Material Price increases and your short term strategy

[Pane Talev]

Bulk buying and negotiating a slightly better deal to soften the blow.

Shop around for the cheapest deal, hoping suppliers play ball.

… blaming suppliers of profiteering.

[David Hammond]

As you know from your recent visits Graham, we’ve really narrowed concentrated on specific markets.

Bulk buying is great if you’ve a ready, regular influx of work. It’s like sales in shops, it’s only a bargain if you need it. You can’t pay wages, rent and bills with sheets of foamex.

Also consider you’re paying rent on the space to store it, and the risk of damage.

Everything has gone up, not just our suppliers, but groceries, fuel, gas, electric. Inflation is increasing, so prices do.

I don’t think suppliers are profiteering. Raw material costs will have increased, but they also need to account for increases in all of the overheads. Smaller businesses should be increasing prices beyond the increases put onto them to put more money in the owners pocket to offset the increase in their personal expenses.

Alas, too many small businesses, operate more as job, just looking to take a wage, with no forethought or planning. Lockdown was a perfect opportunity to take stock, and plan ahead for the aftermath we’re now experiencing.

We’ve been putting prices up since lockdown was eased, if people don’t want to pay the price quoted, they’re welcome to go elsewhere. There’s no shortage of people working for next to nothing who’ll do it – But there’s also customers who aren’t looking solely at price. The trouble being it’s not an immediate transition, it’s taken us 12months to get where we are now, and are about push harder still to get where I want to be.

[Phill Fenton]

We are entering a period of inflation. It’s inevitable and a direct result of the governments approach to the covid 19 situation. Printing more money is bound to increase inflation. Prices are never going to come back down. So inevitably, we all need to be putting our prices up. I recently increased my prices by 5% across the board

[RobertLambie]

Good topic to raise Graham…

I started really screwing down on our spending around November last year. Just using up everything and anything we have had on our shelves for a while, some things years!
This was more about clearing out, sharpening our processes and monitoring our materials better. Fast forward till now and it’s been a bit of an eye-opener on our waste, the crap we hold for no good reason, the cost of the waste we dispose of and more.

One thing I haven’t done for a number of years is scrutinising what we stock and why? because most products are delivered the next day! (that’s arguable at the moment for sure)
I think we also get very comfortable with who we buy from and tend not to focus on the price, more on the “product” and service, at least I do… by that I mean, I do not mind paying a bit more for a good product on my doorstep the next day without fail, excuses, mixups and more. but “everything” is climbing up in price and as has been said, it is not coming back down anytime soon. If at all!

I am in a fortunate position to speak with suppliers and manufacturers. So I don’t really see suppliers as profiteering. There is a list of reasons their prices are going up and they, like us, struggle to break the news to “us lot”, that there is yet another price increase.
We can adjust our prices and hope our customers swallow it. but my concern is looming stock shortages. I know of vinyl manufacturers stopping the production of certain lines of products due to growing shortages of whatever, around the world. You only have to look at the escalating shipping container costs and the times to get here, to see what’s hiding around the corner and about to bite our arses!
I am not for a minute saying this is the case for all suppliers and products. but it is happening now and my concern is where the ripple effect will have us in 6-12 months time?
It is one thing paying 30% more, it is another having to wait weeks for it, if at all!?

Obviously, if finances allow, but I would suggest slightly increasing your purchases of core products you cannot do without. even if it’s just a roll of digital and laminate here and there. leave it in the box in storage and carry on as normal. in a few months time this will steadily add up and if any shortages or delays do happen, you have something to fall back on and keep you operational for a few weeks or more!
if things level out and normality does somehow come back, you simply use the surplus stock and you get a window of no buying.
doing it now means you know what you are paying! in a month or so there could be another 10% on top.

[Graham Scanlan]

Well said David and Rob, the first step is accepting that we are all in the same boat, we all have our regular customers who we don’t want to let down, so bulk stocking on the products that keep your business alive. If at this stage your relying on the just in time principle you may run into problems regardless of how many suppliers you ring especially if your a new customer to them. No point in a supplier waiting 12 weeks for a delivery only to sell it cheap to customers they have never dealt with. We all look after our regular customers. Like Rob said turn yourself into a lean mean fighting machine, analyse your usage on essential stock and plan as far forward as you can for the business you have. Eventually I’m positive we will get back to normal eventually

[David Hammond]

God help us if Labour are elected and minimum wage increases to £15 🙏

[Paul Hodges]

If that did happen there would suddenly be a lot of people out of a job!

[David Hammond]

Cost of everything will go up, to cover the cost of the increased wage bill.

Skilled workers will demand more, to keep the gap, or choose to ditch skilled work for unskilled work.

All the while HMRC will be skimming more tax through PAYE – Yet it sounds good doesn’t it and people will vote for it🤯