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Small business owners managing the pressure of inflation

"Keeping up with the pace of change"
Nick Johnson small buisness owner.jpg
Posted at 8:42 AM, Mar 17, 2022
and last updated 2022-03-17 17:31:10-04

BALTIMORE, Md. — Consumers aren't the only ones feeling the pain of inflation. Small business owners also are struggling with higher costs.

For Nick Johnson, the owner of the Fells Point home store Su Casa, getting calls from customers placing orders is great for business, but getting bills for higher business expenses, not so much.

“We’re getting notification almost daily of increases in surcharges on all of our products and our biggest struggle right now is keeping up with the pace of change,” Johnson said.

Over the last year, inflation or the average price of goods and services, jumped nearly 8 percent nationwide. In the Baltimore-Columbia-Towson area, prices are up more than 9 percent.

It's a fact which hasn't gone unnoticed by Johnson.

“We have teams actually in place from the last year, year-and-a-half who’s explicit mandate on a daily basis is to check where we are with prices. We feel terrible about it because that’s not who we are as a company. We’re not a company that constantly changes or raises prices but we don’t have a choice. It’s about existence and our ability to do business in this sort of new climate,” Johnson said.

According to the Wall Street Journal, 66 percent of small business owners are affected by supply-chain issues; 84 percent of small business owners say the pressure of inflation has gotten worse since September, and more than 75 percent say inflation is hurting their bottom line.

Inflation for Johnson means getting billed extra freight charges to receive his products. What started out as pandemic-related surcharges of about 4 percent have now jumped to 20 percent or higher with rising gas prices.

“It’s 20% just added to the very bottom of your invoice. So, you get your invoice with the list of goods on it, and they’re all at regular prices, and then at the end they just tacked 20% onto the total,” Johnson said.

Those higher shipping rates for the products Johnson buys for his store trickle down to higher prices for the big-ticket items people buy, like sofas.

“I understand if people think that they’re too high. I mean things are getting more and more expensive and the only sort of saving grace for us has been at this has been across-the-board. You know, it’s not just furniture. It’s the food to get at the grocery stores, the food and drinks at a bar restaurant. And everything is getting more expensive,” Johnson said.

Su Casa tries to compete with big box stores and online retailers by offering customers free perks, such as local delivery, unpacking, and assembly.

“We’ve been trying to figure out how long we can continue to offer things like free delivery how much inventory we can afford to hold to offset all the other challenges like supply chain issues that we’ve been dealing with,” Johnson said.

Johnson has had a lot to deal with in his 25 years as a small business owner of stores in both Maryland and Delaware.

“Our first was in Fells Point right down the street here. We opened our second location out in Ellicott City. We've been through a couple of disasters there, so disasters are not something we're unfamiliar with, but you just sort of lean into what you do best and keep moving forward,” Johnson said.

One way Johnson said he can compete on price is he offers free local delivery. By using the staff who are already working in the store, he said doesn't have to pay a third-party to deliver. Johnson said he's able to then pass the savings off to his customers.