Long Island Retail Supplier Faces Supply Chain Hurdles Ahead of Holiday Rush

By Joe Connolly and Neil A. Carousso

NEW YORK (WCBS 880) — Small businesses are struggling to handle new financial pressures as the COVID-19 pandemic extends into its 18th month.

Hicksville-based Econoco Corporation, which supplies store fixtures and displays to retailers, is now facing a myriad of supply chain issues because of pandemic-related manufacturing holdups overseas and surging demand for consumer products.

“Things will get worse before it gets better,” said Econoco CEO Barry Rosenberg on the WCBS Small Business Spotlight, sponsored by Dime Community Bank.

He said delays are amplified ahead of the holidays.

“(Independent retailers are) not willing to wait 3-4 months for a custom made product,” Rosenberg explained. “We’re struggling to get containers on board ocean freight lines that can ship here to New York. This is the biggest problem we’re facing.”

He told Joe Connolly and Neil A. Carousso that he is now competing with and bidding against big-box stores like Costco for space on ships. All of these factors are driving up prices and being passed onto his customers. Last October, Rosenberg said, it cost them $3,000 for a 40-foot container aboard those ships. But, 11 months later, it costs $23,000 to ship his products from China to the U.S.

“We’ve implemented three price increases to the tune of almost 50 percent,” said Rosenberg. “It’s really a shame, but this is the direction we’re headed and we’re in an inflationary time.”

He lamented that it is disproportionately affecting small and mid-size businesses.

He told WCBS 880 large retailers like Amazon and Grainger, which Econoco supplies racks, mannequins, hangers and other store fixtures to, have demanded that they absorb the increased costs. Rosenberg pulled all inventory from their platforms because it wouldn’t make the company profitable.

“They’re squeezing the little guy,” said Rosenberg.

But, the most successful businesses are constantly making adjustments. Exploring new markets like cannabis is one reason why Econoco has stayed in business on Long Island for 96 years.

Recognizing that retail footprints are shrinking along with demand for his store displays, Rosenberg sought out areas in retail that are not suffering. He found a growing niche in legal cannabis and launched DisplayDispensary.com where he supplies cannabis displays, cash wraps and acrylic retail display showcases to licensed vendors.

“Now, you’ve got 13 states that have recreational cannabis legal, starting out on the West Coast, and I think we were late to the dance, but we are hoping to build our brand,” he said.

New York, New Jersey and Connecticut are in the process of setting up state licensed marketplaces.

“If it’s anything like Colorado or Washington state, you’re going to have two or three cannabis stores on every block,” said Rosenberg.

Recreational use of cannabis has been legalized in 18 states.

The Hicksville-based retail supplier is also changing how they sell. Rosenberg has traditionally hired a robust outside sales team to engage with big buyers, but he is now seeing smaller and leaner competitors signing major retailers such as Banana Republic – a clothing giant an Econoco sales representative had been trying to hook for years.

“What’s happening is, the buyers are getting younger and they are using the Internet for basic purposes,” said Rosenberg, continuing, “There’s a lot less sales people that are meeting at offices, particularly during the pandemic.
Obviously, offices are closed, so you can’t go there. Nobody’s taking anyone to lunch or to dinner or to ballgames.”

The pandemic disruption is opening the door to new opportunities for smaller businesses looking to get big clients.

In pivoting, Rosenberg has upgraded four websites in the last year and a half and is doing more digital advertising to reach those buyers.

See more on the current business challenges and creative solutions on the WCBS Small Business Spotlight video above.