As Candidates Quit, Trinkets Pile Up (Free CareerJournal.com article)
Here's an amusing article from the WSJ… sort of old news now, but also a story about old inventory, so maybe my delay in posting this is appropriate.
“…small businesses responsible for the paraphernalia are devising creative ways to unload their excess inventory. First come the heavy discounts — all “Rudy 2008″ merchandise is 75% off — then more-imaginative steps, such as donating the swag to a homeless shelter or promoting a candidate for an as-yet-unplanned race.”
Ah, the waste of inventory! I wonder how many “Thompson 2008” buttons and “Edwards '08” shirts were mass produced in huge batches? I also wonder how much of this was produced in Asia, with slow supply chains?
But those same factors made inventory control difficult. With the whirlwind pace, and no clear front-runner in either party until late in the race, the vendors struggled to calculate what they needed and when they needed it. Some products were made to order, but most items were ordered in bulk to cut costs. And while some of what is left could have collector potential, most dropped in value the moment a candidate ended his campaign.
It's a classic inventory planning problem, trying to balance the costs of excess inventory with the costs of stockouts, not being able to make a sale if a candidate suddenly surged in the polls. I wonder if Obama items were hard to find as he rose in the polls?
Ordering in bulk or having long lead times makes this planning more challenging. Longer lead times and bulk orders increase both the risk of stocking out (can't get enough in time) or the risk of excess inventory (oops, wish I hadn't ordered those last 5000 “Rudy '08” bumper stickers).
Mr. Shirey has been in this predicament before. He was the official vendor of Mr. Kucinich's campaign in 2004 and had 25,000 T-shirts left when Mr. Kucinich exited the race. Mr. Shirey tried to sell them to a car wash and investigated the possibility of bleaching the T-shirts to sell them as plain white shirts. In the end, he sold the Kucinich shirts, which cost him $6 each, to a rag company for eight cents apiece.
At least there's some use for them…
The article also describes how a campaign typically farms out their merchandise sales to a small business, a company who (out of loyalty) typically handles only one candidate. The company has an incentive to avoid the risk of excess inventory, but the campaign has the desire to avoid stockouts. So I wonder if the campaign compensates their retailers for any excess? Seems like that would be fair thing to consider a “campaign expense.” That's the type of contract I'd ask for if I were the retailer… but then again, I might not get the contract.
One experienced vendor hedged — by not putting dates on much of the Mitt Romney merchandise:
Some more-seasoned vendors went into the primary season with a better sense of how to handle inventory. Brian Harlin, owner of the GOP Shoppe, supplied the 2000 Republican National Convention as well as President Bush's first inauguration. This cycle, he received the contract to run Republican Mitt Romney's store.
His way to skirt the uncertainty? Many of the items sold on RomneyShop.com didn't have a date attached to them. So instead of designing a T-shirt with “Romney for President 2008,” it simply said “Romney for President.” With Mr. Romney rumored to be considering a run in 2012 or 2016, the merchandise retains its value. “This all can be used again,” Mr. Harlin said.
Four weeks after Mr. Romney withdrew from the presidential race, Mr. Harlin sent out an email blast declaring “Romney Shop Sale Begins Today!” The message read: “This is a great opportunity to stock up for future campaigns.”
I wonder if any of the candidate merchandisers tried to “be Lean” — finding local suppliers (or a company like American Apparel that produces clothing in L.A.) or finding a way to order in small batches?
Update: Many candidates started using a producer that uses Lean principles:
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You can order from AA in small batches. Actually, there’s tons of tee suppliers that ship small orders. The issue can be one of color (dye to match, pfd) and screen printing custom images. Those can also be run in small batches but you don’t get economies of scale.
I don’t like the tee business at all. Most tee producers are ordering in quantity and sitting on inventory in advance of orders.
In terms of writing of expenses, and assuming the businesses are large enough – there are a ridiculous number of charities which will take t-shirts off people’s hands working and give you a donation write off.
Where do you think all those Patriot’s Super Bowl Champions t-shirts went?