2021 3rd and 4th Quarter Price Increases Update

Monthly Newsletter - Teddy Time Blog

Letter from Chief of Operations Jimmy Banish:

TBF Community,

As we tip the scale towards the second half of 2021 there are a lot of great and exciting things happening in the plush industry that seems to keeping everyone busy. We are happy to see most of our customer base across all industries having a successful rebound after last year’s lockdowns and it’s been equally fun meeting all of our new customers over the last 12 months as well.

As you probably already know and are experiencing, inflation on goods appears to be driving price increases across every industry as the world economy continues to push forward and make up for last year’s lapse, while also trying to satisfy the increasing demand for products and services. In previous correspondences, we provided an update regarding potential cost increases due to raw materials, labor, and shipping rates that could impact our product line for the remainder of 2021 and through Q2 of 2022.

Community Update: Ocean Freight & Price Increases

What This Means:

As of Tuesday, July 13th, 2021 we have begun to receive our first containers that have been drastically impacted by the 200-300% ocean freight increases we have been hoping to avoid. We have been absorbing a 100% increase in container prices as of January this year to the best of our ability along with additional costs over the last seven months. As we receive these new lots of containers that have had a dramatic increase in container prices, we will need to pass along and share these costs with you, our customers, until prices stabilize again. We have been informed by our broker we should plan to continue to see these increases through December of this year with the holidays approaching and the Chinese New Year in February.

What We’re Dealing With:

For a full understanding of what we are currently fielding, historically container prices have been around $4,000-$5,000 depending on the time of year. We have been receiving and absorbing containers costing $10,000+ since January of this year with new shipments on the water currently costing between $16,000 and $20,000+ per 40′ high cube container. On average, each $5,000 increase is the equivalent of $0.28/per piece increase in shipping charges. As you can see, these rates are quickly driving up the cost of our plush and accessory line and this is only the shipping increases we are seeing.

Please see here for more information regarding what is driving ocean freight increases:

Moving Forward and What to Expect:

Here at The Bear Factory, we have always made it our mission to offer the best plush products, customer service, and transparency to our customer base to best support you as we appreciate every single account we have the opportunity to work with. Based on our current working knowledge we anticipate continuing to see container prices sitting around $20,000+ which would drive an estimated $0.60 increase per piece through the end of the year and into Q2 of 2022.

We are handling this by marking each style of the product we are bringing in inventory and tagging each lot with the specific ocean freight increase based on that specific container’s rate. As that product comes into circulation we will be increasing the price of that item at that point in time. You will be able to identify these items as we will be tagging the description stating there has been an ocean freight increase in Red. We don’t feel it would be fair to blanket the entire line with a general price increase because not all items will be impacted by this. However, it is nearly impossible for us to effectively forecast which of these items will be coming into circulation and when based on the current demand and growth we have seen over the last 12 months.

We will do what we can to help provide as much transparency regarding these increases but we will not be able to provide any list or timelines on which items will be impacted and at what time. We are recommending taking this information and pricing your product based on a worst-case scenario effective today to better prepare you for any events or sales you will be having over the next 6-8 months.

If at any time additional information is made available to us that can support this kind of forecasting or preparation, please know we will provide that as soon as we are confident enough in that information and able to share. Our goal in providing this information is to reassure you that these price increases are temporary as we do not intend to keep these once ocean freight prices go back to normal rates.

Thank you in advance for your continued support and business as we work through these turbulent times with our global supply chain. We have decided to increase our manufacturing capability even amongst these obstacles as we would rather stay in stock on items instead of running out by trying to wait out these price increases. At the end of the day, we believe having a product at an increased rate is better than not having a product at all to run a business.

For the most up-to-date information regarding these updates, please be sure to join our community group “The Den” on Facebook which can be found here: https://www.facebook.com/groups/TBFDen

Pure Vida, Jimmy B.