Greetings from PromoShop,

We hope this note finds you and yours well and healthy. We wanted to share with you some of the things we are doing, what we are seeing across the various areas of our business, and what we are working on as the world continues to find its footing. It has been more than one year since we sent all of our employees to work from home, and we are proud to share that we remain resilient, optimistic, and working hard. As more people get vaccinated, we are slowly opening our offices to those who desire to come in. It will never be the same, yet we will do the best with what we know, who we have, and what we need to accomplish.

As we always strive to communicate what we see happening, please read below and know that we are doing all we can to mitigate all circumstances. Albeit we only have so much we can affect; together with our supplier partners and our industry as a whole, we are finding different ways to deliver quality products while trying to exceed your expectations.

Driven by globalization, current and post-COVID challenges, supply, and inventory levels are volatile and not easy to predict. We see a few different areas that are changing today’s supply chain:

1. Global commodity prices are expected to rise low double-digits over 2020.

   • Cotton costs have increased 31% over last year

   • Polyester costs have increased 29% over last year

2. Worldwide Logistics are suffering across all continents.

   • There is a shortage of containers in manufacturing cities

     • The usual back-and-forth flow of such has been disrupted and needs to be adjusted

   • Ports have ships waiting for weeks to get off-loaded

     • COVID has changed the staffing needs and everything is slower

   • Shipping costs have increased 293% over last year

3. Exchange rates are causing price increases.

   • With a weaker U.S dollar against many global currencies, the cost of transacting is becoming more expensive.

4. Tariffs have made it more expensive in many categories, regardless of where they come from.

   • Despite the aforementioned, we have seen a steady increase in requests and business is picking up.

Our staff is working at full capacity, and our various teams are finding solutions that will continue to help in our execution and deliveries worldwide.

We understand that all of us and our businesses have been affected in some way or another. Please let us know how we may help you, and also let us know what we can do to better help ourselves.

Stay well and thank you for your partnership.

Best regards,

Memo Kahan
President