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I would really like to see a similar chart as the one published on GlassBYTEs, but showing all of the announced price increases over the past two years or so. Then, show what the compounded total effects would be. I think it adds up to about 15.3% in all. Ouch! It would also be great to see in a chart just how closely all of the suppliers play follow-the-leader and use the exact same numbers. I know it doesn't technically qualify as price-fixing, but it sure does have the same effect!
First off, it of course is going to cut deeper into already slim profit margins. And overall I understand price increases are happening. I don't believe any shops would mind if we could raise our prises, but I think it's time to do just that. If only shops would send the same letter out to all tpa's and ins co's and effective blaa blaa date, and due to raising fuel and costs from all disrtibutors, we will be raising our fees by 5-10% (whatever it is to off set). I think if the rest of the distributors didn't follow suit, the first one to raise prices may fall back down. At least they are smart enough to stick together and keep value in thier product. JMHO
I have always said I would rather mark up a windshield that cost $100.00 by 25%(or whatever percent is needed) and make $25.00 than mark up a cost of $35.00 25% and only make 8.75.
The price increase is needed and I hope it doesn't erode away again.
As far as insurance and billing off of NAGS I watch each company and the average profit I make from them. I already refuse to bill a few of them anymore based on NAGS and more are probably going to be refused in the near future. When I factor in all the added expense I have to be "approved" for insurance work I am not to worried about losing the ones that require big discounts off of NAGS.
That has always been one of the "heres your sign" things about insurance companies saying they will pay a glass shops cost plus XX% on something. The glass shop is better off the find the most expensive place to make more dollars.
We looked at old invoices from upstairs from 1979 for windshields like the DW847, DW871, DW 872 ETC. Our cost for those windows had decreased from 1979 to 2004 by 42% on average and our selling price for them had declined by almost that much.
I have no problem with a price increase, this is a part of business. I want to see what NAGS and the Insurance industry is going to do! Insurance industry is the segement of business that prices off NAGS.
I'm intrigued by your response because I suspect it might be fuzzy thinking. Don't take offense. It is just contrary to my idea of running a business. I quote a section:
"I have always said I would rather mark up a windshield that cost $100.00 by 25%(or whatever percent is needed) and make $25.00 than mark up a cost of $35.00 25% and only make 8.75."
I have a few questions assuming that you have embraced the concept of margin coupled with either low-margin and high-volume or high-volume and low margin or even a combination of both.
Does your pricing structure take into effect competition? How many $35 items are you going to sell if you mark them up 30 or 40 percent?
Certainly, raising end prices to us would result in more dollars in our business pockets assuming that your arbitrary 25% markup was maintained.
The deeper implication, I think, within WEBMASTER's post is are we actually going to benefit in the long run?
Are the insurance companies going to increase their discount demands?
You state that "The price increase is needed and I hope it doesn't erode away again."
Fat chance it won't.
But, in the meanwhile, exactly how do YOU intend to pick up the slack because of "needed price increases" between OUR rising material and fuel and energy costs and the general four percent inflation rate?
(Incidentally, the government determines that bogus inflation rate. It's higher. Figures don't lie; liars figure.)
The fact is that independents are working harder to sell more jobs in order to stay even every year and it is a constant treadmill.
We will pass it on to our customers like we always do and hope for the best. If a company doesn't pass on the extra costs involved they most likely will not be in business very long. As far as insurance work goes we pick and choose the ones we want, like most agr shops now a days.