Small businesses are getting squeezed by rising gas prices

Gas prices have dropped about 20 cents a gallon in the past month, according to Bloomberg data. The news is good for consumers, but too little too late for many small businesses.

Companies that rely heavily on road transport are especially vulnerable to rising gas prices and, as a result of recent hikes, have been forced to streamline their operations. Wayward Seed Farm, a certified organic farm in Marysville, is among them.

“We’ve always been known for offering pick-up locations in every neighborhood in town,” says Jaime Moore, the farm’s co-owner. “From Grove City to Delaware, you could find a Wayward Seed truck around every corner. This year, based on several factors, including the increase in gasoline, we’re cutting back that list. We’ve cut one day completely and are encouraging more community-supported agriculture members to pick up from farmers’ markets and our location in The Hills Market.”

Others companies like Columbus-based Sanfillipo Produce, which supplies specialty produce to numerous restaurants within a 60-mile radius of downtown, have had to institute a fuel surcharge to maintain profit levels.

Sanfillipo Produce now has a $2 fuel surcharge, but its president, Jamie Sanfillipo, says he’s seen other suppliers charge as much as $3.50.

“I’m only trying to cover the cost of fuel, not make a profit,” he explains.

For some businesses, higher gas prices have been double the trouble.

Baskets by Bonnie, a Columbus-based gift basket company, has not only seen its shipping and delivery costs jump, but it also has been impacted by skyrocketing packaging costs tied to the price of petroleum, an ingredient in cellophane and bubblewrap.

“When buying product, I tend to buy in large quantities to take advantage of any free shipping or price breaks that my vendors offer, which allows me to keep our retail prices down,” says Bonnie Segel, owner of Baskets by Bonnie. “We also give our customers the option of choosing their method of delivery. They are able to use their own shippers and couriers, which is helpful for large corporations who get volume discounts or special deals on their UPS, Fed Ex or couriers. We also have some clients pick up their purchase at our office.”

If gas prices were to climb again and remain higher than usual for a sustained period of time, none of the business owners The Metropreneur interviewed were certain they would make any additional adjustments to their operations.

“I’m not sure that we’ll make more than we’ve already made,” Moore says. “We certainly don’t want to be in a constant state of flux and be readjusting every single year. A few adjustments are acceptable, but we’re still running a business and, unfortunately, gas prices are a part of our business.”

Could there be a silver lining to all this? Moore and Segel seem to think so, saying higher gas prices could spark a renewed interest in buying closer to home.

“I see a push towards “localism,” where consumers are shifting their business from large corporations to small, local retailers,” Segel says.