Crain's Detroit Business: Hakan Yildiz on holiday season strategy for small businesses

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When it comes to ensuring there is enough inventory for customers this holiday season, Genuine Toy Co. owner Elle Dare is hoping for the best. Shipping and supply chain issues give her no choice. "Even if I did want to get something the toy companies are so far behind that it'd be next to impossible," she said. Dare, who has owned and operated the downtown Plymouth retailer for 12 years, said that what customers see is what they'll get. Just part of an order placed in January for items coming from China had arrived. Fortunately for Dare, she doesn't incur any costs until her orders are delivered, and she can cancel at any time. Small businesses are at a huge disadvantage compared to larger competitors in terms of access to products and services, according to Hakan Yildiz, associate professor of global supply chain management for the Wayne State University Mike Ilitch School of Business. Because of the shortage of products and logistics capacity, suppliers and logistics service providers will naturally have to offer existing capacity to their largest customers, Yildiz said. "... small businesses are at the mercy of the spot market for access to logistics services, whereas the large shippers would have better rates through contractual agreements," he said. "Despite these disadvantages, small businesses can use their flexibility, creativity, and proximity to customers as advantages." Yildiz said small business owners can use creativity and long-standing, intimate relationships with customers to test alternatives. Existing customers are a small business' biggest advantage as the world battles shipping issues, he said. “Those customers would very much like the small businesses they've been shopping with for a long time to succeed," Yildiz said. "Especially in the context of the holiday season, as consumers will be getting anxious to get their hands on gifts and other holiday items, and close proximity and direct communication from small business owners may go a long way."

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