I recently wrote about how increases in the cost of raw materials are driving up prices of products that we all use in the shop. I spoke at length about titanium dioxide, the white pigment used not only in paint but in all sorts of other applications. The price of TW has risen sharply this year as have resins and nitro cellulose.
This week I happened to have a few minutes of time with one of the representatives of one of our other vendors. He was talking about how solid surface is made and what products go into the manufacture of it. In addition to the different resins that are blended together, there is a very common mineral called alumina trihydrate that is blended into the mix. ATH, for short, is used as a fire retardant in polymers. It also serves cosmetically by imparting color.
I couldn’t help myself. I had to ask if his company had experienced price increases in raw materials. Globally, there are 100 million tons of ATH produced each year. That’s a very big pile of fine, white powder! Yet, the price of ATH has tripled this year. Those who deal in solid surface are just like the rest of us and are seeing price increases being passed on. That pile of white powder is now worth a lot more than it was on January 1!
This week I also listened to a cabinetmaker lamenting that although the prices of hinges, drawer slides, and lacquers were rising, he wasn’t being allowed to raise his prices. Hmmm, I had to think about that one for a moment. But when I did, I had to really think that his statement couldn’t be totally true. Here’s why:
“Back in the day” when I had my shop and I bid projects, I was always aware of the price of a hinge and the cost of a drawer guide, the cost of maple as opposed to cherry, and the cost of a simple clear coat finish as opposed to a stain, glaze, and clear coat. Then, to make a bid, I would pencil in all of that plus add in labor, overhead, and profit, multiply that by whatever factor I used to keep Mr. Murphy and his laws at bay and I got the bottom line of my bid. Then, adjustments were made.
Don’t get me wrong. I’m not saying that adjustments meant that I had to earn less per hour to compensate for materials going up. We all would have been working for free a long time ago if that were true! Neither am I suggesting reducing profit and overhead charges. We all know that you can’t build the exact same kitchen for the exact same price year after year. That kitchen price has to be reflective of reality.
I am saying that you need to be realistic both with yourself and with your clients. Raw materials costs go up every day and we all have to deal with that because we have no control over that reality. We deal with it as pencil on paper when we make up our bids. We deal with it in how we deal with our clients, what we say to them, and how we explain why their project is going to cost X instead of Y. And yes, there will always be someone who will do it for less. But sooner or later they have to raise their prices too!
Until next time…spray on!
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