Inventory Update

Dear Valued Retail Partners,

First I hope this note finds you, your family and colleagues healthy and safe.

As we continue to navigate this remarkable year together, I would like to provide you an update as to our stock levels heading into BTS and Holiday. As I mentioned previously, we have been able to stay operational both here and in the Netherlands, supplying our products without disruption since the onset of the pandemic.

We have made an increased effort to continuously revise and increase our forecasts. We've adjusted our production to incorporate the trend of sales of sets and top open stock SKUs. As promised, we have also increased our stock levels on any and all items which are likely to be in Class Kits, as explained in our Creator’s Studio – Class Kit Essentials reference guide in our current promotion.

Overall, Royal Talens North America has a current fill rate of 99.4% over the past 3 months. We have an increased container schedule for the remainder of the year so that we can keep our fill rates high. We are also shipping fast, generally 2-3 days, if not quicker, on most orders.

The increase in demand of our products as a result of our inventory position is not an easy thing to keep up with, not for us and at times, not for our wholesalers – despite their best efforts. I would advise that if you notice a product out of stock at a wholesaler, please inquire with us at orders.na@royaltalens.com. The chances are very high that we have ample inventory to support you.

We have lowered our drop ship minimums with wholesalers to $500/Net, which would also qualify for our free freight allowance. This Free Freight Allowance is also offered to our direct customers at $500/Net during the BTS period, and potentially beyond if needed.

With these measures in place, we can assure you that if there are inventory gaps – we have made it easy to keep Royal Talens brands in stock, no matter what.

Along with our culture and building our brands, inventory is a top priority in the company as we strive to achieve our mission to become the “Preferred Supplier in the Creative Color Market”.

We hope that through these efforts, we’re doing all the right things to help your business survive and thrive during these times and going forward into the future as a strong partner you can trust.

Warm regards,

Kyle Richardson

President – Royal Talens North America