We understand that it is very important to our resellers that they can offer good value hoses and accessories to their customers. Our long-standing supplier relationships, large warehousing capacity and market knowledge allow us to secure and share the best possible prices for our hoses and accessories whilst maintaining good levels of stock availability. In recent years this has been tested to the limit by external changes outside our control. In this blog post, we explore in more detail what those factors are and how they impact prices across our product range.
Raw materials
Our products are made from a variety of raw materials which are subject to changes in the respective commodity prices, influenced by global supply and demand. In times of economic uncertainty, commodity prices can be more volatile which inevitably filters through to the final cost of the hose or accessory. In this decade we have seen events such as the Covid pandemic and conflict in the Middle East and Ukraine create unusually high swings in the price of raw materials.
Manufacturing capacity
Our suppliers face their own challenges and adjust their manufacturing plans to optimise their business performance. In the face of reduced demand, high raw material prices or increased energy costs, they may choose to limit their output which makes it harder for us to get the quantity of goods we need at a good price.
Logistics
Many of our products are sourced overseas. In recent years we have seen a shortage of shipping capacity during the pandemic and then extended shipping times due to the instability in the Middle East and risks associated with using the Red Sea. This means we need to place orders and make payments earlier to meet our resellers requirements.
Exchange rates
All our overseas sourced products are purchased in US dollars, as are our shipping costs. Fluctuations in the dollar to sterling exchange rate can have a significant impact on the cost of these products. The chart below shows how the rate has changed in the last 12 months. The 9% difference between the high and low points occurred in just four months, and translated directly into the effective price we pay for our products and transportation.
Transportation costs
As indicated above, shipping goods to the UK can be affected by a number of factors and these in turn drive changes in shipping costs. During Covid, we saw an increase in shipping container prices of over 500% compared to early 2020, as mentioned in our previous blog post and after falling in 2023, prices have risen again in the last 12-18 months.
Staffing
Like all UK businesses, the above inflation increases in the National Minimum Wage and the knock on-impacts on other wage rates, plus the recent change to the National Insurance employer contribution and thresholds has had a significant impact on our overall labour costs.
Energy
The cost of heating and lighting our offices and warehouse is subject to the changes in UK energy prices, which grew significantly following the outbreak of war in the Ukraine in 2022. We have introduced more energy-saving initiatives to reduce the impact of the price rises.
As a responsible supplier, committed to supporting our reseller customers, we will always endeavour to minimise and absorb cost increases. Through the turbulence of the last five years, we are pleased that we have been able to minimise the frequency of price changes to our customers and we are determined to continue to offer the maximum possible price stability to our customers in the future.
If you would like to talk about how our approach to hose and accessory pricing might benefit your business, call us today on 01902 606010, email sales@winster-hose.co.uk or use the contact form on our website.