Gloves. Nitrile. Latex. Vinyl. How did a commodity item that were recently selling as low as $2.99 box of 100 become America’s next crisis? Why isn’t the media all over this? Because the media is all over what is going on today and not what is going to go on tomorrow when businesses reopen.
Virtually every business that reopens will need gloves. But where are they going to buy them especially if they never bought them before? Let me explain to you because I am so f—–g busy right now, writing actually helps me to relax a bit.
First and foremost, think about the crisis going on right now. First line workers: Hospitals, ER, doctors, nurses, funeral home operators, police, fire. They all wear gloves and have always worn gloves. We take it for granted. Just like they wear face masks. Gloves were always part of their uniform, their profession. We expect gloves to be worn by these professionals.
But guess where gloves are made? China and Malaysia produce more than 90% of the world’s gloves.
Now I am not into politics on my blog as you know my loyal readers, and I am not going to start now. But the crisis we are entering is a Made In America crisis. In fact, every American right now should be thanking China each and every day for making gloves (and now masks) for America. Without China, there would be no gloves.
How did this happen? A combination of many things. Politics. Big business. The Save The Planet organizations and people behind this movement. Rules and regulations by the EPA, FDA, state and local governments. 3M, Kimberly-Clark, P&G and many other companies. People behind the MADE IN USA movement. The Big 3 are part of this. Hey, we are all part of this because we took something as simple as cheap gloves for granted. Now is the time to decide what is best for America’s future.
Here is the issue. Manufacturing gloves is not only hazardous, but the chemicals used in production are carcinogenic. The stack pipes in the sky spew out toxic gases. You have heard these same stories with manufacturing coal, tires and other toxic products. But gloves are especially bad. So bad, we cannot make them in the USA. So bad, no other countries want to make them. And they are so cheap, there is money to be made!
So if they are so bad you may ask, why do China and Malaysia make them? Good question. You can Google search the answer. Just think the word “pollution.” Just think about doing business globally and being a market leader at the same time.
So now you may ask, why can’t China and Malaysia just make more gloves? Another good question. China’s President Xi decided to tackle pollution in his country, most recently as the past 2-3 years. He wants China to become a world leader and set an example. When he makes a decision, the decision is final and carried out most efficiently.
Glove factories were on his list. Each and every glove factory was shut down by the government and had to install very expensive pollution and toxic chemical equipment to remove as much of the toxins as possible before opening back up. This cost the factories millions but they did it to stay in business. Also (I cannot confirm) the decision was made to not open additional factories without permits and most likely, there have been no new factories opened in the last two years. What does this mean? Global supply is limited to current factories output but demand is likely going to be 10 to 50 times more than that. In basic economics, supply and demand laws are at work.
TNG has a dedicated factory in China to produce its gloves, one reason why I know a bit about gloves. Most recent, TNG sold nitrile gloves $6.99 to $7.99 for box 100.
Since the crisis, market prices has risen to $11.99 to $19.99 for box 100. But this is today. This is before businesses even know they need gloves to reopen. This is before the media circus has started. Once this all happens, I predict market prices will surge to $29.99 to $79.99 box of 100.
Why do I think this? We sold Surgical 3-ply masks for years. We sold them for $3.49 a box. Today we are selling for $34.99 a box and cannot keep them in stock. That is 10X previous selling prices and they will go up again. We have containers on order for air and sea shipments and our customers are desperate for them. If gloves go up 10X, that would put a box of 100 nitrile gloves at $79.99.
And unlike masks, the federal government cannot order any USA factories to convert to glove production because they are not allowed to produce them. Bottom line, America is f—-d when it comes to gloves.
Now ask yourself this question: Who is going to pay these new glove prices? Answer: You. This will be the beginning of inflation like we have never witnessed before (and please, I hope I am so wrong in all this). If a glove costs $.50 and a McDonalds worker needs two, that is a $1.00 to $5.00 added to each workers costs per day. McDonalds will have to raise its prices to pay for the gloves. Every business will have no choice. That is how inflation starts.
Try to buy gloves on Amazon. The best online company in the world. In fact, the best company in the world, thank God for them. But if they cannot supply America with gloves, what does that tell you? All gloves sold on Amazon are for first providers only.
I have to get back to work, yesterday I ordered 5 million more masks and now I just ordered 10 million more gloves because of my dedicated factory. Now I just have to figure out what we are going to do tomorrow. I have an idea.
Story to come later.
Those were the days. I used to dream about nail polish, nail polish colors and names, fragrances for lotions and scrubs and my next beach vacation.
Now all I dream about is face masks (WTF, who knew what a N95 or KN95 mask was before this crisis?), gloves, hand sanitizer, disinfectant and alcohol (I wish I was dreaming about Bowmore 15 & Oban), this is about isopropyl alcohol. I am also dreaming about hand soap, body wash, shampoo, cotton rounds, and foil sheets.
Michigan is a Stay at Home state like many others (why the Governor can decide and not the President is another story). Luckily, TNG is an essential company and our distribution center is open while all other employees work from home that can. Due to demand from the medical community, we stepped up efforts to supply critical supplies to that industry and hence the reason for my dreams.
We are in unprecedented times. My colleagues in NYC tell me that the city is way more scared and frightened than 9/11 because at least with 9/11, it was a one-time incident and they could go on with their lives after grieving. COVID-19 affects everyone, hence you walk around Times Square and can be by yourself. As virtually all businesses are shut down, consumers resort to online for everything from ordering goods to entertainment. Suddenly massive chain stores have zero advantage over online companies and in fact, are severely disadvantaged as they have to deal with fixed costs and millions of employees.
THE INDUSTRY SOURCE is the only beauty company open that has inventory of essential goods industry needs. How ironic the likes of Sally, Cosmoprof, Salon Centric and others ran out of isopropyl alcohol weeks ago and we are still shipping it. Other essential supplies from them? Forget it. In a crisis situation, size no longer matters, nimbleness and the ability to deal with the supply chain is everything.
We have KN95 masks coming in next week. We have surgical 3-ply masks coming in next week and the week after. We have hand sanitizer coming in from Italy and now making our own formulation of ForPro Hand Sanitizer Spray which we hope is in stock next week. Hospitals, doctors, nurses and others are very happy to work with us. I spoke to my friend who works at Patterson Dental. He told me they were out of N95 masks weeks ago and will not have any for weeks. This is a company that does more than $4B in business. 3M is running at full capacity but it is not enough.
Our factory that makes Ginger Lily Farms products is churning out for us three truckloads a week of gallons of body wash, shampoo, conditioner, hand soap and hand lotion. With everyone at home, there are more showers taken than ever before. Essential company employees like doctors and nurses are sleeping in their cars at night hoping not to infect their family so the need for shower stuff is greater than ever in places like hospitals not accustomed to this demand.
The government just passed a $2T (yes, that is one thousand billions) aid package. Our deficit was just over $1T and now the government just did that. What does that tell you? Who needs Hollywood! We are living the worst case scenario movie that any writer could ever dream up. India with its population of 1.3B just went into 3 week lockdown as did Pakistan. We already know what is going on in Italy. MI hospitals are reaching 100% capacity and we are only in the late beginning stages of this.
What do I think is most interesting about all this? My kids have called me more this past 7 days than the past 7 years. I have seen more people walking this week than the last decade. People are talking, playing traditional games and no longer taking everything and anything for granted. Yes people are scared and nervous, but they feel safe in their own home and home is more important than ever. Once this passes, how long will these new ideals last?
One thing for certain. Once this ends, certain words, phrases and other unique things from this will cease and desist forever. First to go: Social Distancing. Second to go: Elbow bumps. Third to go: Stay safe. Perhaps the X & Y generation have this whole perspective nailed: WTF, what ever happens, happens. Let’s hang out at the beach, drink some brews and dance the night away. Or in my case, dream about nail polish again.
This is an excerpt of the letter I sent out yesterday to our customers. I am sure you have received many letters from CEO’s of major corporations. Bottom line: Everyone is telling the same message: Stay safe, wash your hands, social distance and get through this. As Larry David would say, “I guess people didn’t stay safe and wash their hands before this crisis.”
Each day we are living in unprecedented times with an unpredictable future. This reminds me of a recent book I read, The Pioneers by David McCullough. McCullough tells the story on how a few heroic pioneers decided to leave the safety of the thirteen colonies in 1788 and head west to explore and develop new parts of America. The area he focused on was Ohio and you learn how Columbus, Cincinnati and the Ohio River became crucial to the rest of America being developed.
What you really learn about were the hardships these pioneers faced from clearing land, to finding food and shelter, to walking thousands of miles with horses and limited supplies to get to Ohio. Many died in their efforts but their efforts and deaths helped to make America what it is today.
America is not short on stories like this one. There are numerous events in our short history that have brought us down to our knees from the Civil War, World Wars I & II, the great depression, the oil embargo of 1973, and most recently, 9/11/2001 and the 2008 financial bust. In every instance, America has emerged stronger and better. This time around will be no different.
However right now we are in the moment and have to do the best we can. In my past 35 years, I have never witnessed supply chain issues like we are having now. If Amazon who has more than 175 distribution centers is out of stock of key items, then you know the rest of the story.
With the exception of gloves and masks, virtually all items in demand are made in the U.S.A. The problem is with consolidation over the past twenty years, there are typically no more than three companies that manufacture more than 80% of the products. So while Procter & Gamble is running their factories full time to make Bounty and Charmin, they are limited to factory production just as Kimberly Clark and Georgia Pacific. Same with hand sanitizer, Clorox makes more than 80% through its Purell brand and can only make so much.
Then the question becomes, which of their customers get goods first? Is it Walmart, Amazon, Kroger, Costco or ???? What about the independent stores? The dollar stores? The government? Commercial and industrial?
Our factories are running full time too. But what happens when a factory has a worker infected with the virus? The factory has to shut down. This has happened to many factories, including bottle companies and silk-screen printers. In times like this, you do what you have to do.
The other issue is raw materials that make things like alcohol, soap and cleaners are in short supply and manufacturers of these materials are raising prices daily. We have experienced many price increases and we are trying our best to hold prices.
We have deliveries of MULTI-CIDE and CITRUS-CIDE arriving weekly along with shipments of gloves from China. Another item that is selling out is foil sheets.
In closing, staying safe and healthy is everyone’s primary focus. Our industry is resilient and we need to take a leadership position no different than the healthcare industry in maintaining the strictest guidelines for cleanliness. THE INDUSTRY SOURCE is your partner in making this happen. Feel free to email me anytime at email@example.com.
In a rare interview with a civilian, President Donald J. Trump (Trump) spent a few minutes with me on March 12 to answer questions about the COVID-19 virus as he was talking up his new incredible spa update at his Mar a Lago resort.
Larry: It was great to see you on live TV last night to assure the American people in the face of this terrible situation with the COVID-19 virus. Can you highlight your key message?
Trump: We’re going to take care of this Larry. My key message is that we are moving very quickly, and for the vast majority of Americans, the risk is very, very low. And I want to add, young and healthy people can expect to recover fully and quickly if they should get the virus.
Larry: That is amazing and good thing that you are young. I have a lot of readers that sent me a list of questions to ask you and I hope you can answer them truthfully.
Trump: Believe me, I’m not stupid, a loser or a moron. This is a tremendous opportunity to Make America Great Again and you’ll see soon enough. What are your questions?
Larry: Before I start with my reader’s questions, I have one question for you. Since the world has never experienced anything like the COVID-19 since the Spanish Flu in 1919, who are you relying on for your information to make intelligent answers?
Trump: Great question. Larry David and I go way back, in fact, he wanted me to be a guest on his Seinfeld show but thought it was a step down from The Apprentice. Of all my friends and confidants, I trust Larry the most. In fact, I gave him one of my caps for his latest season on HBO.
Larry: I love Larry David too and his latest season is one of his best. By the way, do you like your coffee hot?
Trump: Larry’s a great guy and I love my coffee hot, hot, hot just like my women.
Larry: OK, first question is are you concerned that you fired the U.S. Pandemic Response Team in 2018 to cut costs and now this happened?
Trump: Listen, we’re talking about a lot of money, billions and billions. Who would have known this would have happened?
Larry: Now going back to February 25, let me quote you just to make sure nothing is being taken out of context. Referring to the actual virus from China, you stated, “Now they have it, they have studied it, they know very much, in fact, we’re very close to a vaccine.” You also stated, “The virus is very under control in our country.” So where is the vaccine?
Trump: Believe me, we are close, very close. They assured me it would be here by now. I met the director at the CDC, and he’s a great guy.
Larry: Now going back to February 26, let me quote you again, “U.S. containment of the virus is close to airtight.” If that was true, why are college campuses cancelling all live classes and holding sporting events without fans?
Trump: You know Larry, I depend on my team to give me the best information, after all, I am the President of the U.S.A. I remember that, and yes, the person who told me that was a moron and I fired him.
Larry: Now going back to February 27, let me quote you, “# of U.S. cases is going very substantially down, not up.” If that was the case why did the NBA cancel all its remaining games of the season and why are concerts and major events being cancelled all over the country?
Trump: To tell you the truth, this whole thing is the media’s problem. If they didn’t report every single case of when someone comes down with the virus, we wouldn’t have this pandemic. Believe me, more than 500,000 people die of the flu each year, this is no big deal.
Larry: So now that Biden has the Democratic nomination all but locked up and that you are running for a second term, one of my readers has a question about your quote back in February 28, “This is the Democrat’s new hoax,” in reference to the virus. How do you explain that?
Trump: Fake news, you’ll find out when this is all done.
Larry: I want to thank you for your time and candid responses to my questions. What are your plans this weekend to help calm the American people, reassure Wall St. and Make America Great Again?
Trump: Larry David and I will be playing 36 holes at Mar a Lago and we will come up with a plan that will knock everyone’s socks off Monday morning. This will be tremendous, biggest thing I have ever done as President of the U.S.A.
Larry: One last question, what if the CDC recommends you shut the country down like Italy did?
Trump: My personal chefs have stockpiled the best caviar; our freezers are stuffed with lobster and wagyu hamburger patties, and I have the best simulated Top Golf set up so I am all set.