It costs sport fishing merchant FishUSA Inc. more to ship products to customers. While carrier shipping rates haven’t increased for the brand in 2022, president and CEO Jeff Parnell says the carrier surcharges have, resulting in higher overall shipping expenses. FishUSA ships some heavy products, including ice shelters for ice fishing customers and kayaks.
FishUSA also faced increased freight costs, which went up about 40% to 50% in July 2022, Parnell says.
Higher annual rate increases and additional shipping surcharges have continued throughout the year. In 2022, carriers implemented a 5.9% general rate hike across U.S. parcel carriers, which include FedEx Corp. (express and ground), United Parcel Service, DHL Express, Lone Star Overnight and Pitney Bowes, according to the carriers’ websites. That’s up from 2021, when U.S. parcel carriers instituted a 4.9% price increase.
“When you start looking at those numbers, it goes up,” Parnell says. “2022 is an entirely different game today versus 2021. With items like kayaks, we’re finding margins are even worse than, say, fishing tackle.”
A kayak that would have previously cost a customer an additional $400 or $500 to ship can end up totaling as much as $900 or $1,000 more when the increased freight shipping and handling charges are factored in, Parnell says. He did not share how much surcharges have increased shipping costs overall but noted sales for those items have slowed.
“These are real numbers. You try to pass on what you can to the customer, but they can only absorb so much,” Parnell says. “We have to make decisions at some point. It’s tough times.”
Fallout from COVID-19
When COVID-19 stimulus checks for $1,200 went out to consumers in April 2020, for $600 in December 2020/January 2021 and for $1,400 in March 2021, FishUSA noticed an influx in orders of bigger-ticket purchases soon after, Parnell says.
The demand for kayaks “exploded” after stimulus checks went out, Parnell says. Kayaks vary in price from about $1,000 to $4,000. But inventory delays hindered capitalizing on that demand, Parnell says.
In 2020, FishUSA ranked No. 857 in the Top 1000. In 2021, demand continued, but the retailer found it difficult to keep inventory at the ready. FishUSA is No. 1066 in the Digital Commerce 360 Next 1000. The Top 1000 is Digital Commerce 360’s rankings of the largest North American e-retailers by web sales. The 2022 Next 1000 includes online retailers that generated annual ecommerce revenue between roughly $1 million and just over $39 million in 2021.
“Demand was off the charts, but supply chain problems kept us from stronger sales,” he says.
Like other retailers, “product couldn’t come in,” Parnell says. Continued outbreaks and shutdowns at FishUSA’s vendor manufacturing facilities in China and one supplier’s factory in Wisconsin, among others, affected fulfillment times.
“A COVID outbreak at our vendor’s Wisconsin factory means their workers are out of commission,” Parnell says. “So, while 2021 was a solid year for us, there was a lot of demand left on the table because of supply chain problems.”
This is an excerpt from the 2022 Next 1000 Report. The report can be downloaded now as a PDF for $499. Digital Commerce 360 Gold and Platinum Members receive a complimentary copy of this report as a part of their membership.
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