Business: Meet an Accessories Wholesale Business in Bellevue, WA
Interviewer: Emily Feng; April 6, 2020
interviewee's name has been removed for privacy.
A pile of return boxes sit at the company warehouse due to retailer shut-downs (Interviewee).
Could you tell us about yourself and your occupation? How does your occupation impact the local community?
I’m the CEO of a middle-sized wholesale business. We primarily sell fashion accessories like scarves, hats, and kimonos. Although we’re based in Bellevue, our company distributes to both local and national buyers. To get the word out and meet new buyers, we attend a lot of different trade shows across the country. In my opinion, trade shows are really effective: sales reps, owners, and customers can all meet together at the same time, and it’s easy to get questions answered. We have had our business up and running for 8 years, and we’ve established connections with almost 3 to 5 thousand shops.
Your business seems to depend a lot on complex distribution channels. I’m assuming COVID-19 has affected different parts of that; can you expand on how the pandemic has implicated your company?
You’re absolutely right—every aspect of our business has taken a hard hit because of this pandemic. Every day, our UPS driver brings back a few boxes we had previously sent out. In New York and San Francisco, governors have announced public lockdowns. All non-essential boutiques, museum gift shops, and departments stores are closed and can no longer accept our shipments. Every day, we are flooded with emails. Shop owners are telling us to terminate orders.
What’s more, our sales had been going well before the pandemic. The Wynn and MAGIC trade shows had gone better than expected. We’d been closely tracking the stock market, and I remember telling my wife, “Wow! Everything seems to be on the upturn.” Unfortunately, most of our projected revenue has vanished because of COVID-19. What adds to this situation is that most of our products are seasonal. If buyers cancel these orders now, they won’t be restored after the coronavirus—it’s a permanent revenue loss.
As you said, everyone in our distribution channels has been impacted. UPS and FEDEX have lost money. Retailers have lost so much money that their brick and mortar stores are on the verge of bankruptcy. For wholesalers, a slim portion of our revenue remains because we have online sales. Big buyers like Zulily can survive during this time, but it’s obvious that sales are dwindling there, as well. Consumers are losing their jobs and focused on staying healthy, so it’s hard for them to invest money in accessories.
The bitter reality is that even with all that’s going on, overheads like rent still exists. We still have to pay almost 5,000 dollars per month for our warehouses.
Every day, the company receives a flood of emails from retailers describing why their orders have to be cancelled (Interviewee).
What about suppliers? Where are your products manufactured, and has COVID-19 impacted that?
Normally, during this time of year, we have a lot of orders and we maintain close contact with our factories in China. After we attend trade shows, we’re able to better estimate what will and won’t sell; that determines how much we purchase from our suppliers. The situation has been extremely chaotic—when China locked down all of their factories, we desperately needed new shipments. Now, our suppliers are open again, but a majority of our orders have been canceled.
You’ve talked a lot about trade shows. I’m assuming those aren’t going on anymore, for obvious reasons. Have any recently been canceled?
We had planned to attend Las Vegas’ ASD trade show in March. As the date approached, we suddenly realized how quickly COVID-19 was spreading in the United States. Despite that, we still hadn’t received any notification that ASD was planning to shut down its events. Exhibitors like me started writing emails to ASD. We demanded the 2020 event be canceled, and for our payments to cover next year’s show instead.
The response was quite funny. They basically said, “No worries, you’ll receive hand sanitizer outside your booth!” On one hand, I understand their apprehension. ASD is essentially the United States’ biggest trade show. The event generates billions of dollars: hundreds of thousands of people attend every year, airlines sell out of seats, and the hotels hosting it in their ballrooms are always filled up. The restaurants in the area probably get a ton of business, too! Widespread event closures have a ripple effect across our economy, but ultimately, people’s lives are the most important.
"Widespread event closures have a ripple effect across our economy, but ultimately, people’s lives are the most important."
If you are willing to share, how has COVID-19 affected you individually and your family? What do you hope others learn as they adjust to these times?
I think I’ve managed to keep a relatively positive mindset. When times get tough, thinking long-term is especially important. For me, it means taking care of myself and my family with the little things: I’ve been running every morning, eating healthier, and making good food with my kids.
To answer the second part of your question: I think that students can learn a lot of things during this time. The experience is obviously not worth all the lives COVID-19 has taken, but it’s an important experience to learn from, nonetheless. In a sense, this feels like war time. We have to stay safe, find ways to secure food for the family, etc. The biggest priority now is undoubtedly to keep healthy. These fundamental concerns used to be overlooked by fortunate people, and I think this realization has helped us think a bit more globally. There are people who suffer from these issues every day. Lastly, the government needs to think about how we can be more prepared for something like this in the future. Even though a virus may have started in another country, it can still reach us.