In March I was taken by the team at Deceuninck UK to Belgium to tour their facilities. Their recycling infrastructure is superb, which I am writing about in another article.
During my disucssions with those I went with, it was said that a house full of windows and doors would be sold at twice the price as the UK. Profit margins are around three times better than that of the UK. Home owners also seem prepared to pay more for their windows and doors.
I’m not suggesting in this post that we should be trying to change the UK mindset. That’s not going to happen. Right or wrong, Brits like a bargain, and all the pitfalls that comes with.
But in my latest poll, I am asking whether we as an industry think that home owners should be paying more for their new windows and doors.
Time for higher prices?
Here is what I am asking people up until Monday of next week:
Should home owners be paying more than they do currently for their new windows and doors?— glazingblogger (@glazingblogger) June 10, 2019
I think the initial votes are already telling us what the industry thinks of that.
Of course, the argument about home owners paying more for their new windows and doors is a bit more nuanced than a simple yes or no answer. For example, we’re doing business in uncertain times. Although wages are on the rise and unemployment is at historic lows, there is still pressure on households to afford the essentials, never mind the big ticket items like ours.
The B-word continues to hold back investment with home owners who could afford new windows and doors, but are choosing to hold on to their money until they know for certain what is going on. With a Tory leadership contest underway, attempts in Parliament to block no-deal and proroguing of Parliament, who knows what is actually going to happen in the weeks and months ahead.
That being said, our industry has made great efforts of investment to diversify what we do. We’re a much changed industry compared to a decade or so ago. And that investment needs returning by way of sales and decent profit margins.
It’s about profit
The word “profit” should not be a dirty one. We’re not in this business for the good of our health, and we’re certainly not charities. We run companies to build something and make money. Nothing wrong with that.
However, our industry has long been juvenile in how it runs itself. Other countries, like Belgium for example, have fenestration sectors that appear to be built on solid business models that make money. They are able to sell their wares to home owners for far higher prices than we do here, which allows them to make good profit margins. In the UK, for whatever reason, we decided that the race to the bottom was the way to go when PVCu became a dominant force, and we have been fighting an unhill battle to recover ever since.
We’re our own worst enemies. Year after year our costs go up. Wages, materials, energy, fuel, transport, marketing. Everything we need to run a business. Yet, in the face of all those costs creeping higher, so much of our sector continues to sell based on price, undercutting the competition and promising to beat whatever price their competitor is giving. That’s no way to run a profitable business.
Because of our inability to sell based on quality and service, therefore surpressing prices, our industry has been held back. Cars are a good example of an industry that has moved along nicely. 20 years ago a family car would cost far less then than it does now. For a decent family car, you’re looking in the region of £25k-£30k. 20 years ago it would be half that. The car industry has been smart enough to know that as standards and quality get better, they can command better prices. They didn’t do it in one big jump, they simply nudged the prices higher a little bit each year. Car companies maintained their profitability on the most part, and are a good example of a sector that moves in the right direction.
For us, we still have products that we can buy cheaper now than what it cost two decades ago. Thats utter madness. So whilst we’re all voting to agree that home owners should be paying more for their new windows and doors, we’d actually have to back that up with action. Action being genuinely charging more. Got to talk the talk.
I’ll cover the results of the poll next week when it closes and we get the final numbers.
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