go through Katherine Hutchison, senior director Threadsy.com,
Inflation is a measure of price increases in our economy. Right now, inflation is the number one consideration, as most Americans pay more than ever for everyday purchases like food, gas, clothing, child care, and more. Daily necessities have become out of reach for some low-income households, a pressing concern for many. Annual inflation, as measured by the consumer price index, was 8.6 percent in May, the highest level since 1981, according to the latest report from the U.S. Bureau of Labor Statistics. The US isn’t the only place where people are experiencing inflation. A Pew Research Center analysis of data from 44 advanced economies found that in nearly all of them, consumer prices have risen sharply since the pre-pandemic period (https://www.pewresearch.org/fact -tank/2022/06/15/in-the-us-and-around-the-world-inflation-is-high-and-getting-high/).
Small businesses are now more vulnerable than ever to rising costs of goods and services due to inflation. Data from MetLife and the U.S. Chamber of Commerce found that 85% of small business owners surveyed expressed concerns about inflation. One in three listed inflation as their top business concern (https://www.forbes.com/sites/forbesfinancecouncil/2022/05/25/the-impact-of-inflation-on-small- businesses-and-how-manage it/?sh=2eb4091cae41). According to a Business.org survey, 92% of small business owners surveyed have dealt with rising costs since the pandemic began. Supplies and services needed to run a business are more expensive, costing 26% more (https://www.forbes.com/sites/forbesfinancecouncil/2022/05/25/the-impact-small-business-currency bloat and how to manage it /?sh=2eb4091cae41).
Small businesses are particularly affected by the inflation that is happening now for several reasons. First, the timing couldn’t be worse. After two years of pandemic-related closures and transitions, many small businesses have yet to return to pre-Covid sales. Now, as they enter a new phase of their post-pandemic recovery, business owners are also having to contend with rising prices. Everything from supplies to rent to wages has become more expensive, and the cost increases for many small businesses greatly outweigh any price adjustments they can pass on to their customers. Finally, as the Federal Reserve raises interest rates to slow inflation, that could hurt small businesses because it is more expensive for them to get loans and credit. Small business owners need to navigate a lot during already challenging times.
As we all know, as the cost of products and services rises, consumers start to buy less and less, and as a result, many small businesses see their incomes dwindle due to inflation. Rising costs mean tighter profit margins. Some business owners may choose to take pay cuts as part of overall cost management, reducing their personal profitability. Others may see top-line sales drop as wallets tighten. There are other small business owners trying to raise prices to keep profits up to inflation, which only drives some consumers away from the small business knowing they can find “better prices” elsewhere. Whether people use their small businesses as their full-time jobs or side jobs, tighter profit margins make it difficult for them to afford food, gas, clothing, and more.
Threadsy helps small businesses by providing wholesale clothing quantities and prices with no minimum order quantities or special credit requirements. Being able to get small wholesale supplies without a pricing premium allows small businesses to better manage cash flow, reduce inventory, and in turn offer lower prices to customers. We’ve recently seen an increase in orders from smaller apparel companies as demand for affordable active t-shirts is on the rise. We’re also seeing an uptick in small business orders from landscape architects, restaurants, builders and more who are looking to find low-cost options for employee uniforms and workwear. If we can help small businesses improve their profit margins a little bit so they can get a living wage and increase their income, that’s what we’re aiming for. We’ve heard from our clients themselves how our pricing makes their small businesses manageable and profitable, and we want to keep them that way for as long as possible. They try to maximize profits by staying small and cutting expenses as much as possible, and we’re excited for Threadsy to contribute to that.
About the Author:
Kathryn Hutchison is Senior Director of Threadsy, one of the leading online retailers of blank apparel in the United States. She joined Threadsy in 2021 to lead the launch of the business, which has grown significantly in the company’s first year. Prior to joining Threadsy, Hutchison held various leadership roles in Marketing and E-Commerce at RetailMeNot and Whole Foods Market.
When she’s not struggling to sell shirts, Hutchison enjoys trying new DIY decorating techniques at her Austin, Texas home. Her favorite tee at the time was the Next Level Apparel Women’s Triblend Dolman Tee (Style 6760) in vintage navy, perfect for cheering on the Dallas Cowboys.