All I can say is WOW because this is not something we have seen before and kind of changes things big time. If ever a company doing purchases was going to be price conscious it is now and opens up an incredible opportunity for those not profiteering on the higher end of the scale. This is going to be a 60% minimum increase because the majority of packaging manufacturers will round this off by adding an extra 7% profit which is what they tend to do.
A letter we sent out yesterday informing our clients of the imminent bad news which many of them already knew. We have kept everyone in the loop for the last 2 weeks warning them of what is expected. The price we guesstimated was a 30-50% increase so this is more than we predicted. Everything is going up whether we like it or not. The conflict in the Middle East is going to hit home hard next month due to oil prices being directly impacted so we need to brace ourselves.
This is good and bad news because no one wins from this due to everyone paying more for the same item and quite a bit more at that. The good news is some of the clients I have been courting over the last few months to get them on board are finally waking up. Our new prices are in some cases still below what they were paying previously so in an around about way they will still be saving with the new pricing. Madness I know, but one way for me to kick the doors down and cement ourselves as their supplier.
In business things can change very quickly and luckily I have my new batch of business cards ready to collect this afternoon. This is going to be a busy next few weeks and do expect to land the 6 clients I have been working on. The first was already quoted this morning and we are trying to still give them old stock prices even though there is no way we can manufacture their order by the 1st April. Being a new customer there is no obligation to give them the old stock price and one should be looking after your regular clients. We do want to grow though so let us see what can be done.
What normally happens over these crazy times of any price increase is we will receive many enquiries which is actually quite pleasant. This time this is not a normal type of increase so there should be plenty of follow up leads which will keep us all very busy for the weeks that follow. I am actually positively looking forward to this as I know our pricing will in many cases still be cheaper than what customers were already paying before the new price increase. We have no middleman and this is our advantage which should give us the edge.
Who knows if this is the first of many increases as this surely will not be the last and todays prices may see very cheap in 6 months time. We are fortunate as we have multiple raw material suppliers and do not rely on SASOL which is a refinery and chemical giant. SASOL used to be an SOE back in the apartheid days and now the government only has a small share holding.
