A Note About Price Increases,
​Production Times, & Inventory

September 14, 2021
​
Over the past few years and throughout the challenges of first the tariffs and then COVID-19, the promotional products industry has worked diligently to minimize price increases for our customers. Historically, when we have had to raise prices, we have done so annually with the release of new products and catalogs with published pricing. Unfortunately many of our suppliers are enacting price increases mid-year to offset the increase in costs due to the rising costs of raw materials, labor, and transportation lingering tariffs; and maintaining compliance standards.
 
You may notice prices increasing shortly, if you haven't already. I want to assure our customers that we have exhausted all efforts to mitigate and absorb these increases as much as possible and only pass on what is necessary.

There are several factors that are causing cost increases across the board in manufacturing, including within the promotional products industry:

• Raw material costs. Market conditions are driving up the cost of commodities (e.g., crude oil, lumber, wood pulp used for paper and plastic materials) which has created cascading cost increases in finished products across all industries. 
• Transportation rates. A global shortage of shipping containers, lockdown restrictions slowing down global trade, lack of manpower and trade imbalances have caused the cost of shipping goods via ocean transport to be 4x higher vs. normal rates and inland transport rates are up to 3x higher.
• Global exchange rate fluctuations. Global vendors are paid in USD, and they primarily pay their workers and suppliers in their local currency. The U.S. dollar has weakened in relation to many global currencies, thus causing suppliers to raise USD prices to compensate.
• Domestic salary increases. Workers in all industries are coming to better understand their worth and bargaining power, and are rightfully demanding better salaries and benefits.​

The global pandemic has also affected inventory in many categories, primarily as a direct result of raw material supply chain breakdowns. Many times it's a simple lack of containers used to ship goods, and other times it's a huge backlog in processing ship manifests because of a lack of personnel.

Finally, that lack of personnel affects production as well. Many of our top suppliers that would guarantee 24- to 48-hour rush service, or even standard 5-day service in many product categories, are pushing 3 to 4 weeks sometimes for production. 

How will we get through this next period of uncertainty? Although this situation is unprecedented, we will get through it. It will take a bit more patience than perhaps we've had to exhibit in the past. It will also take a bit more planning and creativity.

We will do all that we can to recommend products that have deep domestic inventories and reliable production schedules. You can help us by ordering sooner than you think you need to and allowing for possibly longer production schedule than you may be accustomed to.

DKG Promotions promises to continue to bring you unparalleled products and service. I encourage you to reach out to me with any questions that may arise or issues you may face. We look forward to overcoming these hurdles with you and continuing on our mutual path of success.

Sincerely,

Dan Kaufman
President