"Slow supply has exacerbated price increases, and price increases reflect turbulence."

DPH manufacturers focus on quality products and excellent customer service. We hope to provide it at a competitive price and with as little friction as possible, and I want to say that most of us do. However, just as we have witnessed the “Amazonization” of the market and amplified by the pandemic world, DPH manufacturers are striving to maintain stability between logical expectations and the “Amazon effect”. Although we all appreciate the convenience of the Amazon marketplace, not all products can be treated equally. Unlike some other industries, hardware, plumbing, electrical appliances, and lighting usually have specific transportation, installation, and service requirements.

Manufacturers are usually viewed simply as marketers and salespeople, but as you can see when you visit a factory, manufacturing is a multifaceted and complex business. Compared with finished products, manufacturers in the United States and around the world are more closely connected through raw materials, labor, and freight.

Raw materials: These are related to various industries such as petroleum and microchips. Most can and are purchasing domestically, but some must be purchased internationally. The flow of these products is subject to the unpredictable regulation of countries, politics and commerce around the world. In normal years, it is expected that prices will rise and apply when necessary. In the year of the outbreak of the new crown pneumonia epidemic, national and global supply slowdowns have exacerbated price increases, and price increases reflect turbulence.

Ben Alliker of HamatUSA explained: “2020 will be unfriendly to many areas of the construction industry, mainly due to increased demand and reduced supply. Both household appliances and wood are facing initial tightening, and the supply of household appliances is still in short supply and the delivery time is very long. For many DPH manufacturers, the situation is mixed. Kitchen products, unlike shower valves or new free-standing bathtub fillers, do not require extensive renovation projects. It is relatively easy to install new kitchen sinks and faucets into existing kitchens. Because of the world With large numbers of people staying at home everywhere and relatively easy installation, HamatUSA has seen a surge in demand for kitchen sinks and faucets during the summer and fall — both in the US and in foreign markets."

Production and inventory: For manufacturers, this can be handled in many ways. In other words, some manufacturers produce on order and produce on time with little inventory, while other manufacturers continue to produce and maintain large inventories. Both have pros and cons, but both require dexterous skills to balance output and demand, as well as costs and profits.

Freight: The costs associated with transportation have soared. The freight industry has been working hard throughout the pandemic to put itself at risk, but it is also aware of their undeniable necessity to buy the masses. Their accusations reflect their growing importance. "Fuel surcharges" are becoming more and more common. Most DPH manufacturers have decided to keep shipping rates as stable as possible, absorbing many increases and/or setting free shipping levels.

Return and replenishment: There is no simple solution to returns and replenishment, which has become a flash point. We know that things will happen. We all want to make these transactions as easy as possible. However, returns in our market segment are not as easy as logging in and printing a return label or simply scanning a QR code. Returns and replenishment are expensive for everyone and cannot be "solved" by simply increasing the price to try to speed up the process. Has the customer changed his mind? It happened. But faucets, toilets, steam appliances, drain pipes or bathtubs cannot simply be taped back into their packaging with Rambo tape and discarded. Return shipping, receiving and inspection, repair (if necessary), repackaging (if possible) and return to inventory are just some of the things that need to be done when returning the goods. But let's be honest. We all know that consumers want a new product, so reselling the product is difficult and unwelcome. What can I do with returns in our industry? How many methods are there to reduce, reuse, and recycle? Even if the problem has nothing to do with manufacturing, manufacturers often find it difficult to satisfy consumers.

"Absorbing the costs associated with returns is likely to lead to price increases," said Infinity Drain's Barbara Kratus. "At the end of the day, consumers will eventually pay for it, whether it is Prime delivery or a problem-free return-as they do now on Amazon or any other online retailer, it is already included in the price."

Harris Wattles of Amba Products added: "There are many reasons for setting restocking costs, and raising prices just to offset the reduction/cancellation of restocking costs will not solve the problem. Raising our prices for this reason will only make it harder for us. Competing with other brands, especially the low-cost companies you often see on Amazon, will further erode the company’s image and may also make our product pricing out of the market."

Labor costs: In manufacturing, these costs are more competitive than ever. Recruiting, hiring and retaining the best people in every position is not entirely difficult for a showroom or agency. Most of the work in DPH manufacturing is not on the assembly line, but requires trade training or artistic skills.

"Production facilities (during COVID) have less time/resources available for the production of new products. As a responsible supplier, we must initiate agreements to ensure the safety and health of the production team," Alliker explained. "This usually means that there are fewer people in the factory at a time, and the production schedule is different, thereby reducing production capacity. We have seen COVID-related delays in the supply chain of new components because they are also responding to the reality of COVID."

Service: This is another major component of successful manufacturing. When we encounter bad service, we all remember that good service is not always recognized, but it is worth looking forward to at all levels. Good service can be a simple smile or clear instructions on how to turn something on and off. A good service to consumers may slowly learn how to operate the controls, or if the same controls that work normally are not changed, a good service may become a bad service because the user does not like the way the controls are operated. Customers always have a fine line between correct and simple on-site solutions.

Labor costs: These are now competitive in the field. Skilled businessmen have never been as busy as they are now. Product support for warranty issues or installation checks is a key part of the overall product experience. Your warranty period can be 100 years, but if you can’t get professionals to the job site, then it’s worthless. We all rely on the professionalism and experience of the technicians we work with during the initial installation or follow-up service.

"I think products incorporating technology can inspire young people to enter this industry," Kratus said. "Building materials are incredibly innovative! We must promote this at all levels of the construction process."

Patrick Weidl of ThermaSol added: "ThermaSol, like many of us, relies on two industries-plumbers and electricians-to install products. Have their expectations changed? Yes, that's right. To meet these expectations, We introduced virtual training related to product knowledge, installation and general 101."

The network runs the world. It can be said lightly that the Internet has allowed us to experience a lot in the past year, and we have all learned to use it with new perspectives. It has become an indispensable part of our daily lives. You can order cars, boats, diamond necklaces, groceries, bird feed, towel bars or potty through your mobile phone.

But as we all know, the Internet is the 22nd news for everyone who sells products, any product, all over the world. Amazon and similar companies ruled the web before COVID, but now all companies have improved their online image, whether as a seller or just as a shop window to showcase their skills and products. Today, if your storefront is not well displayed on the Internet, then your physical store will not get the attention it deserves. We are all used to checking products or businesses online before going out. A web search can simply check which COVID protocol is used, or actually check whether the product you want is on display or read reviews for that product or business. 

There is no doubt that Web views and comments are an important part of future business. We have seen how reviews shape perceptions of products or companies, and how reviewers (paid and unpaid) influence moms and popular startups, large companies, and government agencies, to name a few. The whole world is paying attention to and reading everyone's views on the product, no matter if the content is true or valuable. They can literally accomplish or destroy business. So, we asked, should we raise the price to make it more like Amazon?

This is a challenging time for everyone, but the future of construction and renovation is bright and we are full of hope. ▪

Kimberly Frechette is the national sales manager for Americh Corporation. She has been engaged in manufacturing, distribution and sales in the sanitary field for 30 years. Frechette has participated in DPHA for 18 years and is a returning member of the board of directors.

This website requires you to log in or register to post comments.

Speak your opinion! This website requires you to log in or register to post comments. No comments have been added yet. Want to start a conversation?

© 2021 SOLA Group Inc. All rights reserved. V1.1 website managed by Fresh Design Studio

Need an account? register! Forgot your password?

Having trouble logging in? Contact our customer support team: 920-568-8343 or [email protection].

Already have an account? login.