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Diane Lincoln Estes
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Christmas is just a week away and for some parents, finding the specific toy their child wants has been a real challenge this season. That's due, in part, to the supply chain problems around the globe — and how it lands back in the United States. Special correspondent and Washington Post columnist Catherine Rampell reports.
We are just a week away from Christmas.
And, for some parents, finding that specific toy their child wants has been a real challenge this season. That is due in part to the supply chain problems around the globe and how it lands back here.
Special correspondent and Washington Post columnist Catherine Rampell has the story.
In years past, hot toys have run low or run out. Remember Tickle Me Elmo and the frenzy over Furby?
But this year, the out-of-stock signs popped up earlier, not just for the trendy toys, whose sudden popularity is hard to predict, but some of the classics too.
Sharon Gish, Manager, Fat Brain Toys Store:
I called the owner. And I was like, "Are you seriously telling me we're not going to have a Wooden Railway set for Christmas?"
You know, I was a little bit in denial. And he was like, "Yes, I am telling you that train set is done for the year."
Sharon Gish has managed Omaha's Fat Brain Toys Store for 14 holiday seasons. On the game wall, no arcade basketball, no pinball machines, says Ann Messbarger (ph).
Right now, they're out of stock. We're unsure if we will get more.
The problem is surging consumer demand, plus supply chain issues. Higher prices for raw materials, backed-up ports, and trucking shortages have made it more difficult for toy companies to stay stocked.
Take the Fat Brain Toys' distribution center. On our recent visit, workers were busy filling orders.
Mark Carson, Co-Founder, Fat Brain Toys:
We definitely are starting to run out of stock on a few items. Normally, you wouldn't see gaps like this start to come up for another week or two.
Mark and Karen Carson are the company's founders.
Our goal would be that we're at our peak by Black Friday. We'd have an in-stock rate of about 90 percent would be the goal. This year, we're at about 65 percent.
Filling orders for their hottest items, like the silicone push-and-pop toy dubbed the Dimpl has been a challenge.
At the exact same time that the most demand was out there for it, we could not…
… fulfill. And it wasn't that we weren't placing the orders. It's just we could not get them — get them here.
They're doing all they can to get stock in.
Are there still orders that you placed a long time ago that you're waiting to arrive?
Karen Carson, Co-Founder, Fat Brain Toys:
Currently, I think we have 50-plus on the water that are — that we just can't get our hands on.
Fifty containers of product that is somewhere between here and and on the water.
And what does that mean in terms of the value of the product you're waiting on?
I said hundreds of thousands. And what did you say?
That kind of hurts.
Whatever stock does come in sometimes sells out immediately, especially since customers have been warned to shop early.
Howard Bachman, Shopper:
I am shopping early, just because of what I have heard about all the ships sitting out in California waiting to unload and what have you.
Casey Bailey (ph) said stocks were low at the stores she's visited.
Everything is so picked over, or the shelves are really empty.
This is cute.
Staff here are confident they can find the perfect toy for every child. But if your heart is set on a SpinAgain, you may be disappointed.
Has it been hard to keep these in stock?
Yes, it has been. You will notice we either have a mountain of them or none of them, a mountain — yes.
Juli Lennett, NPD Group:
People have cash in their wallets. They didn't spend it on all those experiences last year.
Juli Lennett, toys industry analyst for the NPD Group.
They're spending more, and we have the supply chain issues on top of it. So, the big winners this year for the holiday season are going to be the toys that are actually on the shelf.
Of course, many haven't been.
There are a lot of sellouts right now, first and foremost, trading cards.
Magic Mixies is another hot one. I have not seen Magic Mixies on shelf for about a month now. If you see it, buy it.
The Christmas tree still won't be bare, assuming kids are a little flexible.
I think it's going to be pretty tough on parents if their child has a very specific list. If they say, I just want a Barbie doll, you will be able to find a Barbie doll. If they ask for a very specific one, you might have a little bit of a harder time.
Bigger retailers found creative and costly ways to navigate the problems, says University of Michigan Professor Ravi Anupindi.
Ravi Anupindi, University of Michigan: Walmart and Target and Costco, they chartered their own ships to bring stuff in into the country. So, for them, the distribution problem will be less of a headache.
Meanwhile, smaller companies are struggling to navigate these rough seas.
Joshua Loerzel, President, Sky Castle Toys:
I think all I want for Christmas is ocean bookings. So, if you see Santa, ask him for some extra container space.
Josh Loerzel's startup, Sky Castle Toys, makes LetsGlow Studio. Kids use the special glowing stickers in TikTok videos. The company launched last year.
And, of course, 2021 was like, hold my beer, 2020. You thought the pandemic was bad?
He was planning in the dark.
Typically we'd pay around $3,000 for a 40-foot container, three to four, depending. The most recent containers we shipped were $25,000. So, you're looking at like a six-times increase. So it's been nuts.
Raw material costs have risen, too.
ABS plastic costs up 31 percent. EVA foam, which foam toys — is in a lot of toys. That's up 62 percent.
Reluctantly, he's had to raise his own prices.
We were going to come out at $25, and we ultimately ended up at 35.
Other small toy companies are also facing higher costs, and trying to limit how much they pass onto customers.
Hey Buddy Hey Pal makes holiday decorating kits, including for Easter eggs.
Curtis McGill, Co-Founder, Hey Buddy Hey Pal:
I am the chief financial egg-pert.
Company co-founder Curtis McGill loves to crack those egg puns.
My kids think they're eggs-cruciating when I use them all the time, but you're interviewing me from the egg-quarters.
Jokes aside, it's been a hard year.
You could say you had a container, and three days later, they would say, sorry, we gave it to someone else.
He adapted by cramming in more units each time he did book a shipping container.
We made our packaging 30 percent smaller. That's not something you do lightly in this business. Your package on a shelf with 100 other toys, that's your billboard. That's how you tell your story and set yourself apart.
A few months ago, McGill canceled entire shipments of his Christmas product due to longer transit times.
And we shifted gears to our Easter product. Our EggMazing Egg Decorator is our bread and butter. And we knew we had to have it here in time for Easter. And we left half of our Christmas items in China. They're actually in storage right now.
These products are already made. They're already manufactured and ready to be sold. But they're in a warehouse somewhere in China. Is that right?
In China, right now, yes, ma'am.
Would you ever consider moving some of the production to the United States, or somewhere else closer by? Would that make a difference?
We actually set out to do that from the very beginning. Unfortunately, in order for us to do that, our product would be almost three times more expensive, so we knew that wasn't an option.
Most toys are made in China. But even the few toys already manufactured in the U.S. have had disruptions, like these name puzzles carved at Fat Brain Toys' distribution center.
Three different times this year, we have actually completely run out of wood. The mills have been shut down because of worker shortages. And then, once they did get fired back up, then they didn't have truck drivers to get it from Portland all the way to Omaha.
Fortunately for us, he was eventually able to replenish those wood supplies.
For the "PBS NewsHour," I'm Catherine Rampell in Nebraska.
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Diane Lincoln Estes is a producer at PBS NewsHour, where she works on economics stories for Making Sen$e.
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