Real inflation

One thing I noticed in creating POs and placing orders for science kit components is that we’re experiencing serious inflation. Dollar-wise, most of my orders are to wholesalers, which generally post a price list for a calendar year and then honor those prices all year long. (I wonder how much longer that’ll last).Those orders reflected zero inflation, but of course the reality is that I’m overpaying early in the year and underpaying late in the year.

But for some smaller items it doesn’t make sense to set up an account with a wholesaler. For example, I order Sharpie markers by the dozen from a retailer. Since my last order, the price has increased from $8.76 per dozen to $8.92. That’s only about 2%, but other items are considerably higher. For example, the last time I ordered composition books from Costco, I paid $1.26 each. This time, they were $1.33 each, or a 5.6% increase.

And a lot of vendors are playing games with quantity discounts. For example, last time I ordered three dozen of one item at $0.60 each. The price dropped to $0.50 each on quantity eight dozen, and $0.40 each on quantity 50 dozen. Now, the same item is priced at $0.70 each for under eight dozen, $0.60 each for eight dozen or more, and $0.50 each for 100 dozen or more. I ordered eight dozen this time at $0.60 each, so technically the price remained the same. (Oddly, this time the shipping was actually one cent less, even through I was ordering eight dozen instead of three dozen.) But the reality is that if I’d ordered the same number, my price would have increased from $0.60 to $0.70 each, or about 16.7%.

I’m told that food prices are rising even faster, but Barbara and I don’t track those.

 

Ordering for more kits

As we headed for the post office this morning to ship more kits, Barbara pointed out that I’d better get off my butt and get more components ordered. So that’s what I’ve been doing this morning, ordering components for five dozen more kits.

Well, five dozen in terms of most components. In some cases, I’m buying enough for many more. For example, I just ordered $106 worth of 650 mg sodium bicarbonate tablets and 500 mg vitamin C tablets, which is enough for probably 150 kits. What the heck.  A $99+ order got me free shipping, and I’m going to need the stuff anyway.

As of now, we’re shipping four or five kits a week, which is actually a lot more than I expected at this point. Early summer is a dead time for science kit orders, and we’ve just started to get the word out. For most people, such kits aren’t impulse purchases. They need to think about it for a while, determine how it’ll fit into their curriculum, and so on. I expect the pace to pick up in mid- to late August and continue at a higher level through September and well into October. I don’t want to have to backorder, but on the other hand I don’t want to be covered up in components and assembled kits. Five dozen at a time, we can handle.

What really scares me is knowing that when the home biology book is published, we’re going to get a flood of orders for the biology kit, probably a couple hundred or more in the first couple of weeks, and possibly 100 a week or more for quite some time. I’ll talk to Barbara about that, but right now I’m thinking about pre-building at least 100 biology kits and keeping components in stock for a couple hundred more. There are obviously inventory storage and working capital issues, although fortunately nothing in the kits will have a short shelf life.