A Chat With February’s Profile, Mike Stopka, President/Owner of Design Toscano

CS: What do you see as the biggest challenge for catalogers in the coming years?

MS: I talk to a lot of presidents and we exchange notes, and the tsunami of what’s going on in China right now is pretty horrific. Most people don’t even realize that the Chinese retrieve and barcode change has raised Chinese prices up 15 percent. There’s labor shortages, the price of inflation into China is so high right now. So all of the prices are moving up. One that’s hot right now, and it’s going to sound totally bizarre, but they put in the strictest and most liberal labor laws on Jan. 1. So right now there’s strikes all across China for the workers because of the new laws they put in. Such things as … remember China they’ve always had overtime, but it was straight time or maybe time and a quarter. Right now if you work overtime it’s 200 percent. And if you work on a weekend it’s 300 percent upcharge for overtime. Things like if you work in a factory in China, and you’re there for a year, there’s automatically two-months severance pay if you let that person go. Every employee that you hire has to have a contract for a fixed period of time. So these things are amazingly restrictive to factories and it’s all being played out right now. There’s many factories that are closing in China, so where we as consumers in the United States expect the Chinese products to be priced well and a good supply (i.e., Wal-Mart). The supply chain is really going through some stresses right now. That’s why I’m flying out to China, because I have to talk to vendors. Vendors are having a hard time shipping, having a hard time meeting lead times. And if I’m having this, everyone should be having it. If there’s guys that use middlemen, let’s say you’re a cataloger and you’re buying through the Atlanta gift show or the Las Vegas gift show, they’re having the exact same problems if they’re buying from China. There’s two big tsunamis’ that happened this year [2007] — the postal increases and what’s going on in China, because prices are going way up.