Petrol Price Rise And Other Hyper Inflation

[soundman]

Just want to get a feel from other people who run or work in SME sized businesses as to whether you are re-pricing your products with the significant cost increases that are occuring on almost daily basis.

Almost every cost in my business has increased since the start of the year.

On top of this customers are pushing harder for discounts and longer credit terms than at any period I can remember in the last five years.

I have put my prices up accordingly, cut credit terms due to un-certainty in actually getting paid & on balance it is very hard to make sales at the moment.

Thoughts please.

Soundman.

[barrella]

Just want to get a feel from other people who run or work in SME sized businesses as to whether you are re-pricing your products with the significant cost increases that are occuring on almost daily basis.

Almost every cost in my business has increased since the start of the year.

On top of this customers are pushing harder for discounts and longer credit terms than at any period I can remember in the last five years.

I have put my prices up accordingly, cut credit terms due to un-certainty in actually getting paid & on balance it is very hard to make sales at the moment.

Thoughts please.

Soundman.

My prices are static at present in my businesses (for some strange reason) but my wifes running costs in her companies have gone up sharply in some areas so she has increased her prices accordingly.

It's going to be a strange few years ahead.

[Smithson]

On top of this customers are pushing harder for discounts and longer credit terms than at any period I can remember in the last five years.

Soundman.

Even worse if your exporting, I've just switched to making all pricelists in Baht instead of $ and GBP, but there's no increase. This way customers can understand how the exchange rate affects prices, rather than just seeing continual increases. I'm also focusing on more local sales.

It's interesting times for exporters, squeezed at both ends. Our mark up was fairly decent and we're not buying new machinery etc. so it's we should survive.

[barrella]

On top of this customers are pushing harder for discounts and longer credit terms than at any period I can remember in the last five years.

Soundman.

Even worse if your exporting, I've just switched to making all pricelists in Baht instead of $ and GBP, but there's no increase. This way customers can understand how the exchange rate affects prices, rather than just seeing continual increases. I'm also focusing on more local sales.

It's interesting times for exporters, squeezed at both ends. Our mark up was fairly decent and we're not buying new machinery etc. so it's we should survive.

For exporters/trading companies out of Thailand yes for sure you are being squeezed every way you could be at the moment.

Maybe if the margins are to low offer value adds at a cost and push sales on the value ads not your big box.

As long as your sales end is good this should work for the while and if the TB moves away from its manipulated position it is in at present you can revert back to your original stance.

Good luck

[Heng]

Definitely. What are you going to do? Buy orchids from Hawaii?

Seriously though my customers have typically been able to pass the Baht on to the retail customer in the same way I've passed it on to them. One of those product niches where price increases (to a certain extent, surely) add to the exotic value of the product.

[raro]

Being a freight forwarder I get a lot of complaints from customers lately as the fuel surcharges on both, air- and seafreight are skyrocketing. Also local trucking rates are up.

We get nothing out of those surcharges, they are billed through 1:1 and are the same for all airlines (resp. shipping lines). In fact, seafreight is charged in USD and the profits are down due to the exchange rate. Higher freight rates because of lower Baht income are difficult to negotiate.

Edited May 2, 2008 by raro

[Cuban]

Agreed, now we are in May we might normally discount much harder than we are currently doing - so that is where we are making up the increased running costs. But in any business getting the sales/cost ratio perfect is a task of management - we are looking at cost efficiencies - not cuts unless there is waste but ensuring we are getting the best value we can.

We increased wages last year and have not had any requests from the staff in this regard - they are already on good salaries compared to other companies within the local area/profession.