F**K Supply Chains
You may be thinking, wow Tim, that’s been a lot of promotions and free stuff lately, isn’t this not a smart business decision and don’t you have bills to pay?
Well... Yeah. But also... this is a problem caused by our good friend, supply chains.
Did I say good friend? I meant I ****** hate the **** and ****** wish that **** **** ******.
We’ve sent a couple emails talking about the problems we’re encountering with supply chains, which frustratingly caused additional delays, and now we’re encountering the (sort of) opposite problem: Inventory glut.
Here’s the chart of what a normal supply chain should look like. Meanwhile, what actually happened is like this:
This is a very simplified version, but it gets the point across. Now that we’re at the point where everything, including the delayed stuff ordered a long time ago, has caught up, we now have too much stuff on our hands, more than is usually bought in that period.
Our ramen lasts a long time, but it doesn’t last forever. That means that we need to move it while it’s still good. I don’t want to do that thing you might have seen on the news where brand “preserve their brand integrity” by literally just destroying a lot of unused product, as it’s wasteful and a pretty bad practice, so we figure... hey, we’ll do more promotions.
A very real worry I have is that by doing this, people start thinking we’ll just always be doing BOGO and free stuff and all of that. The truth is, we’re moving a lot of this stuff not at a profit. BOGO deals are a straight loss for us, actually, but it’s better than throwing away a lot of stuff.
Donations are viable as well to some extent, but by doing promotions and deals, we do get some of the value back from the material costs. As much as it might be nice for buying, it’s pretty scary looking at the massive amount of raw materials we have on hand and wondering just how we can get through all of it before it goes bad, and also thinking about the massive amount of money we had to invest into it, and that we likely won’t be making much money on all of it.
It’s unfortunately a problem that many brands and companies are having now, especially Direct To Consumer brands like us. Especially since we do deal with perishable food, the moment our materials are delivered, we’re set on a time limit to get them out the door. Made To Order has helped with this process in the past, but this is a brand new problem type that our other systems were not equipped to deal with-- We’ve always dealt with things NOT getting here, never with having too much stuff!
So that leaves us here, where I’m slinging out deals left and right, and hoping that it doesn’t make people think that this is something we can afford to do all the time. It puts additional pressure on us, since we’ll be doing a lot more work for a lot less money, but the alternative is to let it all go bad, which is a huge waste in and of itself.
The best case scenario is that we grow significantly in the next few months, and we’re able to move all of that inventory naturally, but we also know from previous years of experience that sales tend to slow down towards holiday seasons. It’s a bit of a tough spot to be in, but we’re working on it and trying to figure it out.
But hey, meanwhile, you get a bunch of ramen for free, right? Literally... come take it off our hands and prevent food waste :^)
Get it here: https://viteramen.com/pages/f-k-supply-chains
On the other hand, if you're reading this after Monday, September 25th, 2023... Sorry, the promotion is over!
-Tim, CEO/Founder Vite Kitchens