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Why Are Supplies Remaining Out of Stock?

 
 
Reply Tue 31 Mar, 2020 08:17 pm
Maybe someone with more experience in retail business can explain this to me.

It's obvious why stores ran out of products people believe they will need in an emergency which confines them to their homes and which might interrupt supply lines - non-perishable foods, toilet paper, disinfecting wipes, soap, batteries, etc. What I don't understand is why stores seem to remain out of these items every day all day.

What I would expect is that I'd see the items around for a few hours, or even minutes, every few days when stores re-supply and then they would sell out quickly and vanish again, but what I actually see is that stores are out of these items 24 hours a day every day.

Why don't they make even brief appearances? Many stores are restricting purchases to two of an item, but it doesn't seem to matter. Can someone explain why these items seem to be out every minute of every day?
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Type: Discussion • Score: 9 • Views: 2,960 • Replies: 116

 
roger
 
  1  
Reply Tue 31 Mar, 2020 08:33 pm
@Brandon9000,
I cannot explain it at all.
0 Replies
 
maxdancona
 
  1  
Reply Tue 31 Mar, 2020 09:04 pm
@Brandon9000,
I can explain.

1) There is a very scary crisis that is uprooting peoples lives.

2) There is a lot of uncertainty. As this crisis unfolded and things started happening quickly, no one had a clue about what was going to happen.

3) There were rumors (that I heard personally) of bank closings and martial law. This scared people even more.

4) When people are uncertain and scared, they go into preparation mode. They start buying things that they might need.

5) Because of the rumors and the lack of information in this crisis, people didn't exactly know what they needed. So they bought toilet paper. Everyone needs toilet paper. Knowing you have toilet paper and bottled water is kind of comforting, and these supplies have the advantage of lasting forever. You can buy five years worth of toilet paper and not worry about it gong bad.

5) This behavior is not rational. But it is understandable. It is what people do when they are scared but don't know what they are supposed to be doing.
edgarblythe
 
  2  
Reply Tue 31 Mar, 2020 09:26 pm
I just know that by the time I get there most of it is gone.
0 Replies
 
Sturgis
 
  3  
Reply Tue 31 Mar, 2020 10:01 pm
Among other things:

People are scared that the Covid-19 outbreak will get worse.(it will)

People are worried the stores will have to shut down because employees and owner/s are too ill to be there (or even sadder, they're dead). so they buy every time they go to the store, even if they have a year long supply already.

Keep in mind too, with all the people now being at home all the time, they no longer spend hours at a job site. Because of this change, they don't have meals away from home. They don't use various other products away from home...paper towels and t.p. and other items.

If there are children at home, the use of paper products is addded in for regular purchase, plus any school meals are now done at home.


Welcome to the new way of life.

0 Replies
 
Brandon9000
 
  3  
Reply Tue 31 Mar, 2020 10:58 pm
@maxdancona,
I'm sorry, but that doesn't explain the question I asked. I stated that I understand why these products sell out. That part isn't complicated.

The part I don't understand is why I never see them re-supplied for even a few minutes before selling out again.
chai2
 
  1  
Reply Wed 1 Apr, 2020 01:10 am
@Brandon9000,
I can't explain it either.
You'd of thought all the hoarders would have their fill by now.

It's really irrational.

Maybe the factories that produce these products are on short shifts or even shut down?

Ah!
I just read something saying the toilet paper (for example) is there, but there's distribution problems. That makes more sense.

Down in San Miguel, shopping for some things, like paper towels and toilet paper, can be an adventure.
One day they'll be none or little to be had, and then the next day, there are literally cases stacked up in the aisles.

That's because trucks have to travel long distances.
Don't know why truck drivers here wouldn't feel safe enough. They are in their trucks and seldom make stops and can control their immediate environment.
0 Replies
 
engineer
 
  2  
Reply Wed 1 Apr, 2020 06:06 am
@Brandon9000,
I think it is just when you check. I made an early morning run (before 8am) and found full shelves, but every basket leaving the store had a mega pack of toilet paper in it.
Linkat
 
  3  
Reply Wed 1 Apr, 2020 06:19 am
@engineer,
engineer wrote:

I think it is just when you check. I made an early morning run (before 8am) and found full shelves, but every basket leaving the store had a mega pack of toilet paper in it.


The problem is you cannot go to the store until an hour after it opens unless you are over 60 - so is it all the seniors buying this stuff up?

I am down to just a few rolls of TP and one roll of Paper Towels.

A shout out - hoarders - you do not need any more
engineer
 
  1  
Reply Wed 1 Apr, 2020 06:47 am
@Linkat,
Good question. I tried Sams at right around 8:00am and the large pallet sitting there was about half gone, but one pack from there is enough for a couple of months, so I stopped looking around. My brother found a Home Depot that had stock in the morning but our Home Depot doesn't carry toilet paper.
0 Replies
 
maxdancona
 
  0  
Reply Wed 1 Apr, 2020 07:26 am
@Brandon9000,
Brandon9000 wrote:

I'm sorry, but that doesn't explain the question I asked. I stated that I understand why these products sell out. That part isn't complicated.

The part I don't understand is why I never see them re-supplied for even a few minutes before selling out again.


Think of it this way. How long do you think it takes for a roll of toilet paper to get to a store from the time an order has been made?

Toilet paper is a a cheap commodity that lasts forever with a usual very consistent demand (in normal times, the amount of toilet paper sold stays constant and predictable from month to month).

The supply chain is set up to minimize the shipping costs and the warehousing costs. You want to pay almost nothing to get it from the factory to the store. And you want to have just enough around to cover the needs of the store so you can use valuable space in your warehouse for something else.

So all of a sudden there is a very odd, completely unexpected, spike in demand. This disrupts what is normally a well managed rather boring supply chain. Orders have to be made, factory schedules need to be shifted.

Then your toilet paper likely gets put on a container ship, where it floats across the ocean for several weeks. Then it gets picked up by a truck and only then it gets to the store.

And then there is the matter of risk. If you are a factory owner who hears that crazy Americans are buying ridiculous amounts of toilet paper. Do you switch over your factory to make toilet paper for them? If you do this you might make money, or the crazy Americans might stop buying toilet paper and then you are stuck with a product you can't sell.

The supply chains for inexpensive products are carefully designed to lower costs. They can't be switched on and off in a day.

Brandon9000
 
  1  
Reply Wed 1 Apr, 2020 07:59 am
@maxdancona,
Better. Thanks for taking the time.
0 Replies
 
maxdancona
 
  0  
Reply Wed 1 Apr, 2020 08:01 am
@maxdancona,
Let's talk about the obvious. The solution is surge pricing on toilet paper. That would solve the problem, but we have broken the system by refusing to allow prices to go up in a crisis.

Without the ability to raise prices on products that are in demand we are asking...

1) Other people to pay the cost of shipping. Shipping products fast costs more money. Someone has to pay this.

2) Other people to take financial risk. People to take the greater risk by making more products than the usual need.

3) Other people to pay the cost of shifting factories, stores and supply change.

The problem is that no one wants to pay these extra costs, and why should they?

If you want stores to be fully stocked, then allow them to raise prices (and stop whining when they do).
0 Replies
 
Linkat
 
  4  
Reply Wed 1 Apr, 2020 08:03 am
@maxdancona,
maxdancona wrote:


Then your toilet paper likely gets put on a container ship, where it floats across the ocean for several weeks.



Other than if you are in the US - most of the TP in the US comes from Mexico and the US so there probably is not much in the way of shipping over the ocean.

That was one premise before of why people were making a run on TP - they thought it was coming from China - however, I recently read how people should stop worrying about it as most of the US supply comes from Mexico and the US.
Linkat
 
  2  
Reply Wed 1 Apr, 2020 08:09 am
Here is some quotes of why at least according to the NYtimes of why we are low on stock:

"toilet paper is typically made to order. Because it takes up so much room, storing large quantities is not profitable, so the industry typically has only a few months of inventory on hand."

And there is some that is manufactured overseas:

"The vast majority of toilet paper consumed by Americans is made in North America. But about 10 percent of the giant rolls of paper that are used to make the rolls that end up in American bathrooms come from China and India. Those imports have been delayed because of the broader bottleneck of shipments from Asia, as the region begins to recover from the virus outbreak and factories come back online.

Joe Raccuia, chief executive of Morcon Tissue, which makes toilet paper in plants across the United States, said his supplier in Mexico had warned him about delays."

https://www.nytimes.com/2020/03/13/business/toilet-paper-shortage.html
livinglava
 
  -2  
Reply Wed 1 Apr, 2020 09:50 am
@Linkat,
Linkat wrote:

That was one premise before of why people were making a run on TP - they thought it was coming from China - however, I recently read how people should stop worrying about it as most of the US supply comes from Mexico and the US.

I've read that toilet paper is destroying the boreal forests. Which forests in Mexico are being cut to make toilet paper?
maxdancona
 
  0  
Reply Wed 1 Apr, 2020 09:57 am
@Linkat,
Do you agree that allowing surge pricing would fix the problem?

Even toilet for paper made in Mexico there is a cost to switch production rapidly. Who pays that cost?
Linkat
 
  2  
Reply Wed 1 Apr, 2020 09:58 am
@livinglava,
perhaps this is toilet paper being used by other countries. Other countries also use TP.

You heard vs what I am obtaining from the NY Trust -

So unless you do not trust the NY Trust vs what you remember hearing - it does not sound like the US TP production is impacting this forest. I could be wrong as I am obtaining this straight from the NYT.

Not sure what you are arguing - other than trying to fight - I am just posting from a source that is typically knowledgeable.
Setanta
 
  2  
Reply Wed 1 Apr, 2020 10:16 am
@livinglava,
What a maroon . . . boreal forests means northern forests. Mexico is not the place to look for northern forests.
livinglava
 
  -1  
Reply Wed 1 Apr, 2020 10:35 am
@maxdancona,
maxdancona wrote:

Do you agree that allowing surge pricing would fix the problem?

No, people are probably already buying up all the toilet paper they can get hoping to resell for a profit.

Higher pricing stimulates more buying/hoarding to induce artificial scarcity and thus keep prices high.


 

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