Everyone hates them. Price increases. They’re never welcome and only make doing business that little bit harder. Most of us threaten/complain to our suppliers and force them to swallow up some, if not all of it. It’s helpful to you as an installer, but damaging to your supplier. So should we all just be accepting of price increases, as disliked as they are?
Probably. We all know that the cost of everything continues to go up, and oil is the main driver of that. When oil goes up, transport costs go up, then everything else made out of oil or needs to be transported goes up. We can’t get away from it. But I do think that now we should be passing on our prices increases to the end user.
Why? Because the more we force our suppliers to take them on the chin, the less profit they make and the harder it is for them to stay in business. The last thing we want is for our suppliers who have dealt with for us years to go under because they kept absorbing price increased from the suppliers above them.
It’s also no good for installers to keep absorbing price increases either. Margins are already very tight for most installers and importance must be placed on maintaining profit in the business. Absorbing price increases won’t do this.
As uncomfortable as it may be, these increases must be passed on to the consumer. Imagine if supermarkets did the same thing. Say the price of raw materials from farmers went up, they have to build that into the cost of their products. Yes there will always be sale prices but I can assure you that any increase in raw material price we will be paying at the tills. They as businesses have money to make and it is as simple as that.
Yet, our industry has evolved over the years to be absolutely petrified of price. I don’t know what started it, but those weak breed of sales people who decided that selling on the lowest price possible instead of quality have caused almost permanent damage to the way our industry goes about it’s pricing. Because the customer now expects an unrealistically low price, any price increase, even if it’s small, looks massive.
Pre-recession this might not have been such a big issue. Leads are half in number what they were 6 years ago and sales were coming in left, right and centre. Lower margins didn’t matter because the volume of work was there to compensate. But now, with leads and sales a lot lower than previous years and the cost of living and transport much higher, prices must reflect this.
We have to look after our suppliers at the end of the day. They supply us with the products that keep us in business and we have to bear that in mind. Continuing to force suppliers to absorb cost increases will only serve to make trading harder and possibly leave installers in a tricky situation of their suppliers were forced to close their doors.