I actually believe small and medium sized retailers have an advantage in the supply chain as there are (in many instances) fewer hoops to jump through to get product onto the shelf.

Small-to-medium-sized retailers are operating at a disadvantage in managing supply chain disruptions. Leaning into local suppliers offers a three-fold advantage for these retailers – circumventing long-haul supply chain snafus, supporting local businesses, and offering differentiated assortments.

Supply chain disruption plagues many business, large and small, yet the larger retailer has the advantage. Small to medium sized retailers don’t often have the buying power of a larger store. It’s common sense that the companies that buy more (larger chains) may get better treatment.

Smaller retailers can try and find alternative suppliers. Also, leverage the local relationships. Consider working with suppliers as partners in each other’s success, versus just the typical vendor relationship.

Vying for product availability against the bigger retailers when it comes to nationally-recognized name brands has indeed become a challenge for most. Although distributors are doing their best to level the playing field and manage the availability of key items, this all comes at a cost.

Looking at the situation from a glass half full perspective, smaller retailers remain better positioned and more nimble to manage local supply chains and niche products. This competitive advantage must not be overlooked nor underestimated in light of continued supply chain pressure. My advice is to create gateways of local products and encourage consumers to become familiar with the advantages of doing so.

No doubt SMB retailers are at a disadvantage when competing against larger companies in the global supply chain. However SMB retailers have the advantage of being much closer to their communities and could perhaps mitigate some of the complex challenges of the global supply network by buying local. This approach is easier than it sounds, of course, and would require serious assortment analysis, but perhaps the financial incentives for going local are strong enough to warrant the shift.

Most smaller retailers will be using wholesale operations that have the scale and size to compete with larger retailers. If not then their best defense is to use their size to work with smaller local suppliers who cannot get into the large retailers. This will play well with customers, protect them against high shipping costs and if they build strong relationships give them a more secure future. This is not always possible but certainly is in many categories. And even if not possible over the whole range, it may enable them to stay in business. CBRE have a commercial interest in suggesting building larger stocks and I am not sure this is a wise move for cash strapped small retailers!

Carrier surges, bidding wars, and long term container commitments where large retailers are able to compete leave small and midsized retailers taking the leftovers when available. These smaller retailers base their model on being nimble and specialized but this environment is making that impossible without clarity to its consumers when goods will arrive.

There are exceptions, obviously, but I’ve long believed that the Golden Rule of Business applies. “He who has the gold, makes the rules.” The smaller guys have opportunities, most of them cited here, but in all honesty these opportunities don’t come close to creating a level playing field. Get real.

Smaller retailers are at a disadvantage when it comes to logistics and supply chain issues. This can not be fixed by increasing their storage capabilities, because it represents a lower cost to maintain as a part of their overall product cost. Instead, SMB must recognize that increased logistics and supply chain costs are a hurdle that they must overcome through nimble, more efficient, customer service oriented retail positioning, and a balanced inventory approach to better manage their product turns.

Small retailers have been impacted the hardest by the supply chain issue. And I don’t think they’ll be able to walk out of this situation unscathed. The solutions listed above are undoubtedly impractical for a small retailer.