ARIA VELASQUEZ: Kelly Straub had high hopes for her business, Shirsty Cat Designs, at the beginning of last year. The independent yarn dyer from Montgomery County, Pennsylvania had plans to attend at least 20 trade shows, mainly in the Mid-Atlantic and New England to sell yarn to crafters looking for something more unique than what could be found at Michaels or Joann Fabrics. When the coronavirus pandemic hit in mid-March, Straub saw her trade show bookings dry up almost overnight. But her real concerns were still to come.
KELLY STRAUB: I had already up stocked quite a lot of inventory. So, I had a lot in stock already and didn’t need to start ordering again really until June.
VELASQUEZ: As summer wore on and her supplies ran low, Straub found a new obstacle in her way: lack of raw materials. Straub sources the wool for her yarn from the United Kingdom and Australia by way of Peru. Both the UK and Peru faced major shipping disruptions last year.
VELASQUEZ: The COVID-19 pandemic threw international supply chains into disarray, making it difficult for small business owners who rely on imports for their finished products to get what they needed. And that was just one of the problems facing businesses like Straub’s.
VELASQUEZ: Calls of “shop small” and “shop local” ran up against the reality of low prices and convenience from chain craft retailers like Joann Fabrics and e-commerce giants like Amazon. Dr. Christopher Parker, an economist at American University, put it simply.
CHRISTOPHER PARKER: Small stores are not going to win on price most of the time.
VELASQUEZ: If you were watching social media last spring, it might have seemed like it should be a boom time for companies like Straub’s. After all, people talked about taking up knitting and other tactile hobbies to occupy their time while service-based businesses across the country were shut down. But the surge in talk never resulted in a surge in sales. In spite of some small spikes in interest, small independent craft retailers find themselves barely hanging on.
VELASQUEZ: “We’re lucky to have kept our business,” David Betten, co-owner of Argyle Yarn Shop in Brooklyn, told Dismal Science in an email. “We get a lot of customers asking us if we’ve been benefiting from the circumstances and it’s kind of awkward to know how to respond since it’s actually been extremely challenging.”
VELASQUEZ: Now as vaccine rollouts gain steam, businesses like Straub’s and Betten’s may continue to struggle for different reasons. Service-based businesses like restaurants can see a light at the end of the tunnel as people return to indoor dining this spring and summer. But craft retailers may not be so lucky. Many trade shows are still virtual for the 2021 season, so the possibility of attracting people with a casual interest is off the table for many exhibitors until next year.
VELASQUEZ: It’s not just craft and hobby businesses that are worried. According to the Small Business Pulse Survey conducted by the Census Bureau, 55% of businesses surveyed expect the pandemic to have negative effects on them for six months or longer. Some, like Straub, have been able to offset their losses a bit by focusing on e-commerce. But even there, Amazon has the advantage.
PARKER: People are used to ordering from Amazon now, right? Amazon’s rank for this inventory is completely digitized. They’re really good at knowing how much inventory they have.
VELASQUEZ: And even where Amazon can’t compete, there are other, more obvious stumbling blocks towards consumers jumping on the e-commerce bandwagon.
STRAUB: It’s a tactile industry. People want to touch it, people want to feel it, people want to see it.
VELASQUEZ: So where does this leave small retailers? Holding on tight and hoping for the best.
PARKER: We’re in a situation where it’s unclear if the market can recover back to supporting small businesses without, I guess, some kind of government intervention to actually help.
VELASQUEZ: The latest economic recovery package, the American Rescue Plan Act, was signed into law a few weeks ago and includes money earmarked for small businesses trying to stay afloat. But whether it’s enough remains a question that won’t be answered for months or years to come. For Dismal Science, I’m Aria Velasquez.