Three Ways To Deal With A Supply Shortage

Published by Kevin Fischer on

You’re here because you need to know your options if or when supplies are scarce and hard to find.

Glassware, wax, and fragrance oil all play a crucial role in the supply chain for candle makers. In late 2017, a factory fire at BASF in Germany disrupted the entire fragrance industry. From candle making to cosmetics the event caused an immediate shortage of citral, a common ingredient in many citrus-based fragrances.

Root causes for shortages vary all the way from natural disasters and global pandemics to a surge in demand from trendy ideas.

What is the common candle maker to do? You only have three options.

Option 1 – Leave candle making behind

When times are tough and you can’t find “your wax” anywhere, the easiest choice is to walk away.

For a lot of people, this is reasonable. After all, why would you associate your craft with an unreliable industry?

If you aren’t running a business or supporting lives with candles, leaving is valid. Leaving is also a wise choice for any of these reasons:

  • Finding supplies during a shortage is stressful and causing mental anguish
  • Trying new things is fairly disruptive to your process
  • You prefer easy and predictable interactions with your suppliers

If you’re sure you don’t want to walk away, but want to know what else you CAN do… read on.

Option 2 – Wait for the supply chain to correct itself

Most of the time, manufacturers and suppliers restore order to their catalog of products.

The BASF fire disrupted a lot of people, but eventually came back. A pandemic in 2020 caused a global glass shortage that lasted far longer than a few months.

Image Source: https://www.insurancejournal.com/news/national/2020/07/24/576842.htm

How long does it take for an industry to recover?

The answer is complicated. When citral supply took a hit from the fire, BASF competitors were quick to capitalize on it. BASF fixed their factory and resumed operations later the next year, and the impact to candle makers was real, but manageable.

Some suppliers had to reformulate around the shortage whereas others didn’t rely on BASF at all.

Fast forward to 2020, and you’ll see a surge in candle making tracking partnered with global supply chain disruptions across many industries. How long some of these supply shortages lasted depend on how coupled they were to various parts of the supply chain.

You can always wait, but how long? Read on if you don’t want to wait for things outside your control.

Option 3 – Widen your portfolio of suppliers

Anyone pursuing option 3 is grateful for option 1 and 2 because it means they have less competition in the marketplace.

Option 3 is reserved for anyone willing to figure it out when things don’t work out just the way they want.

So what does it mean to “widen your portfolio of suppliers”?

Let’s start with an example.

Gary sells water bottles to people. His process involves buying water bottles from Bottles R Us, putting a label on them, and selling them again on Etsy.

Everything is working out for Gary until Bottles R Us starts to have a problem with making new water bottles. Since Gary completely relies on Bottles R Us, he can’t sell anything to anyone until Bottles R Us figures their stuff out, which is completely outside Gary’s control.

Gary has one supplier in his portfolio, Bottles R Us.

When they have plenty of supplies, Gary can do business. If they struggle, Gary struggles.

See where this is risky?

Gary’s ENTIRE PRODUCT LINE is relies on a single supplier, so what should he do? He LIKES Bottles R Us and really doesn’t know much about the other suppliers.

With his hands tied behind his back, Gary starts to reach out to other bottle companies. One year later, he has a good relationship with three different suppliers and a revamped product line.

The next time Bottles R Us struggles to maintain supplies, Gary can rely on some of the other suppliers in his portfolio. He isn’t tied to the success and capabilities of a single source anymore, which makes his business more resilient to failure.

And it isn’t just failure he can stand either.

When Bottles R Us starts changing the shapes and sizes of their bottles, only part of Gary’s product line changes. He doesn’t have to test every single item in his store to make sure it still works – he’s now resilient to CHANGES.

By expanding his supplier portfolio, Gary can withstand FAILURE of a supplier and CHANGES within that supplier.

All of this applies to candle makers.

Expanding your product line across multiple vendors allows your business to remain vigilant in spite of supply chain issues. Maybe your fragrance oils were reformulated or discontinued – it’s okay because you have other suppliers in your portfolio to help fill the gap until you can replace that.

More dramatically, some suppliers go out of business or get overwhelmed by orders. If all your eggs are in that basket you have no choice but to wait or walk away (especially as a small business).

A great starting point for your supplier portfolio is build your entire catalog of work from a MINIMUM of two suppliers for:

  • fragrance oil
  • wax
  • wicks

Jars and containers are trickier simply due to the variations and availability, but having a variety of sizes helps you distribute your supplier dependencies.

In practice, this might mean you have three candle designs for sale that look a bit like the following table:

DesignWaxWickFragrance Oil
1Supplier ASupplier CSupplier C
2Supplier ASupplier BSupplier A
3Supplier BSupplier CSupplier C

While largely theoretical, a catalog like the one above would allow you to continue pouring and selling if any one of the three suppliers had problems.

  • Supplier A is only required for design 1 and 2
  • Supplier B is only required for design 2 and 3
  • Supplier C is only required for design 1 and 3

What if I don’t have a catalog like that but want one?

The fun part of candle making is experimentation because it means you can build out a more complicated product line if you have more dependencies than you want!

While testing requires iteration and patience, expanding your portfolio gives you flexibility during a supply shortage.

Global problems can’t always be avoided, but variety ensures your hobby or business doesn’t rely as heavily on another companies ability to provide service.