We feel like we’re chasing our tail…
The impossible practice of annual price guarantees.
For over 70 years, The Worth Company has published an annual price list. We'd then live or die with whatever best estimates we had been able to view in our crystal ball for the future. More times than not, economic conditions would change during the following 12 months without much warning. As our economy experiences greater and greater fluctuations, our ability to predict them has decreased dramatically. As an example, this summer Worth announced that we would hold the line on all pricing for another year, only to then see a 25% increase in our cost of domestic steel one month later.
As our valued customers know from their own businesses, price adjustments are always a balance between providing value to our customers, and remaining profitable. Today, in a global economy, our ability to predict the changes in raw materials has become little more than a guessing game. Constantly changing tariffs, shifting demands and distribution channels, and the changing faces of our suppliers has made this process all but impossible.
To strike this balance between fair and competitive pricing, we feel the best practice is to pass on price adjustments when and as they are needed. This will eliminate our chances of overpricing or underpricing products for 12 month cycles. We will continue to publish current pricing on our website, and on our downloadable pdf catalog pages.
To help you, our valued customer, there are several practices you may wish to consider.
1. Purchase your components in sufficient quantity to adequately cover your seasonal requirements. Just like stocking up your freezer at home, there's no substitute for having everything you need at your fingertips at a fixed price.
2. Consider creating "blanket orders" with us. If you can give us a firm order for products you'll need shipped during the year, we can produce them at current prices, then hold them and ship as needed during the season. We can accept blanket orders to be shipped up to 6 months in advance.
3. Build a cushion into your own pricing. Predicting the future is a tricky business. Everybody is in the same boat. It's always a good business practice to build in a modest pricing cushion in case unforeseen expenses hit. 2-4 percent is a good rule of thumb.
4. Stay on top of global material changes. For example, if you see the price of copper or nickel is going up, that would be an excellent time to stock up on any components you purchase which are made of brass.
5. Be a proactive buyer. Don't wait to order something until after it runs out. Stay ahead of demand by purchasing items ahead of your requirements as early as possible in the production cycle.
6. "When in doubt… order out." Lure components don't have a shelf life, and carrying extra inventory into the next season usually pays for itself far beyond the carrying costs.
Setting prices is a complex process for everyone. "What are my competitors doing?". "What do I need to stay in business?'. "What is a fair price?". Here at The Worth Company, we are confident that market-driven pricing is the best and fairest solution in an ever-changing economy. Please let us know what else we can do to help make your business thrive.
As always you can rely on Worth for quality products, fast delivery and world class customer service. Any questions or comments, please contact us at 800-944-1899 or at email@example.com