As we begin the new year, 2021 is already off to a fast start in the fireworks industry. We have a lot of updates to share about the upcoming fireworks season as we all plan ahead for the 4th of July, and Matt is here to share the latest in a new video:
Fireworks Production
The one bright spot right now is fireworks production, which has been going very smoothly. Factories are working quickly through records levels of production orders and fireworks are piling up fast, ready to ship to the US. There’s a break planned mid-February for Chinese New Year, which is normal, but there’s some uncertainty about how quickly production will restart after the break. Shipping from China is very slow right now, which means fireworks warehouses are filling up faster than inventory is shipping out, and they may need to pause for a bit to allow shipping lines to work through that excess.
Shipping from China
Shipping is the major problem facing our industry right now. Global demand is far outstripping available container and shipping vessel supply, both for fireworks and general cargo. As we mentioned in our November update, there have also been some fireworks-specific challenges at the only two ports in China that ship fireworks – Shanghai and Beihai. Currently, Beihai is still closed at least through the end of March, but some sources expect this to extend to April or even May. It’s a little too early to predict at this point, but we’re keeping an eye on it. This leaves Shanghai to pick up all the fireworks demand, leading to severe delays and supply constraints for the spring.
SHIPPING UPDATE 2/2: Good news! We received word that Beihai will re-open for fireworks shipments after Chinese New Year and we have begun scheduling shipments from that port.
Pricing for 2021
Every February, we update our product catalog and pricing for the new year, and this year is no exception. And yes, the rumors are true — prices are going up significantly this year.
On average, our prices will increase about 15%. This is the highest we’ve ever had to increase prices in our 20-year history, and we’re seeing this throughout the fireworks industry. In fact, many wholesalers increased prices last spring and again this past fall in response to increasing costs, but we kept our 2020 prices the entire year to take care of our customers as best we could during a period of unprecedented demand.
Three primary factors are influencing pricing this year:
- Dramatic shipping cost increases. High demand and low capacity for shipping space has driven up costs and led to additional peak season surcharges. These were originally added in December and expected to go away at the end of that month, but they were then extended to January and now February. At this point, we expect them to continue through most if not all of the 4th of July import season.
- A weaker dollar. The value of the dollar compared to the Chinese yuan is down from previous years, making it more expensive to pay suppliers. In the previous couple of years, a stronger dollar relative to the yuan helped offset some other cost increases, but that trend is now moving the other way.
- Base cost increases. There is always a certain amount of increase in the base cost of production from suppliers. This year we’ve been able to work with our direct factory partners to mitigate some of that for our own brands, SFX Fireworks and The Great American Fireworks Co., but some other brands have increased prices substantially.
Once we set our prices for 2021, we are committing to holding them through the 4th of July season. We do expect another year of high demand and low supply, but we won’t increase prices late in the season just because we’re starting to sell out. Once we get through the 4th of July, we’ll re-evaluate to see if shipping prices are easing up and if we can lower prices for fall restock.
Bottom Line – Order Early for the Best Selection
We say it every year, but this year it seems more important than ever — order early for best pricing and selection. We’re still going to run our Early Ship Sale in February, with 10% off in addition to existing volume discounts for up to 25% off your wholesale order. We do understand that the 10% discount doesn’t completely offset price increases but it does help significantly. February 1 is also when we release a lot of the new 2021 items and start taking pre-orders for everything that’s already produced for the 4th of July season.
Our goal is still to ship all orders placed during our Early Ship Sale by the end of April, but that may need to flex a bit due to the current shipping situation in China. We’ll be sure to keep you informed about the status of your order if certain items are causing delays.
We will start updating the wholesale website next week, January 18, with the new products and pricing for the 2021 season. This will give you a chance to plan ahead and see which items are most impacted by the increases, but also to see which new items you want to get this year!
Follow Us for Future Updates
This is obviously a dynamic situation, but we’re keeping track of all the details and will keep you up-to-date. Be sure to follow us for the latest! You can also reach out to our team at 904-213-0615 or [email protected] with any questions.
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