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I'm really struggling to get buyers to accept price rises in the industry I work in.
They keep asking me to justify why and insisting they need me to go to their head office in Ulan bator. Without giving them disclosure on our costs (which are our business and not theirs) its proving to be a complete b*stard.
I only want modest not opportunistic increases and I appear to be missing something (possibly ruthlessness). Is there ever a nice way of doing this?
If your prices rises are justified then show them your costs.
Try selling bike parts to the public....
If your prices rises are justified then show them your costs.
I guess you have a point but undeniably its a huge gamble. I suppose if we are uncompetitive then we lose the business simple so why tell them anything.
Just fed up of lack of straight talking. Buyers appear to be educated liars.
Bit OT, I remember when I was in my teens and occasionally bought Viz, after a price hike it had in bold on the front cover, "NEW PAY UP OR PISS OFF PRICE!".
I still bought it (even though it was probably shit)
Don't show them your costs, you'll then have to justify your existing mark-up (let alone an increased one).
We are having a 6% increase on our prices from Monday. We manufacture construction materials. TBH most customer have accepted it without any problems - most people seem to have realised that the cost for everything has risen over the past year or so, you only have to fill the car up to spot where the increases are coming from. Although saying that I am sure I will get a few calls next week asking me to keep the price as it was... We announced the increase a month or so ago, so gave everyone plenty of time to order goods if they needed them.
Well 6% is what I want and its like pulling teeth.
Thanks Jason. I feel a whole lot better already this weekend. I'm going to stick to it.
2% increase for May. Despite the economy being up poo creek sans paddle, we'll probably get away with it. Commodity prices are increasing QED. If push comes to shove, mention fuel prices, if there's a transport component you'll justify any increase.
I was a buyer once, the best increase was when the supplier said" take it or leave it, we don't need your business!" At the time it used to scare me, but in retrospect it was a lesson learnt.
6% is quite a small hike in construction at the moment. Material increases vary but steel is expected to rise by approx 20% this year, insulation materials currently rising 9% etc - mostly down to fuel costs which increase processing and transport charges.
Just blame it on the price of fuel.
For the sector of construction I am in (bricks) it is pretty much the going rate across the industry - maybe that is why I have had little negative feedback. We have had some hefty increases over the past few years due to gas prices.
Go to UB, talk to them, makes it easier for them to accept if they like you as a person.
Is it mining? I have a high level contact there who may be able to help.
Picked up a super lucrative Saudi job today...Totally suprised and amazed that some (Middle Easern people) have so much money.
I'm a self employed Handyman. They wanna pay me, i'll take it!!
Thats me in another thread.
Please people stop being a slave to your boss and take control.
There is big money to be made, just get out and find it.
Ain't no ressesion where the oil is.....
Never disclose your costs, some cunning buyers try to bottom up the price of goods. This means that they are aware of material costs, labour and manufacturing costs. I had tough negotiation with one client who tried this tactic. Ultimately i more or less said to them that the price we charge is a fair, laid down the prices they sold into the market place and challenged them on their profit margin, and merited the competitive edge we had technologically over the competition. Then left the room for them to talk amongst themselves. Plus, as with any business you need to know what your competitors are up too
Risky tactic granted, but i knew the cost to the customer to change to a new supplier would far greater than X% price increase.
So to summarise.
1 Dont disclose your costs (never ever ever)
2 Justify the reasons for price increase
3 Can you offer other services
4 Know your competition
5 Cost of change for the client, dont be shy to tell them either
Presumably the goods you sell require some transportation from point of manufacture through a supply chain to the point of sale ? If so then ask the thick c-u-next-tuesdays if they've seen the price of fuel recently.
There are other ways to skin a cat
Give the customer a % rebate if they hit a forecasted buying target, this must not be too far out of their reach, each month, quarter or annually rebate them. I guess you have a purchasing pattern, give the client the price increase, if they hit their forecast target rebate them.
Consolidate shipments, one shipment a week. This will also reduce your costs
Not had a problem, but then I continually impress my customers.
I sell a service, not a product though
If you give up the 6% increase how much impact will that be for your business? I mean earning 6% less.
Anywhere between 8 and 16%, commodities are all going up and they are all big brands so they just knock the prices up and leave us to deal with the fallout.
We have put through 30% increase in 12 months, halved our new bis, increased profits.
Some of my colleagues are in the process of trying to put through 40-47% price increases...
The product in itself was loss making previously but the loss was accepted as part of a package. Not any more....
I am a indirects buyer for a large food manufacturer, we are encouraged to get rebates with some suppliers and for this honour they get a preferred status and access to our 50+ sites so the opportunity to increase sales, we gain the rebate, reduce our suppliers base and work together on innovation or spend reduction on a formal contract
I have had 2 price increase requests this last week both are commodities that are shown on a market index price. so they just show the increase and we accept,granted only after a month so we can show some benefit from delaying the increase, on another commodity we have a clause where if price is going up we get hit in month 3 if price comes down month 1, the more formal you have the price increase mechanism the easier it is to get the increase
We do have open book contracts for some categories but these are for contracts worth £M+ and are for the our direct categories eg ingredients packaging etc etc
As you can imagine our customers are the supermarkets so try getting a price increase through them, we own one of the larger bread brands and they have delisted products instead of excepting the increases
Show factual information but not a complete breakdown of your costs, show copies of invoices for one part of your products you buy to show the difference over last 12/24 months what you haven't past on but in the end it will come down to either how much you need them or they need you, know your market and what the competitors are doing re price increases if known but I assume you know nether slag the competition, let the buyer do that!!
hope this helps in getting your increase.....
We live in the information age where folk expect to know or be able to find out anything. I'm not sure refusing to be more transparent with your costs is a viable long term strategy.