Earlier on in the week, George Osbourne said that he was keeping an eye on all industries to make sure that price reductions created by the sharp drop in oil price were passed on to the consumer. That’s ALL industries. Not just supermarkets and fuel companies at the pumps.
Lower oil is having an affect on other products. Holidays and flights are cheaper than they were six months ago. The cost of tyres have come down too. Even polymers, the stuff that we need to make PVC to be turned into windows and doors, have come down quite a bit since oil started to drop. Click here to go to a website which shows the price drops in all sorts of polymers, the material crucial in the creation of PVC.
I understand that we pay higher prices from our suppliers because when polymer prices were higher, fixed term contracts were probably signed between fabricators and syscos at those higher prices. But there are polymer deals done all the time, and those deals being done now at lower prices should filter down the chain via fabricators then on to installers, reducing the amount we pay. Like everything else, I believe that if the price of something can go up, it can go down too, whether that be in the short or long term.
So, I want to know what you think. With polymer prices dropping quite significantly, should our industry pass these potentially large reductions down the chain? Should the companies at the top of the chain do nothing and retain those savings for extra profit margin, leaving installers to continue paying prices when oil was more than double it was now? Could a reduction in window and door prices actually be good PR in front of the homeowner?
To try and gauge opinion, I have created a little poll. It would be great if as many of you as possible took part in this, as it could help put pressure on the industry to ensure that any price reductions are passed on.
To clarify my position, I do believe that what we pay for our windows and doors should come down. Those savings made when polymers and other raw materials are bought should be passed down. Whether that is now, or further down the line when new supply contracts are agreed, pricing has to be fair at the bottom end of the chain to installers and ultimately, the homeowners. And you never know, with a little price drop here and there, it might stimulate our industry further and help to actually increase sales.
All comments on this are very welcome in the section below. It would be great to get some significant debate going on this.
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No I don’t think prices should fall. Should the installation costs fall too ? Fuel is now cheaper so why not ? No it shouldn’t . 2014 is possibly the first year for many in our industry that see a full year of growth, We have been on the back foot as an industry for many years. With the whole industry (maybe) now on the up the extra profit made can go to paying back that big overdraft.. Invest in new equipment maybe even give ourselves a much needed pay increase. So let’s not start on about price cutting.. Let’s… Read more »
OK, lets try another perspective ;-) I still think that syscos should look at their pricing to fabricators, and in turn fabricators to installers, should raw material costs drop significantly. However, I wouldn’t be against them retaining some of that extra cost for profit. In rough numbers, say raw material costs drop 10%. I think it would be entirely reasonable for a fabricator to retain say 5% for themselves as extra margin, and pass on the other few percent to their installers. It would be then up to the installer to decide if they keep that extra 5% as extra… Read more »
I agree, prices should remain at the realistic levels that they are right now! The stakeholders within the industry have been pressured for more than a decade to reduce prices. The fabricators, typically trade, have always complained that they cannot pass on any increases to their installer customers, as they will walk to the next supplier. Those were the every-man-for-himself days of the industry in my mind. As a consequence there was little investment in automation and even less in R&D from all quarters. Systems companies, raw material suppliers and hardware manufacturers have been used as banks to finance the… Read more »
Totally agree with BWF, been in the industry 30 years and the prices have fell enough. Perhaps a bit of profit for a change
Hi guys, thanks for your comment. I have replied to the first comment on this thread, take a look and see what you think :-)
If we all put out a big banner outside our outlets saying materials costs have dropped by 5% … How many new customers will be kicking the door down !
I actually want the price to our end clients to increase… But probably on my own with that idea ;-)
Bonuses like this should simply top up our much needed bank balances. Did prices go up as fuels costs did before? No! In fact a lot of people reduced prices to get people interested. As if the likes of Synseal are going to drop their prices us us fabricators in the short term, the only benefit we will see is fuel.
Fabricators are locked in a contract wit the extruders for 2 years, what will happen during this time?
I think one issue you have requesting a double glazing company to reduce its price is that over the last few years the raw cost of most materials has increased however many companies who manufacture and install (ours included) have held off passing this to the consumer to ensure that we are within the market place of quotations that a customer is receiving. Any further reduction would be undervaluing the product and expertise offered to the customer.
A touch bizarre DGB , how long did the previuos 7 comments take to rack up on every topic under the sun ?
This industry doesnt have much to say unless it hits us in the pocket ;)