Prices Drifted Up in 2010

Wed, 10 Mar 2010 13:06:00 GMT

In my last post I went through my decision-making process for keeping Advanced Metal Products prices unchanged in 2010. I also mentioned that some raw material prices are moving up.

Specifically, we’re seeing increases, albeit uneven, in both ferrous and non-ferrous metals. Aluminum is up significantly over last year. Cold rolled carbon steel is only up 5% year-to-year but that’s almost a 25% jump from its May 2009 low. Stainless Steel pricing, which saw a big decline in 2008/2009, has stabilized and appears to be on the rise.

I’m not a commodities trader. Like all of us at Advanced Metal Products, I’m a metal fabricator. But it really doesn’t take a genius to see that distributor inventories are low and demand is beginning to pick up thanks to China and the government stimulus package, which boosted production of automobiles, household appliances and some electronics. So my guess is prices will continue to increase for the rest of the year and probably into 2011.

That’s my take on the situation. Feel free to leave me a comment and let me know if you agree or disagree.

Frank
704-392-1011

Pricing is Never Easy

Sun, 28 Feb 2010 16:09:00 GMT

Pricing is never an easy decision. Large companies believe they have an advantage because they see price movements across the country and pay close attention to economic forecasts. They use data to drive their pricing decisions.

Small businesses often cite their lack of good data for poor pricing decisions, for guessing. That’s a mistake because the fact is we, small business owners, have the advantage.

As an owner of Advanced Metal Products I have a personal relationship with almost all of my customers. I talk to them on a fairly regular basis whether we’re working on a project or not.

A “How’s it going?” call from me is not a red-flag to my customers that I’m prying or being a pushy-salesman. A call from me is a regular occurrence and a courtesy, if that’s the right word, they’ve come to expect.

After talking to my customers we’ve decided to keep our 2009 labor rates throughout 2010, barring something unforeseen such as high inflation. That means that, despite some increases in raw materials, our pricing structure has not changed since the beginning of 2008.

It’s simple really, I’ve known some of my customers for decades and I trust them to tell me what’s happening with their business. They know that while the friction between buyer and seller never goes away entirely, we're much better off cooperating with one another than we are treating each other as adversaries.

Frank
704-392-1011

Frank's Blog

Prices Drifted Up in 2010

Pricing is Never Easy