PPB June 2022

to purchase everything from durable goods and products on grocery store shelves to raw materials for manufacturing. Those who were in business the last time inflation flirted with double digits—including those interviewed in early April for this story—remember it as a very different situation. “It’s nowhere near as bad now as it was 40 years ago,” says Gene Geiger, MAS, who started working on the manufacturing side of his family’s distributorship, Geiger, in Lewiston, Maine, in 1978. “During the Carter Administration, it was much worse. Business interest rates were up to 18%. Back then you couldn’t get a fixed-price quote on certain materials—you didn’t know the price until it was shipped to you.” Pricing on finished goods was also a big consideration. “It was a different world then,” remembers Mark Gilman, CAS, chair of the board for Shawnee Mission, Kansas, supplier Gill Studios, Inc., adding that the biggest concern in those days was managing the price increases that came with inflation. Forty years ago, suppliers printed their catalogs in January and prices remained in effect throughout the year. “We were obligated to sell at the prices printed in those catalogs,” he says. “Inflation is easier to manage this time around because we’ve gone digital.” To hedge against the 1982 inflation, Gill Studios increased its inventory holdings, even if it didn’t have the orders to support it. “We were making a large investment in raw inventory,” Gilman says. “There were high gas prices. Everybody was concerned we were running out of oil, so prices skyrocketed, and availability shrunk.” In the late ’70s, Gilman implemented an 8% price increase on his product line and says he heard plenty about it from customers. He thinks people are more understanding about price Forged InThe Fire Major industry companies were started during the hyperinflationary period of the late ’70s and early ’80s. Despite inflation, or maybe because of it, Tom Riordan saw the late ’70s as an opportune time to get into business and opened supplier Maple Ridge Farms in Mosinee, Wisconsin, in 1978. At the time, the only thing he was focused on was making sales. “Inflation wasn’t even on our radar,” he says. “But a few years later inflation caused the Fed to raise interest rates to 18% and we felt that.” He was also concerned about the pricing printed in his catalog. In 1984 or 1985, when he sent his catalog to the printer, he remembers that he raised prices 10% across the board and sales were off maybe 20% for the year, but profits were up 10%. “We never heard much about that across-the-board 10% price increase, but back then prices of everything were going up,” he says. That same year, Greg Muzzillo also opened his distributorship, Proforma, in Cleveland. He doesn’t recall inflation being a deterrent. “We were growing like a wild week back then—we went from a quarter of a million dollars, to $1 million to $2 million and quickly got to $5 million in those early years,” he says. “I was hustling so hard I didn’t notice inflation.” When Ira Neaman, MAS, opened supplier Vantage Apparel in Avenel, New Jersey, in 1977, he remembers inflation and interest rates being the two main factors that affected his business. “Inflation was 13.5% and consumer interest rates were 20-21%. Business loans were about 4-5% lower and you worked within those constraints. That was the cost of doing business in those days,” he says. “You had to be efficient. No fluff, no waste. Everybody was accustomed to inflation; everyone was dealing with the same issues. It was expected.” FEATURE | Rising Inflation 20 | JUNE 2022 |