RISING PRODUCT COSTS

May 28, 2008

For many years, it has been our (Wholesale Goods, LLC's) policy to hold our prices as low as we can.  However, over the last few months, our business, as well as many others across the country,  have been negatively impacted by a sudden, across-the-board acceleration in inflation, ranging from transportation to the cost of supplies and energy.  As a result of this, you will notice our prices will fluctuate from time to time as the need arises.

Here are a few examples of the inflationary forces directly impacting our business in recent months:

• The price of oil has jumped....an increase well in excess of 100%.
• Plastics prices have been increasing steadily, driven by the price of oil.  An index of the most important raw materials in our products rose in excess of 20% over the last 12 months while repeatedly breaking all-time highs.
• Our transportation costs also have increased dramatically.  Ocean freight carriers already raised their rates twice since the beginning of this calendar year for a cumulative cost increase of more than 20%, and our domestic carriers (UPS, FedEx and USPS) steadily added to fuel surcharges, which are now regularly in excess of 30%.  These fuel surcharges change on a weekly basis and are expected to rise significantly in the coming months.
• At the same time, a rapidly appreciating Chinese Yuan (up 10% over the last 12 months versus the US dollar), accelerating Chinese domestic inflation (15% annualized), and a suddenly tight labor market in South China are all having an adverse effect on our business.

Thank you for your continued support and understanding in this challenging economic environment.  We look forward to building on our current partnership/s with each and every one of  you and we will continue to provide you with the best quality materials available anywhere in the world.