What’s going on out there? In the last four days, we have received 12 different notices of price increases.

This continues a trend. Since the start of the year, our showroom has experienced in excess of 100 price increases from every corner of the supply channel. The sheer volume creates two problems. One is to prepare accurate price quotes. The second major challenge is the ability to update our infrastructure and computer systems in a cost- or time-effective manner.

There are a number of factors contributing both to the volume and level of price increases. Jeff Robboy of Baci by Remcraft in Opa-Locka, FL, attributes price increases to a combination of recent spikes in material costs (copper, aluminum, stainless steel and brass) plus “anything related to petroleum – plastics, chemicals, lubricants and finishing materials. It’s the cost of transportation. It’s paper products for packaging. It’s the value of the dollar against foreign currencies. It’s the fact that if you don’t increase your employees’ salaries, they won’t be able to afford the gas to get to work. It’s the 20% to 30% increase we see every year for employee health insurance. It’s a combination of many factors that have been highlighted by 200% and 300% increases in the cost of raw materials.”

Robboy, whose firm manufactures high-end decorative mirrors and lighting, has been forced to pass on the higher cost of operations as a matter of survival, just like others in the decorative plumbing and hardware industry. “Manufacturers that do not take necessary price increases will, likely, not be around much longer. They’ll be out of business,” claims Caspar DeJong of Legacy Brass in Carson, CA.

EFFECTIVE PRICE QUOTING

The fact that pricing is changing almost daily requires showrooms to develop an effective communications strategy to maintain favorable customer relations. Vicki Findley of Miller’s Fine Decorative Hardware in Juniper, FL, comments, “The influx of price increases prompted me to talk to contractors outside of the decorative plumbing and hardware industry to determine how they are responding. One contractor indicated he was receiving quotes with stamps across the top indicating ‘pricing good for 5-10 days.’ Another strategy is to sign off on a selection or specification rather than agreeing to a price quote with the contingency that the price of the product is the current price at the time the product is delivered.”

Tony Carter of Carter Hardware in Beverly Hills, CA, relates, “We are experiencing the same problems as everyone else. We quote a price and before the customer has even placed the order, prices have increased, sometimes twice in less than six months. Our quotes have always stated the prices are good until the manufacturer’s increase. We are now quoting prices and stating on the quotes that prices are determined by what is current at the time the customer takes delivery.”

Carter adds, “It is not sufficient to simply make a statement on a price quote; we explain to the customer what the statement means. That way the customer is prepared in this environment of frequently rising prices. If the customer waits to take a product, that person is the one that risk a price increase. We also make the client aware of the need to inspect all items purchased, especially if the customer is hedging against future price increases by purchasing now.”

Most showrooms place limits on the time frame of proposals. In many cases, manufacturers will honor a price quote provided by a dealer even if prices rise. However, the volatility of pricing has placed a premium on effective communication with clients and manufacturers.

The other challenge of voluminous price increases is the ability of showrooms to update display prices and prices in computer systems. Some cannot.

“It’s a travesty,” reports Stuart Stern of S&H Hardware of New Jersey in Cherry Hill, NJ. “We have not been able to keep pace with the number of changes that have occurred. As a result, we are now relying on price books.”