|Welcome to pricing hell….or 2021 as they call it.
|Small businesses all over the world struggled through 2020. We spent the year working from home, home schooling our children, staying safe, learning new hobbies, making soaps and candles and bath bombs- whatever it took to pass the time and not lose our minds. All with the promise that 2021 would be ushered in along with new possibilities and life somewhat back to “normal”. 2021, for businesses, is proving to be extremely costly.
Shay and Company has been in business since 1996 and we have always strived to deliver the highest quality products at the best possible prices. That is still our goal; and it is something that is becoming so very difficult to keep doing. The prices of raw materials have skyrocketed this year and the hits just keep on coming.
As a smallish business, we are well aware of our competitors out there. Some have much larger purchasing capabilities and volume always gets better pricing. Some, and some of these are the same, are selling the product for less than the manufacturer sells it. For one reason or another they just haven’t had to raise the prices to current market prices. As your NW vendor of choice I am aware of my responsibilities to work for the best possible pricing at all times. I (Susan) feel the pain of increasing material costs, and increasing fuel/shipping costs. I hate raising prices.
Having said that, I am forced to do it and I know how much it affects each of you. We have received notifications from every single manufacturer that prices are going up. Some have gone up a few cents per pound, some have almost doubled. Just as you cannot absorb drastic price increases, we also cannot, so you will see increased prices on almost all our products. The only price increases you see are direct pass-through increases from our manufacturers. Shay and Company is not doing an increase on our margins, as we know how difficult this year will be for small businesses.
Some general price increases:
All fuel costs have gone up about 34%, as we can all see at the gas station. This doesn’t just cause an increase in UPS costs, but also in product costs as it costs more to get the raw material in.
Soy oil prices, which directly affects candle wax, has gone up across the board. Candle waxes have gone up $0.25 per pound for Nature Wax and $0.50 per pound for Golden Wax. This is just the manufacturer’s price increases; that doesn’t include any additional costs in transportation. Soy oil is nearly impossible to find, along with canola, and most manufacturers have sold all their production for this entire year already.
Coconut oil has nearly doubled and is just projected to keep going up all summer long. This not only affects the price of regular coconut oil, but also coconut candle waxes.
Plastics and glass, forget about it. When you can get candle glass in stock, the prices are up at least 35%. Plastics are the same. Our 5-gallon buckets have gone up over $4 each between the bucket and the lid.
|I know none of this is new to you. I have heard the questions from customers and I know how hard it is to deal with all these increases. I know you have other options. I will tell you that the team here at Shay and Company appreciates your support of local businesses. We know you could order elsewhere, and that you chose to order with us. We will continue to offer speedy order fulfillment, responsive customer service, the highest quality products, and the best possible pricing. We appreciate you.
Here is some information out there about these price increases:
For anyone concerned about global food inflation, all eyes are currently on an unlikely corner of the agriculture markets: vegetable oils.
While price gains for meat and dairy have been grabbing attention, futures for products like soybean oil and palm oil have also seen big recent gains. Palm prices are up close to 10% this year, and soy oil soared about 30%.
There are several factors driving the gains. In Brazil, the world’s biggest soy grower, adverse weather raised concerns over yields. There’s also been signs of tight inventories for both commodities. Meanwhile, demand from major importers like China is on the rise.
On top of food demand, the oils are also used to make biodiesel. Prospects for a renewed push by the Biden’s administration for alternative fuels also helped drive the buying frenzy.
The situation is sparking fear among some analysts over a global shortage of supplies. If prices keep rising, it’s likely to mean accelerated inflation for consumers at a time when food insecurity is already on the rise.
But there might be some signs of relief. After surging to a 13-year high earlier this month, palm oil has started to ease. And soy oil has also taken a pause from its rally.
More supplies could arrive in palm regions by next month. Meanwhile, Argentina, the top global soy oil producer, will soon harvest a new soy crop just as farmers in North America begin the spring planting season.
“Supplies of oil are starting to come back into the world market,” said Don Roose, president of Iowa-based brokerage U.S. Commodities. “Things have changed just a little bit.”
—Michael Hirtzer in Chicago
A link: Why Soy Oil Will Remain High