Is increase in product and raw material cost bothering you much?
With the increase in cost of raw material, labor and freight the cost of product has increased and has affected the LED Lighting market and its customers adversely.
The back log situation on the major ports caused the delay in shipments and increase in the freight cost globally.
Challenges you are facing:
Price difference: It has become difficult to stick to the current prices already committed to the customer while finalizing the project order with an increase in price quoted to you by your existing vendors.
Increase in lead time: Due to the heavy congestion on the shipping ports and unavailability of the vehicle for transporting the goods, it has become difficult to deliver your orders in time and has increased the fear of losing your projects and orders from your existing customers.
What is the solution to this problem?
There is always a way to keep yourself calm and your business unaffected with these bigger challenges by facing them with smartness. Below are the few points which will help you in handling this situation in an effective way.
- Planning: With your current market scenario of increase in demands for LED lighting products you can forecast for upcoming projects and can freeze the order with your vendor/ manufacturer on the mutually agreed price with some initial advance payment to book your order and to avoid the raise in product cost with raise in raw material cost.
- Organized way of working: The gist of the word ‘Organized’ is self-explanatory and it always works. Keeping the documents of agreed quotes and shipping terms will help in dealing with the suppliers and freight forwarders smoothly and in bringing hassle free shipment on time.
- Playing smartly: Sometimes there may be a situation wherein the project demand large quantities with organized delivery schedules throughout the year. In that case it is better to give a blanket order with same delivery schedules in advance to your suppliers so that they can retain the price of the product cost for you for that year and later both of you can enjoy the mutual success by defeating the price rise of that time.
- Tying up with your freight forwarders: To reduce the impact of freight escalation added to your landed cost or door to door delivery, tying up with shipping companies and freight forwarders will lighten the burden on your pocket for delivering the goods on time and maintain your rapport in the market.
- Govt. Exemptions/Schemes: It is important to be updated of all the related exemptions or schemes run by your local bodies or government so as to avail the maximum benefits out of it and adding little more cents to your profit account.
- Insurance: Though insurance will add an additional cost to you but it is one of the most important things to be done in advance just in case of emergency or any uncertainty to keep yourself safe.
Hope this blog will help you to think of the problem areas related to the rise in the prices which affects your business dealings and to help you in finding their solutions by simply controlling and measuring your actions along with the vendors/suppliers to achieve your target price and attaining your goals.