an interesting and funny story involving impetuous youth, citizen aided law enforcement, sweet (and tough) victims and perpetrators who “fessed up”.

We had a call from a nice  young man who said he is treasurer for a college fraternity in the Midwest. He wanted to purchase one of our lighted outdoor decorations and have it shipped to a lady in the same town as the college. He referred to the need to replace a lighted decoration that had been damaged by some of the members of his fraternity. He arranged payment and asked for shipping confirmation, which we always provide.

The next day, I had a call from the lady with the damaged Christmas decoration, who gave me the rest of the story. It seems that her decoration was one of several that were stolen in this town before last Christmas. She was upset and prayed for the return of her piece. In the meantime a neighbor, walking their dog late at night, noted the license number of a suspicious car, which was traced back to the college fraternity.

Two boys at the fraternity admitted to stealing a number for Christmas decorations and the fraternity offered to replace any damaged pieces. The boys were charged with a class C felony and will be disciplined by the fraternity ethics council. The nice lady says she feels sorry for them.

The lady’s husband was unable to repair the returned decoration so the fraternity is purchasing a more expensive piece from us to replace it. Finally, the nice lady  said that her church needs a new Nativity Set. Since she is on the committee and now knows about us, our website and our selection of Lighted Nativity Sets,  she will likely buy one from us.

Our thanks to the fraternity!

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A Visit for New Products

We just returned from an exciting and tiring trip to our overseas factories. Aside from many long flights, our main memories are of the skilled and creative factory managers and their dedicated and hard working supervisors and employees. We actually participated in the creation of the final specifications of a resin and fabric Caroler  group, item 60680 (picture and link to follow), as well as an all resin Caroler set for outdoor use , Item 32700 (as above)

We were presented with first approval pieces of a new King, Ox and Donkey for the 54″ Life Size Nativity and we had the fun of adding final decorative touches to these items  We had the fun of approving the new sleigh and finding a Santa for the new Santa and sleigh set and the wonderful new Nutcracker King items 37005 and 37006 which will please a lot of people.

Our approach to direct marketing to consumers is to offer a certain number of new products each year and to continue to listen to our customers regarding improvements  to existing sets and items. I think we are doing this and sales seem to indicate that it is appreciated.

We will continue to update you on these developments. We expect to start receiving replenishment stock and new item in shipments arriving May 15 and continuing through the summer.

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New Items and Ideas for 2011

We are very excited about our planned new items and sets. We have been able to add two new pieces to our beautiful and popular Christmas Nativity and Christmas Nativity with Stable. These new pieces will be a Christmas Shepherd with Lamb and a Little Lamb. Because of a manufacturers cost increase and the two new figures, the price of the sets will increase.

To add to and improve the beauty and functionality of our very popular Life Size Nativity 54″, we have replaced the original Ox and Donkey with larger and more detailed figures. The Life Size Black Nativity which was well received last year, has been improved by the addition of a Shepherd Boy and the new larger Ox and Donkey. As with many of our imported items, factory cost increases and much higher cost for container shipping across the Pacific  have resulted in price increase for these items and others on our website.

The success of our 2010 trial of indoor resin and fabric Nativity figures has prompted us to add a 42in shepherd to the Nativity Pure Charm and Animal set. In addition we will be adding a number of new Nativity, Angel and Christmas figures from the designer Mark Roberts.

More in our next blog.

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A Recap of 2010

Looking back on 2010, we see  a difficult year. Most of our problems were caused by shipping. Not only our import shipping by steel container but also our truck shipping to our customers.

Import shipping became increasingly expensive as shipping companies claimed shortages of steel containers and not enough ships. It’s funny how these became available if we agreed to pay much higher prices. Add to this the very high cost for random government inspections and we were hit with a 40% increase in these costs.

The cost of LTL truck shipping to our customers increased dramatically in 2010. We lost our favorable treatment for residential delivery and the use of a the lift gate and the trucking companies arbitrarily added costs over and above their “usual” 5.9% annual price increase. Of course the “temporary fuel surcharge” continues to climb. I’ll bet that even if diesel fuel fell to $1 per gallon, this would still not disappear.

Many importers of Chinese made Christmas goods reported late and incomplete deliveries. Fortunately, we have most of our figures made in the Philippines, so we had few problems other than shipping delays.

It was the kind of year you would expect as the world economy slowly exits the “Great Recession”, but the tactics used by the shippers and suppliers makes one cynical and I don’t want to become that way when we design and sell such beautiful and inspirational figures.

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Developments at the New Year

Now that the rush is over and we are (mostly) out of stock, it’s time to consider some developments that will likely impact our business in 2011.

The first is the economics of ocean shipping. As you may know, we import most of our manufactured statues from the Philippines and China by shipping container. After a disastrous 2009 where the ocean shipping industry claimed losses of US$ 15 Billion, they started their recovery by raising rates by more than 25% in 2010. With tight capacity, these rates held in 2010. They are now proposing increases for 2011 of as much as 18% for high season (June15 to Nov30) container shipping.

There are two factors impacting this proposal. The first is reported by The Economist magazine on Jan 1, 2011, regarding growth in the world’s fleet of cargo ships. Growth in capacity for all forms of cargo shipping has stayed high despite the word wide recession. Even though world seaborne trade declined by 4.5% in 2009, the world’s merchant fleet grew by 7%. For 2011, container ship capacity is forecast to grow by 50 million tonnes. Offsetting this increase in ship capacity is the continued shortage of new steel shipping containers.

More on this as the season proceeds. In the meantime we have to err on the side of caution in our cost forecasts

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“Good News for our Area”

What a pleasure it is to chat with our wonderful customers! We were talking recently with a woman pastor for a church in the north of Iowa just by the Minnesota border and not far off Interstate 35 which runs from Canada to Mexico, right through the middle of the country. Despite this proximity, the trucking company we use to make our deliveries only goes there once a week and charges a $100 “beyond charge” to do so.

The local ministerial  association in this community was looking to purchase a large outdoor Nativity scene for the local courthouse lawn to replace an “old, worn out, small, 2D plywood set”. They had a total of 64 square feet in which to set up their display. They were concerned about durability in their harsh winters and of course, the total price, including truck freight charges.

We gave them five options ranging in size from 35 inches to over 60 inches and prices from $1549.00 to $9999.00 plus shipping. When they placed their order, they purchased a 30″ Holy Family for $449.00 plus shipping of  219.66. I spoke to the pastor to be sure that was what they needed and she said that given the rough time the area has had during our “Great Recession” even this small new Holy Family represented  “great news” for her town and the churches which had banded together. A local craftsman will build a stable to contain the set and they planned to add to the Nativity in future years

Her positive outlook and optimism is infectious and I hope it spreads.

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Our Great Customers

In an earlier post I said that the season had started. Well, as of September 1, it has really taken off! One of the fun things about offering both religious and secular figures for Christmas celebration is the great variety of people and organizations we deal with.

Recently, I spoke with and we subsequently received an order form Boys Town in Boys Town, Nebraska. Well the name sounded interesting, so I googled it. The full name of the institution is Father Flanagan’s Boys Home in Boys Town Nebraska. This was originally established in 1917 by Father Edward Flanagan as home for orphaned and abandoned boys. Today, Boys town directly cares for over 27,000 boys and girls annually in 14 states and the District of Columbia. Boys Town programs include education, residential homes emergency shelters, foster care, family counseling and a medical research hospital. At the 900 acre home campus in Boys Town,  Nebraska 550 girls and boys in grades 3-12 live and attend school.

Father Flanagan and Boys Town became internationally famous as a result of the 1938 movie Boys Town for which the star, Spencer Tracy, won the Academy Award and a second Academy Award Statue was created and given to Father Flanagan at the suggestion of the movie star. For a concise story of Boys Town and the good they do, please see the Mackinac Article

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The Season Has Started and We See Trends

My last blog exulted that the bulk of our import containers from Asia had finally arrived after many unusual and unexpected delays. Well,obviously, many customers were waiting to hear that and orders started coming in immediately. We were able to begin our on-line advertising campaign last week and our first customer newsletter went out today.

The gratifying result has been many more calls and orders. The Giant Life Size Nativity sets, 15 piece and 12 piece, are very popular and we have already re-ordered from our factory. Our large lighted frame figures and scenes are doing very well and the new Nutcrackers and Toy Soldiers that we introduced this year are attracting great interest and sales. Both categories are trending ahead of past years.

Customer service has spoken to several people who create large outdoor displays at Christmas and who want to add several of our new figures. One lady said she had invested a half million dollars in her display so far. No recession for these folks! We value our relationship with collectors and that is one reason we design and build new items each year. The other reason is that in retail, which we are on the internet, “you are only as good as your newest product” and that is what keeps us going. We have a  great designer( our president) and skilled and efficient factories, plus great staff providing superior customer service. All in all, a good combination.