🏭 The Supply Chain Issue

Kent here again.

Let’s talk resilience. You’re going to need it to survive in DTC. 

Not just personal resilience either. You’ll need to build it into key aspects of your business. 

This week's issue hits close to home. I'm going to tell you how supply chain issues nearly killed our company (RV SnapPad) despite 100% year-over-year growth. 

More importantly, I'll share what we learned so you can avoid the same mistakes.

In this issue:

🏢 The Story - From single supplier to survival mode

🔧 The Fix - How we rebuilt our supply chain from scratch

🎯 The Playbook - Essential supply chain strategies for new brands

💡 Take These With You - Tools and Takeaways lists

🏢 The Story

"I don't know where your order is. Or when we’ll deliver it"

That's what my brother had to tell our biggest B2B clients at the start of 2021. 

We were sitting on 40,000 backorders. Our demand was sky-high even though we had turned off all marketing and direct-to-consumer sales. And the world was still in the grip of a global pandemic.

But let's back up.

In 2015, we were lucky enough to find a US manufacturer willing to take a chance on us. They started making and shipping our products for the modest amount of sales our Shopify store sales made every month. 

The supplier seemed perfect initially. They helped us finalize our prototype and were willing to take a chance on a product with zero traction. They were a $30M+ per year rubber manufacturer with a huge warehouse and much bigger clients than us. They were also willing to box and ship every order for us.

Dream scenario for a new brand, right? 

We could focus on marketing and product development while they handled everything else. Besides, we didn’t know anything about inventory management or industrial-scale rubber manufacturing.

By 2019, we were growing more 100% year over year. But there were warning signs we ignored:

• Missed shipping dates became increasingly common

• Communication delays stretched from days to weeks

• Production schedules were constantly shifting

• No clear scaling plan despite our growth

• No reliable inventory numbers

• Opaque, random invoicing

Then the pandemic hit early in 2020. Everything shut down. Borders were closed. 

Our single supplier struggled with staffing and production (moreso than usual). 

We had been in beginning discussions with backup suppliers, but they dropped out or shut down. Conversely, that summer, the RV industry demand exploded (turns out RVing is perfect for pandemics when no one can fly).

By May of that year, we had to shut off all marketing and sales on our site. The large, wholesale accounts we had added in 2019 started bombarding us with orders. Our supplier drip-fed us small shipments, but not in any kind of consistent or predictable manner.

Our cash flow dried up. And for a very long time, running the company merely meant feeding off angry distributors and desperately looking for anyone else who could make our product. 

By early 2021, our original manufacturer went bankrupt. Seized by the bank and sold off. 

🔧 The Fix

Getting back on our feet wasn't pretty, but here's how we did it:

Phase 1: Emergency Response

First, we had to stop the bleeding. We secured business loans to keep the lights on while implementing strict cash flow management. The few POs we were able to fulfill brought some money in.

Every dollar counted. We did what we could to keep our clients in the loop, even though we were often operating in the dark as well. We emailed angry DTC shoppers with letters from the founder, trying to explain why we never had any inventory. 

Meanwhile, we started the painstaking process of documenting our manufacturing process. 

Since we'd outsourced everything to our supplier, we had to reverse-engineer our own product. He had our tool drawings, he had developed the process, and he had all of our physical property. And, in a desperate bid to keep our business, he constantly dodged our requests for access to any of it.  

But, eventually, we got enough stuff together to send to out other potential suppliers and get them to quote for us. 

Phase 2: Rebuilding

Finding new manufacturers was almost like starting from scratch but with higher stakes. 

We knocked on a lot of doors (virtually, because we live in Canada and couldn’t cross the border). 

Most said no. Many were at capacity. Others didn’t work with recycled crumb rubber (our base material). Some just didn’t want to bother with a smaller company. 

But, the few that said yes did so because we weren't just another startup with a dream anymore. We had real numbers: sales history, market demand, brand recognition, and a massive backlog of orders that stood up as a pretty decent first PO. 

That was enough to get in the door. By the fall of 2021, we had three new manufacturers helping us dig out of our still sizeable hole.

Phase 3: Diversification

The real breakthrough came when we stopped looking for one perfect supplier and instead built a network of partners. Each brought something different to the table. 

One was huge with major engineering capabilities that could handle the high-volume demands of our best selling pad. 

Another was a small, family-run company that was willing to work insanely hard and give us the best possible price. 

The third was on the West Coast, closer to two of our bigger accounts. 

This diversification didn't just solve our supply chain problems—it opened up new opportunities we hadn't even considered when we were "married" to our first supplier.

The other thing we did at this point was spin up a 3PL (third-party logistics) partner, so we could consolidate all of our inventory and start shipping both DTC and B2B consistently and on time. 

🎯 The Playbook

So here's what we learned about building a resilient supply chain:

1. Build Relationships, Not Dependencies

Let me be clear: building strong relationships with suppliers is crucial. 

Good relationships can lead to better payment terms or smoother communication. But there's a difference between a healthy partnership and unhealthy dependence.

They’re your supplier, not your spouse.

BTW - here are some red flags we ignored (and you shouldn’t):

• Chronic Order Delays - Nobody's perfect, but frequent delays are deadly. Stock-outs kill momentum, and missing retailer deadlines can trigger penalties (or get you dropped entirely.) This can also badly impact you’re cash management.

• Shifting Excuses - Our supplier had a different "legitimate" reason for every missed deadline. In hindsight, the variety of excuses was itself a red flag. 

Our point of contact was the owner of the business and he was tremendous at spinning tails. But we were also highly dependent on him and fairly naive about the entire thing. 

• Poor Operational Habits - They'd go months without invoicing us, even when we asked. Sure, it helped our cash flow in the early going, but it was a sign that basic business processes weren't working.

• Inventory Chaos - Without our own warehouse management system, we relied on occasional, approximate spreadsheets for inventory counts from our supplier. We could never be certain they were accurate. 

(They weren’t). 

2. Know Your Product 

By now you can see we made a critical mistake by completely outsourcing our manufacturing knowledge. 

When we needed new suppliers, we didn't have:

• Tooling schematics

• Process documentation

• Quality control standards

• Production timelines

• Material specifications

• Testing procedures

Even if you're small, document everything. 

Especially if, like us, you have a proprietary product with IP.

Future you will thank past you.

3. Build Supply Chain Redundancy

First up, you need redundancy in case anything goes wrong. In a slightly different universe, our supplier being seized by the bank ends our company. 

But having multiple suppliers isn't just about playing it safe – it's about unlocking new possibilities for your business. 

Different manufacturers tend to bring something different to the table. One might offer generous payment terms that help your cash flow, while another may excel at rapid production when you need to move quickly. 

Some might specialize in particular processes that help you innovate, while others offer strategic locations that cut shipping costs.

This isn't just risk management – it's about building a supply chain that can adapt and grow with your business.

💡 Take These With You

Today, our supply chain looks very different:

• 2 active manufacturers

• 1 backup supplier on standby, another in active evaluation

• A lawyer-vetted manufacturing agreement that every supplier signs

• 95%+ on-time delivery rate (and improving)

• 14-30 day average lead times

• Full production documentation and QA protocols

• Monthly check-ins from our lead engineer (we hired him from the first supplier after they went out of business)

• 5X production capacity relative to 2019.  

Our tools (plus some recommendations):

• Shopify Plus - We eventually upgraded to Plus over the years for some of its advanced functionality and improved fee structure.

• Veeqo - Free tool that helps us track inventory across suppliers and warehouses as well as all shipments

• Google Sheets - Probably don’t need to list this, but - until you onboard an ERP, you’ll need to build your spreadsheet muscle. Before Veeqo, Google “database” traced our inventory and helped calculate sales velocity and par levels. 

• Fulfil.io - The ERP we are currently considering (but have not made the leap yet). You probably don’t need an Enterprise Resource Planner until you’re north of 8-figures a year. 

• Flexport - The global freight forwarding platform that bought Shopify’s shipping network. We have not moved over to them yet, but they are on the roadmap.

The Takeaway

The biggest threat to your business might not be competition or marketing – it might be your supply chain. Don't wait for a crisis to build resilience. 

Our biggest mistake in this story (and there were a lot of them) was probably hubris. We didn’t appreciate the level of risk our under-developed supply chain posed because we were too focused on what was going right in the early going. 

Because of that we were too slow to diversify. Granted the pandemic was a major wrench in the works that we couldn’t have anticipated, but that’s the thing with risk - something else is always going to be around the corner to test you. 

Your Checklist: 

1. Document your product and manufacturing knowledge

2. Build relationships before you need them

3. Create a supply chain that is both stable and redundant

4. Have high standards and don’t let operational malfeasance slide

5. Never stop improving your processes

Remember: You're not just building a brand. You're building a business that needs to survive even the worst storms.

This is Kent Wilson, signing off.

Now go make your supply chain bulletproof.

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