There has been much discussion over the past couple of weeks about pricing both on a national scale and locally. We saw this week the trouble at Uniglaze, which then sparked conversations on here, and on Twitter, about the way the industry goes about it’s pricing. Lets face it guys and gals, a lot of the time, we make our own mess!
Our industry and economy is going through a period of readjustment where we are getting to grips with higher costs, better product options, consolidation of companies within bigger ones and tighter credit lines. In order to adjust, we as businesses need to make sure we make enough profit out of what we sell to cope with this. However, at the moment, in areas, that common sense doesn’t seem to be prevailing.
I have seen it in the area I work in. There are quite a few double glazing companies in and around here, and competition is quite stiff. However most of the business sell purely on price, not on quality or professionalism. Undercutting is a terrible problem here. We go see customers who have had 3 or 4 quotes from different companies, all getting lower and lower. We are routinely the most expensive. Not because we like to be, but because the product we use is very high quality and we are determined to make something out of the job. At the moment, businesses are petrified of cost, doing it for next to nothing, forcing the other businesses around them to do the same and drive the cost of our wares down. It’s a terrible spiral that will eventually catch some businesses out.
Look at it this way. 10-15 years ago, you could buy a family saloon car for about £7-£10k. Now, a decent family car will set you back a good £18k. Here’s the problem, a house full of windows and doors today costs roughly the same as it did a decade ago! While everything around us has gone up significantly in price, the prices of windows and doors has remained depressed because of our inherent nature of fear of price increases. So while costs around us have been going up, our profit margins have been coming down, eaten away due to many business’s reluctance to pass on price increases. It’s harming both the business, the local industry and the industry as a whole and it’s got to stop.
It’s time for our industry to grow a pair. While turnover is important, profit is imperative. Many businesses, big and small, seem to have taken their eye of the profit margin and it’s really starting to tell now. One of the basic principle of business is to make a profit, yet our industry is making it so difficult for itself by not passing on price increases to the end user, therefore eating away at margins. Plus, customers expect prices to go up! They’re an educated bunch you know! They understand that we’re in a recession and that inflation has an actual effect on the cost of things. Try restoring your profit margins to what they once were, it won’t harm you!