CLUSTER FLUX: The key factor is the availability of money, which could benefit domestic manufacturers

Subordinate the bloviating winds from the Las Vegas Market. All that hype amid unquantified attendance reports are insignificant if any written orders there cannot be financed.

Incidentally, a market is only as good as the quantity of orders written and booked, not the amount of recreational looky-loos traversing the World Market Center. Those are high-priced handshakes and backslaps.

Financing is the mother’s milk of the furniture business. It requires smart factoring.

Due to the subprime cancer metastasizing through the remaining sclerotic money channels, who knows how much of any order writing in Las Vegas is bankable and, if so, how much will be shipped?

The way of the money world is obvious: Wary factors have pulled in their financial reigns, likely to choke a few factories. In some instances, as much as 80 percent of previously available credit lines have disappeared.

In a frightening mercantile Darwinism scenario, only the strong survive. This means some offshore suppliers could be in trouble.

Even with orders in hand, some manufacturers may be unable to finance production. That means the hot market specials of low priced goods may not be worth the paper they’re written on.

Contrast that against stronger vendors, even amidst the wash of over capacity and high inventory of goods.

But all hope isn’t lost. Savvy retailers may get a break from those remaining, strong and flexible domestic sources. Why? The merchants place smaller, more frequent orders, allowing those suppliers to benefit from the important financial wiggle room needed to stay in business.

With offshore sourcing, factors are scrutinizing the strength of the orders within the constraints of long supply chains and reduced lines of credit.

We are in an era of small is big, less is more and in the black on the bootom line is beautiful.

Comments

[doug brackett]

Damn, Ivan Saul, you watch O'Reilly!!!

Enjoy your stuff.