Supply chain shortages are affecting product availability heading into the peak shopping season, with no end in sight
Those issues are compounded by some of the longstanding challenges facing many Black-owned businesses, including lack of access to capital, mentors and other resources that can help them navigate tough times, they said.
"It kind of goes back to the old adage: When white America has a cold, Black America has pneumonia." said Justin Moore, founder of Houston-based skin care company Holly Hall Supply Co."All of those disparities that Black businesses already deal with in terms of access to capital ... that's obviously going to be an issue when the nature of your cash flow is changing and not in the right direction." Moore said prior to the pandemic, he would order new inventory from his manufacturer three to five weeks in advance. Today, that figure is eight to 10 weeks, he said, and he's taken on"more debt than I would have preferred" to increase stockpiles. Dviniti Skin Care LLC, a Philadelphia, Pa.-based maker of natural skin care products, has also been ordering more inventory several weeks earlier than normal to avoid running out, founder Marquita Robinson-Garcia said. Higher upfront inventory spending, as well as the increasing cost of raw materials used for components such as product labels, has led to a 25% decrease in monthly cash flow this year compared to last year, she said. Dviniti had mostly been absorbing increasing operating costs throughout the pandemic, Robinson-Garcia said, but will likely raise prices for customers after the new year. Robinson-Garcia said she's been in the beauty industry for more than a decade and is blessed to be in a position where she can help mentor other founders of color. She said one of the biggest struggles she's seen some Black founders have during rough stretches is trying to manage it without help. "I think sometimes when we face challenges in our community, we have a tendency not to want to reach out," she said."And I think that these are just some social, or maybe cultural, things that ... get in the way of the business. I think we have a heck of a lot more to overcome than the supply chain." Another supply-chain related issue is the cost of shipping and transportation, which have grown partly because of labor shortages in the logistics industry. Akosua Nyarko, founder of Canadian fragrance company Lavender Clouds & Poetry, said before the pandemic it would cost less than $14 CAD to ship a 15-milliliter bottle of fragrance from Edmonton, Alberta to New York. The cost today is $19 CAD. “I have been absorbing the [increased] cost of shipping,” Nyarko said, noting that she doesn’t want high shipping fees to impact sales. “And it's just something that I have had to do in order to continue to grow my business.”
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