Our products deserve a proper price
The impulsive and fluctuating state of the fenestration market is causing many in the trade to suggest we are in for a prolonged period of indifference. With rising raw material prices along with soaring energy costs being mirrored by increasing wage demands, manufacturers have been left scratching their heads as to what lies ahead. Over the last two years the market has been in a buoyant mood, as consumer demand for windows, doors and glass extensions remained exceptionally high. We have gone through a period of raw material shortages, which has led to increased lead-times for all in the supply chain. A situation that could return with data from consultancy Windward showing around a fifth of the global container shipping fleet is currently stuck in congestion at global ports. However, there is a hope lessons have been learned from the pandemic that globalisation is not necessarily the answer to a smooth supply chain. Sourcing from more local markets is a strategy increasing numbers of manufacturers are pursuing as they look to firm up their supply chains.
The big issue now lies in the correct pricing of the products the industry sells to consumers. Historically windows and doors have been relatively low-cost home improvement items. Times are changing and there is a need to start pricing products correctly without the fear of losing the order. Fenestration products have progressively moved over the years to become an aspirational purchase – and in many cases the price does reflect this. There is no doubt the rise in the cost of living is having a negative impact on people’s ability to purchase high-priced ticket items. Home improvements do compete with holidays and new cars for a share of the UK public’s hard earned cash. We do however have a slight advantage during these current times. The products we sell offer a solution to some of the issues relating to the rise in the cost of living – especially energy costs. The messaging has been very clear from the government over the last year – we need to make our homes more energy efficient, and the best way to do this is to improve the insulation. A homeowner is not just buying windows and doors to make their house look better than their neighbours, they should be treating it as an investment to help make their homes warmer, to stop heat escaping and to reduce heating bills.
The big challenge is passing the increases in material costs down through the supply chain. An installer I talked to recently has taken an interesting approach. He found himself in a situation not too uncommon at the moment. The last 18 months have been good to him, however he was concerned about the next 18 months and was worried about his own margin being eroded. He had struggled to get extra fitters to cope with the extra workload which had seen rates rise over £100 for a window and £150 for a door. The fabricator he uses had put prices up by 30% since the start of the pandemic. Not wanting to just exist on tight margins he took the bold step of significantly rising his own prices on quotes. He basically held his nerve against a backdrop of a slight drop in enquiries. With a strong local reputation, he found that by even putting an extra £500-£1,500 on quotes he still was winning the jobs. The whole exercise resulted in slightly less work, but at a better margin and for a better type of customer whose projects were larger. Homeowners will always be tempted by the lowest quote, but we always need to remember if that was the only way to win business everyone would be driving around in a Dacia. The price pressures are just one of many issues that are coming down the road ahead. With more regulations enforcing themselves on our sector and the wider building community, we are moving towards a more regulated environment. Many believe we could follow the European model whereby anyone wishing to operate in any building-related sector needs to be fully licensed – but that is a discussion for another day!
John Cowie
Editor
E: john.cowie@windowsactive.co.uk
