You probably never thought you’d be getting a crash course in economics here on the WeddingPro blog, but with businesses around the world being impacted by inflation and supply chain issues, it would be a mistake to not cover it. Even though the wedding industry is unique and nuanced, it is not immune to the things that impact our economy as a whole. So today, we are going to dig into the broader conversation about rising costs and shipping delays so you can prepare your wedding business to react quickly to change and educate your couples about how either might affect their wedding plans.
What is inflation?
You’ve probably heard a lot about inflation, along with stories about how everyday goods are getting more expensive. But, even if you consume a constant stream of news, you might not be as familiar with what it is exactly or why it happens. Here is a simple explanation from the International Monetary Fund that is relevant to what we are experiencing in the wedding industry:
Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year.
Pressures on the supply or demand side of the economy can cause inflation. Supply shocks that disrupt production, such as natural disasters, or a raise in production costs, such as high oil prices, can reduce overall supply and lead to “cost-push” inflation, in which the impetus for price increases comes from a disruption to supply.
What causes supply chain issues?
In a nutshell, we experience supply chain issues when it’s harder to get what we need due to slow downs, supply issues, or a host of other reasons. And the issues we are experiencing now are largely driven by the COVID pandemic. Many suppliers and manufacturers slowed production in 2020 and early 2021 because demand for their goods dropped (since we were mostly staying at home). But, when the world turned back on in June of 2021, there wasn’t enough existing inventory to satisfy the sharp spike in demand, thus causing a supply chain shortage.
On the other side of the coin, some supply chain issues are stemming from labor shortages, which impacts the ability to move product through the supply chain (from manufacturer to storefront to consumer). This creates bottlenecks in the system. And, on top of those labor shortages, we are also currently experiencing labor shortages at the ports and in the trucking industry, so even if the product is ready for the consumer, it is taking longer to physically get to them. Here is an example we pulled from a recent article published on ABC News:
The American Trucking Association in 2019 estimated that it would be short some 60,000 drivers, but those shortages have increased due to retirements, and new truck drivers needing to be trained due to COVID-19 closures. “There is a shortage of drivers, and it is one of several issues contributing to problems in the overall supply chain,” said Sean McNally, an ATA spokesman. “However, it is a reflection of the strong demand for goods – and everything consumers buy is delivered in a truck.”
How this is affecting wedding pros
Just like other industries slowed production or shut down for significant chunks of time between 2020 and 2021, so did the wedding industry. And with more weddings expected to happen in 2022 than in the past 30+ years, many wedding business owners are struggling to ramp back up after the forced time-off.
This is due, in part, to “supply chain issues causing abrupt price increases” that you need to address. Now is the time for you to review your numbers, touch base with any of your suppliers to see if their rates have changed, and adjust your prices accordingly (you want to maintain your profit after all). In addition, these supply chain issues have created an increased sense of competition for couples and wedding business owners alike.
TL:DR Low supply + high demand = higher prices and increased competition
These economic challenges impact different wedding businesses in different ways, but here are some examples of what you, your vendor friends, and engaged couples might be experiencing:
- Very limited availability for all wedding pros and higher rates for popular wedding dates
- Difficulty finding wedding venues (especially venues with outdoor spaces)
- Shortages of certain rentals like tents and heaters
- Staffing shortages (with assistants, servers, etc.)
- Flowers getting stuck in transit or being extremely hard to find
Pro Tip: As you’re going through your pricing, keep these pricing strategies in mind. Armed with this information, you’ll be able to price your services appropriately and fairly.
What you can do to prepare your business and your couples
Unlike the unexpected (read: fast and furious) impact of the pandemic, these challenges are easier to see coming and prepare for. The key is to plan ahead and set realistic expectations for yourself and with your couples. And here are some ideas to help you do just that.
For your wedding business:
- Pay extra special attention to your calendar and give yourself extra time for everything
- Hope for the best, expect the not-so-great, and have an alternative waiting in the wings
- Review all of your numbers and see what you can do to attract and retain staff
For your couples:
- Suggest they start their venue search 16-24 months from their desired wedding date
- Create designs that are flexible with floral type and color palette
- Encourage couples to have a Plan B regardless of “how slim a chance” it is they’ll need it
You can thrive in the midst of economic challenges when you make a plan and do the work! And, if you want to make sure you are prepared to take on the coming year, be sure to read this business checklist next.
Photo Credit: CrizzyStudio // Shutterstock.com