Uncertainty in Financial Markets Hits USB Flash Drive Prices

The uncertainty in the global financial markets continues to have a direct correlation to the price at which companies can buy printed and promotional USB flash drives in the UK.

Like many products these days USB flash drives are manufactured, assembled and printed in China but unlike most other products USB flash drives tend to be manufactured to order and need to be delivered within a matter of days. The majority of companies that order USB sticks buy them for time critical events so speed of delivery tends to be key.

Global Financial Markets Affect the Price of Branded USB Flash Drives

The typical lead time from placing an order for branded USB sticks to delivery is around 10 days which is staggering when you consider that during that time they have to travel over 5,000 miles and pass through the hands of multiple organisations who manage and co-ordinate their manufacture and their safe passage through customs and a maze of road and flight connections.

The downside with this demand and supply model is that local UK pricing is tightly linked to the US Dollar exchange rate. China trades with the rest of the world in US Dollars so the core components that go to make up a USB flash drive (flash memory, flash controller chips, and housing) are all traded in dollars. Few USB flash drive suppliers and factories hold stocks preferring instead to buy the components as the orders come in which exposes them to movements in the currency markets

Over the last couple of months the Pound (GBP) has fallen from around 1.65 to 1.575, which is a fall of just under 5%. The weakness in the Pound (GBP) ripples through to end-user pricing which has increased by 5% to compensate for the exchange rate falls.

Unfortunately the immediate outlook is not good. Today’s UK inflation figures showed another rise to 4.5%, Europe is still gripped with fear over the Greek debt situation and the rate Italy has to pay on new Bond Issues today increased to 5.6%. This continued “drip drip” of bad news from Europe combined with weak growth and high inflation in the UK means the market sentiment towards the Pound (GBP) is unlikely to change any time soon!

If you are looking to buy printed USB flash drives or place re-orders don’t be too surprised if the prices have moved up a little. No one is trying to profiteer it’s just a reflection of the volatile market conditions.