Supplier upping his prices?

[columbo]

One part of my business involves having industrial components repaired.

I've been using a supplier for the 10 years who is quite simply excellent.

Great success rates for the most complex repairs. Extremely responsive - emails answered within 20 minutes. Phone calls always answered.

I really appreciate this quality level of service. However lately, he has been upping his prices by around 25% sometimes 35%.

What are my options here?

Do I be that awkward customer here that every supplier hates by questioning every job
OR
do I just raise my own prices?

 

[Deleted member 59730]

Increase your own prices.

 

[Mr D]

One part of my business involves having industrial components repaired.

I've been using a supplier for the 10 years who is quite simply excellent.

Great success rates for the most complex repairs. Extremely responsive - emails answered within 20 minutes. Phone calls always answered.

I really appreciate this quality level of service. However lately, he has been upping his prices by around 25% sometimes 35%.

What are my options here?

Do I be that awkward customer here that every supplier hates by questioning every job
OR
do I just raise my own prices?

Use a different supplier or pay the prices and increase your own to cover the extra cost.

 

[AstEver]

Learn about the reason behind the increases first.

 

[Awinner2]

As you have been totally satisfied for many years then this is a supplier to stick with. Build in the rises into your own prices but do ask them why the rises?

 

[cjd]

If you've been using them for 10 years you should have the kind of relationship with them that you can ask them why this sudden large change. I'm surprised actually that they haven't spoken to you about it first actually. But I suspect the answer won't help you much.

I really don't think messing them about being difficult will get you anywhere either.

If it was me, I'd be getting some prices from competitors and giving them a bit of work to see how they get on.

If there's not much in it as far as price goes, you stick with the supplier you trust and try to put your own prices up if you can.

 

[AstEver]

I'm surprised actually that they haven't spoken to you about it first actually. But I suspect the answer won't help you much.

This is exactly why you should speak to them and learn about the reasons. The supplier's substantial increase without having a conversation with you in advance indicates something wrong in the business relationship.

Are they going to increase the prices again in six months? And again next year?

In my opinion, you have to know exactly what is going on before raising your prices.

Are you going to inform your clients about the increase?

 

[Mr D]

This is exactly why you should speak to them and learn about the reasons. The supplier's substantial increase without having a conversation with you in advance indicates something wrong in the business relationship.

Are they going to increase the prices again in six months? And again next year?

In my opinion, you have to know exactly what is going on before raising your prices.

Are you going to inform your clients about the increase?

Do you by any chance inform your customers of reasons for raising prices? Do you inform them that your prices may go up again?

 

[AstEver]

In general terms, if it is a B2B client and I have a good business relationship with them that I want to maintain or develop, then yes, I do inform them.

 

[Mr D]

In general terms, if it is a B2B client and I have a good business relationship with them that I want to maintain or develop, then yes, I do inform them.

Great.
Unusual in my experience. Both in the businesses I've worked for and the businesses I've used as suppliers.

 

[AstEver]

I believe that such an approach is a characteristic known in business science as Competitive Supply Chain Network.
I remember that my first employer (a furniture distributor) did the same, so I would say that it is not my phantasmagoria

 

[Mitch3473]

You must be a pretty good business client of his and he is obviously busy due to the points you laid out. Sit down and have a chat, see if he'll negotiate a favourable deal/price ( assuming you are decent in return, pay your bills on time etc etc). No harm in asking and I think he will be more than happy to keep you on board. I've had this done to me and it makes good business sense otherwise he runs the risk of loosing you and I doubt after 10 years with you he'll want to find your replacement.

 

[AstEver]

It is also possible that the supplier's Key Account Management strategy tells them to 'fire' you as their client and the heavy price increases are the way to do it.

 

[Karimbo]

I presume the supplier gets his stuff from China/far east. Due to the fact that the pound has taken a battering I'm guessing he has no choice but to increase his prices.

 

[HFE Signs]

Talk to them and find out the reasons, see if you can negotiate a better price due to your long relationship, if not you have to increase your prices to maintain your margin.

 

[pentel]

We have had something similar with one of our suppliers a while back.

He had not changed his prices for 8 years and had realised that he was now making a loss. He did have a discussion with me about what had happened and increased hid prices by around 25%, which was still competitive. He remains a supplier 3 years later.

 

[Mr D]

**** me there is a lot of stupid on this site

You don't like the answers?
Give your own.

Don't mind people's experience.

 

[Flankaaa]

As HFE Signs noted, I also think that you should try to find out what is real reason for such price increases. I am a bit concerned if your supplier is not is some sort of problems. Anyway, you would need either to negotiate discounts or increase your prices in order to sustain your margins

 

[columbo]

Thanks guys for all those great responses...

I think his prices increases have just been the result of inflation...he has not raised them in years. I need to up my prices now and talk to him regarding any significant price changes.

Thanks.

 

[Millerd]

Establish a basis for pricing going forward so you are both have the same understanding and then there will be no surprises. Things like inflation and exchange rate changes should be easy to build into a model.