Businesses far from hurricanes feel impact
NEW YORK — Texas and Florida are usually the biggest markets for ReelSonar’s fishing devices and apps. But recreation isn’t a priority right now — and may not be for a while — in the states amid the devastation left by Hurricanes Harvey and Irma.
Though ReelSonar is based in Seattle, thousands of miles from the damage, it’s feeling an impact from the storms. It’s the same for many small businesses with lots of customers or suppliers in disaster areas. Sales drop off as people and businesses prepared for the hurricanes, and are likely to stay down as everyone assesses and deals with the damage.
“When you’re trying to put your life back together, fishing becomes secondary,” says ReelSonar owner Alex Lebedev.
He doesn’t know yet how much his revenue will be hurt, but had an inkling from Amazon.com, where sales are down 70 percent from a year ago. His products are also sold in hundreds of sporting goods and camping stores in Texas and Florida. One saving grace is that the fishing season isn’t at its peak, and Lebedev is hoping to make back his lost sales during the holiday shopping season.
Companies that suffer losses because of a far-off disaster aren’t eligible for federal disaster aid the way businesses nearby might be. And most small businesses are unlikely to have the expensive and specific kind of business insurance that would cover them in such cases.
Many small businesses whose suppliers have been hurt by the storms are in limbo while they wait to hear how long it will take vendors to be able to send out merchandise or parts. Some companies may have to find alternative vendors.
The Critter Depot, based in Lancaster, Pennsylvania, sells live creatures like crickets and worms to feed reptile pets and has as a main supplier a farm in Okeechobee, Fla. The farm shut down operations as Irma approached, and suffered extensive damage.
Critter Depot owner Jeff Neal has had to tell some customers that they couldn’t get their shipments. Reptile owners tend to buy 1,000 critters at a time, and feed their pets about 20 crickets a day, supplementing their diet with worms.
“They still have to feed their pets, so they’re going to look elsewhere,” Neal says.
Though he knew before the storm he’d lose some sales, he’s offering customers a 50 percent discount to encourage them not to abandon his company permanently. And even though other suppliers don’t give him as good a deal, he’s turning to backup sources until his Florida vendor is up and running again. He expects the storm to cost him as much as $6,000.
Harvey and Irma have sent sales at Promos OnTime down as much as 40 percent since Labor Day, compared to 2016 business. The company, which sells pens, mugs, baseball hats and other giveaways and knickknacks, has lost orders as customers along the Gulf Coast and in Florida canceled events.
“Texas and Florida combined probably account for 10 to 15 percent of our revenue,” says Michael Lerner, owner of the Mineola, New York-based company.
The business Promos On-Time has lost is gone forever — organizers of many back-to-school and charity events planned for this month in the two states are unlikely to reschedule and place orders, Lerner says. On top of that, his biggest suppliers are located in Florida and haven’t been able to fill orders. Lerner has been looking in the Northeast and the West Coast for substitutes.
Small businesses with satellite operations in a disaster area can also suffer losses. Peter Yang estimates that his New Yorkbased ResumeGo, which provides career coaching and resume writing services, has lost $10,000 because its Houston office was shut down by Harvey. The ResumeGo office, which employs nine of his 50 staffers, is on the 21st floor of a building that had severe flooding to its lower floors.
The towel company Erin Robertson started in Los Angeles this year gets its fabric from Florida, but shipments are on hold. That’s slowing her production and ability to send TaTa Towels to customers. She’s had some cancellations, but also had some displaced customers in Texas and Florida ask to have their orders held or sent to different addresses.
Robertson has had to sort through the packages, trying to see if she can catch an order before it goes out. “I totally understand, but from a small business perspective, it’s a lot of work,” she says.
IN THIS MAY 30 FILE PHOTO, the Amazon logo is displayed at the Nasdaq MarketSite, in New York’s Times Square. Amazon announced Sept. 7, that it has opened the search for a second headquarters, promising to spend more than $5 billion.