Coronavirus has many U.S. firms waiting for products to ship

When factory in China that makes Romy Taormina’s anti-nausea wristbands closed for Lunar New Year in late January, she expected production to resume by early this month. But many factories across China are still closed to try to limit spre of coronavirus, leaving business owners in limbo.

“re’s guarantee w when y’re going to be up and running,” says Taormina, who’s counting on a shipment of her Psi Bands to meet an increase in orders from Target stores.

Many U.S. small business owners are facing a short of products or components because suppliers, who closed for weeks-long New Year holiday, remain shut due to virus that has killed more than 1,100 people. Even owners who stocked up in vance of holiday are worried about a prolonged outbreak, looking for alternate ways to fill orders and even considering moving ir manufacturing to ar country.

It has been hard for U.S. businesses to get information about how long closings might last. After hearing rumors for a week, Taormina found out only this past Monday from her manufacturer that it was closed and didn’t kw when it would reopen. factory closed Jan. 18 and h expected to get back to work Feb. 2.

Taormina keeps an extra six weeks of inventory on hand for emergencies. But it can take six weeks for shipments to travel by sea and make it through customs. If factory shutdowns are prolonged, “it’s going to be a tight squeeze,” says Taormina, whose company is based in Pacific Grove, California.

Eugene Nyrshin has been meeting with manufacturers in Silicon Valley to build protos for computer and electronics hardware he can’t get from China. He realized around Jan. 26 that he needed to find an alternate way of getting protos; his clients need m in order to decide wher to go forward with production.

“We have some facilities ourselves but often involve or factories for specialized components,” says Nyrshin, co-founder of San Francisco-based C It App. He wants to avoid his customers growing impatient and taking ir business elsewhere.

worry for businesses is that it’s impossible to kw how long wave of illnesses will last. SARS virus that first appeared in China in 2002 caused a global epidemic that didn’t end until July 2003, according to World Health Organization.

Scott Thompson’s suppliers in China make ribbon and or components for hoodies and or garments his company, Saints Sinphony, assembles in San Diego. He’s worried about meeting delines to ship goods to his retail customers; he must ship in June so stores will have merchandise rey for colder wear.

“y need m to be delivered by a certain time, or orwise y’ll cancel,” Thompson says. “If we get stuck with extra product, I could lose a lot of money.”

Thompson is considering moving production to Turkey, where he has also used factories. But process of switching to a new manufacturer takes time, with samples going back and forth between factory and his company; at a minimum it takes 30 days. If China’s factories aren’t producing again in three to four weeks, Thompson says he may have choice but to make a change.

Sam Jackson doesn’t have that option. While he h a large shipment of sandals sent before New Year, giving him a cushion, he’s worried about upcoming peak season for his sales that begins in March. His Denver-based company, Deco Slides, alrey invested $50,000 to get sandals me at a Chinese factory, and estimates it would cost ar $40,000 to have m manufactured elsewhere.

“We don’t have resources to move production out of China at this point,” says Jackson.

Gregory Stoller, who teaches business strategy and invation at Boston University’s Questrom School of Business, tes that U.S. companies began thinking about alternate manufacturing sites like Vietnam and Latin America when Trump ministration’s tariffs on Chinese goods drove up prices on imported goods.

“But ne of m has infrastructure that China has been pouring money into for past 20 years,” Stoller says. That means it’s harder to get goods me and shipped in countries which are still building ir factories, ros, bridges and transportation systems.

Some U.S. owners have gotten some work done with Chinese designers who are working at home. Jason Rosenfeld of Scenic Labs has been able to get designs and blueprints emailed from China. He’s used m to create protos on a 3D printer and send those to customers.

Rosenfeld, whose Kinnelon, New Jersey-based company sells lighting used in film-making and brocasts, increased his inventory before New Year, expecting a three-week production hiatus. w, he says, “I’m asking on some orders for dealers to take partial shipments.” And while he has product upgres coming up, he will hold off on orders for older equipment when factories are running again.

“I don’t want to be stuck with hundreds or thousands of units,” he says.

Companies that have goods manufactured in China aren’t only ones affected. Two clients of Kevin Mercuri’s public relations firm, both China-based, put projects on hold. He’s h to look elsewhere to make up revenue shortfall.

“se are two very large clients who we were basing our forecast for second quarter and beyond on,” says Mercuri, CEO of New York-based Propheta Communications.

He’s reaching out to previous clients and new prospects to bring in revenue while waiting to see if his clients in China can restart ir projects.

“Any good business person has a Plan B in back of ir mind,” he says.

Im Source: AP