Supply chain issues weigh on black beauty companies

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“When White America Has A Cold, Black America Has Pneumonia”: Why These Black-Owned Businesses Are Even More Hit By Supply Shortages

For Council Jared

For a four-month period in mid-2020, Atlanta-based hair care brand Meraki Organics Inc. had to mark several items as “sold out” on its website due to a shortage of ingredients and components. ‘traffic jam. This year, said founder Amber Makupson, issues with glass and other raw materials are affecting product availability as the peak shopping season approaches, with no end in sight.

“Black Friday and Cyber ​​Monday are full-fledged sales days in retail,” Makupson said. “Having a product out of stock during a peak selling season will directly affect your annual sales. ”

She later added: “We still face shortages due to the pandemic; I don’t know when things will get back to normal.”

Makupson is among black business owners in the beauty industry, one of the fastest growing online retail segments, who said the months-long supply chain problems caused by the pandemic continue to weigh on operations and profits.

According to business owners, some of the supply chain impacts have been felt by customers, such as unavailable products or higher prices. But others have been internal, such as having to allocate more cash to increase inventory or having to reduce spending on marketing and research and development.

These problems are compounded by some of the long-standing challenges faced by many black-owned businesses, including lack of access to capital, mentors, and other resources that can help them through difficult times, have they declared.

“It kind of goes back to the old saying: 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 these disparities that black companies are already dealing with in terms of access to capital… the flow is changing and not in the good direction.”

Moore said before the pandemic he would order new inventory from his manufacturer three to five weeks in advance. Today, that number is eight to 10 weeks, he said, and he’s taken on “more than I would have preferred” debt to increase his inventory.

Dviniti Skin Care LLC, a manufacturer of natural skin care products based in Philadelphia, Pa., Also ordered more inventory several weeks earlier than normal to avoid running out, said founder Marquita Robinson-Garcia .

Higher initial inventory expenses, along with the rising cost of raw materials used for components such as product labels, resulted in a 25% decrease in monthly cash flow this year compared to last year, she declared. Dviniti had primarily absorbed the increased operating costs throughout the pandemic, Robinson-Garcia said, but will likely increase prices for customers after the new year.

Robinson-Garcia said she has worked in the beauty industry for over a decade and is fortunate to be in a position where she can help mentor other founders of color. She said one of the biggest challenges she’s seen some black founders face during tough times is trying to deal with it without help.

“I think sometimes when we face challenges in our community we tend not to want to reach out,” she said. “And I think it’s just social, or maybe cultural things, that… get in the way of the business. I think we have a lot more to overcome than the supply chain.”

Another supply chain issue is the cost of shipping and transportation, which have increased in part due to 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 C $ 14 to ship a 15 milliliter bottle of perfume from Edmonton, Alta., To New York City. . The cost today is CAD $ 19.

“I absorbed the [increased] shipping costs, ”Nyarko said, noting that she didn’t want the high shipping costs to impact sales. “And it’s just something I had to do to keep growing my business. “


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