Will Customers Tolerate Price Increases?

Christina Lewellen
April 25, 2012
THE TALK... | Management

In preparing for my moderator role at this week’s Fenestration Manufacturers Conference—taking place right now in Pensacola Beach, Fla.—I participated in several conference calls with organizers to polish up our agenda. One of the topics of discussion we explored was raw material price increases and whether or not the market can sustain increases rippling through the supply chain.

Several years back, we broached this same topic in a Talk and saw that, as an industry, we reached no consensus about whether charging customers more for product in the current environment was a wise move. Some respondents said that price increases are part of the game, and others showed concern that raising prices in a challenging economic environment would send customers packing.

Let’s circle around to the topic again and see whether we gain a different perspective about what’s happening with pricing in today’s market. With the glimmers of market momentum, are suppliers testing the water and passing along price increases based on higher raw material costs, or is it still too soon to inch up the price tag? Do you worry that your customers–whether they are manufacturers, dealers, builders, remodelers or homeowners–aren’t ready to absorb higher prices? Send me an email or post a comment to share what you’re seeing in the market.

 

Survey Results as of 05/01/2012 :

 

In the current market, charging customers more for product is...

...too risky. They'll look for another supplier.

  

 

66%

...a risk worth taking. Rising costs must be offset.

  

 

34%

The majority of respondents don't think now is the time. They may be right, but every company has to be prepared to raise prices at some point. It's necessary to make a profit and profits are necessary for long-term survival and success.

Richard Jones of Stanek Windows, an active member of the Window & Door Dealers Alliance, recently shared some thoughts on this topic for the Dealer's Perspective column scheduled for the May issue of Window & Door.  It's worth a look.

Contact Christina Lewellen, senior editor, at clewellen@glass.org.