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Holy Cow!

 
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Old 12-16-2012, 01:05 PM   #1
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Holy Cow!


I just received an email from my wholesaler letting me know we will have an 18% price increase on PVC. Charlotte & Nibco both citing healthcare costs and new federal regulations.

This is my largest increase so far this year. It's mindblowing really.

I know there's not many plumbing contractors on here but watch your costs and lock in bids with wholesalers.
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Old 12-16-2012, 01:27 PM   #2
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Re: Holy Cow!


I seem to remember a rep at Menards telling me sheetrock was going up 30%. But that can't be correct.

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Old 12-16-2012, 01:30 PM   #3
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Re: Holy Cow!


I think that's actually true. A contractor I work with told me Friday he is locking in bids and he mentioned the same 30% on drywall.
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Old 12-16-2012, 01:32 PM   #4
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Re: Holy Cow!


Any change on ABS?
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Old 12-16-2012, 01:35 PM   #5
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Re: Holy Cow!


Dang, and I thought healthcare was going to be free.
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Old 12-16-2012, 01:59 PM   #6
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Re: Holy Cow!


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Any change on ABS?
I don't know but I can ask my rep.
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Old 12-16-2012, 02:05 PM   #7
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Re: Holy Cow!


Good thing that the top 2% are planning big plumbing and drywall projects this year.
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Old 12-16-2012, 04:51 PM   #8
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Re: Holy Cow!


I really can't imagine how a 30% price increase would work.

Wouldn't all the distributors fill their warehouses to the ceiling before the price increase, and maybe a line of rail cars as well?

So no one would re-order until April. By then, the factories would have closed, so there would be no product to supply for a while and the price could increase.

Now it is starting to make sense.
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Old 12-16-2012, 04:57 PM   #9
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Re: Holy Cow!


We saw a similar price increase on drywall at the beginning of the year. We are being warned by suppliers that we will see another 20-30% increase when the calendar changes. Construction never gets cheaper.
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Old 12-16-2012, 05:14 PM   #10
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Old 12-16-2012, 05:21 PM   #11
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Re: Holy Cow!


Sweet, and I was just getting used to having steady work and eating every day.
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Old 12-16-2012, 05:31 PM   #12
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Re: Holy Cow!


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Originally Posted by cleveman View Post
I really can't imagine how a 30% price increase would work.

Wouldn't all the distributors fill their warehouses to the ceiling before the price increase, and maybe a line of rail cars as well?
I have never seen an acoustical supply house that has it's own rail spur.
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Old 12-16-2012, 07:07 PM   #13
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Re: Holy Cow!


Equating an 18% or 30% increase in price to healthcare costs is a crock O poo.

The affordable car act does not increase costs to employers that substantially, the owner of PapaJohn's pizza stated it amounts to an increase of $0.14 per pizza. - less than 1% of the price.

..and he was using that to complain about the cost increase.

We're a demography that doesn't question price so much, we pass it on to our customers, MFG's and suppliers know this.
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Old 12-16-2012, 07:13 PM   #14
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Re: Holy Cow!


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Originally Posted by cleveman View Post
Wouldn't all the distributors fill their warehouses to the ceiling before the price increase, and maybe a line of rail cars as well?.
MFG's and large suppliers do this by buying materials futures in the stock market, the same way airlines do it with oil futures to secure lower oil prices.

I do it as well, made a boatload in 2010 on copper, while still marking up the costs to my clients, because my competitors don't do it and are forced to price at market.
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Old 12-16-2012, 08:11 PM   #15
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Re: Holy Cow!


Grumpy, no offense but that's just false.

Anybody who has deal with suppliers knows they don't stock or inventory anything anymore. Everything is based on JIT (just in time inventory).

Futures are totally and completely different than being a supplier and the numbers NEVER reflect a prices increase or decrease. Futures are an investment tool meant to hedge. They could buy natural gas futures that's about it, and even that wouldn't pay for a supplier.

You can't buy fitting futures or bathtub futures or toilet futures. Lol. They are in the business of buying product and reselling it.

Regardless of anything prices will go up January 1st for just about every product made, that is a fact. If you are bidding and are not aware of this you will take the hit and that is the point of my post.

As far as Papa Johns? How much per pizza is irrelevant to anything I'm discussing. Healthcare isn't free and it won't be the companies that pay for it, it will be the consumer and that is why they sent an email. The email basically says "Hey guys, here's the bill for the new costs"
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Old 12-16-2012, 09:07 PM   #16
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Re: Holy Cow!


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Originally Posted by Oconomowoc View Post
Grumpy, no offense but that's just false.

Anybody who has deal with suppliers knows they don't stock or inventory anything anymore. Everything is based on JIT (just in time inventory).

Futures are totally and completely different than being a supplier and the numbers NEVER reflect a prices increase or decrease. Futures are an investment tool meant to hedge. They could buy natural gas futures that's about it, and even that wouldn't pay for a supplier.

You can't buy fitting futures or bathtub futures or toilet futures. Lol. They are in the business of buying product and reselling it.

Regardless of anything prices will go up January 1st for just about every product made, that is a fact. If you are bidding and are not aware of this you will take the hit and that is the point of my post.

As far as Papa Johns? How much per pizza is irrelevant to anything I'm discussing. Healthcare isn't free and it won't be the companies that pay for it, it will be the consumer and that is why they sent an email. The email basically says "Hey guys, here's the bill for the new costs"
I don't know specifically about plumbing fixtures, but there are certainly material and commodity futures. Lumber futures are a huge market for suppliers at the national level. Take a look at a publication called "Random Lengths". All about lumber futures and their impact on the market.
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Old 12-16-2012, 09:20 PM   #17
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Re: Holy Cow!


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Originally Posted by Oconomowoc View Post
Grumpy, no offense but that's just false. ....

...You can't buy fitting futures or bathtub futures or toilet futures. Lol. They are in the business of buying product and reselling it. ....
No offense taken, specifically where you're wrong..and before you try to double down... read on.

Fittings, tubs and toilets aren't traded as futures, neither are cupcakes or furniture, but those manufacturers & producers do trade futures because they use materials that are traded as futures.

A fitting or bathtub isn't in futures, but the copper, steel and oil, NG it takes to make cpr, CI and PVC is in futures.

Now, before you try to correct me, I suggest googling the CME COT report (commitment of traders), look for the "commercial hedgers" section.

Some examples, airlines buy oil futures, food mfg's like Conagra buy wheat, corn and meat futures, as do large farming companies (the original purpose of grain futures was to secure pricing for farmers).

The ENTIRE premise of the futures market is to allow manufacturers, miners, farmers and producers to stabilize prices for the materials they buy or sell that make the goods they produce.
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Old 12-16-2012, 09:24 PM   #18
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Re: Holy Cow!


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I don't know specifically about plumbing fixtures, but there are certainly material and commodity futures. Lumber futures are a huge market for suppliers at the national level. Take a look at a publication called "Random Lengths". All about lumber futures and their impact on the market.
We could really confuse things by discussing the horrific effect the CFMA has had on commodity & materials inflation in conjunction with insane Fed policy...but I think you'll agree when I say maybe another thread, some other time.
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Old 12-16-2012, 09:27 PM   #19
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Re: Holy Cow!


Quote:
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I don't know specifically about plumbing fixtures, but there are certainly material and commodity futures. Lumber futures are a huge market for suppliers at the national level. Take a look at a publication called "Random Lengths". All about lumber futures and their impact on the market.
Of course your right but this thread isn't based on lumber. Every manufacturer has now emailed out increases to deal with health care. Futures and commodities are not something a corporation sends emails out to supplies about.

My Dad had a manufacturing company when he was alive. He traded natural gas futures because they spent $80k on gas for the laminate presses. They purchased lumber by the train car loads.

In my Dad's last year (2011) healthcare jumped double digits. That cost gets passed on to consumers.....eventually anyhow.

The futures they invested in was a 'hedge' and that was used to save money. Big difference and accounting wise it's even bigger. He didn't send emails out to Steelcase or Herman Miller announcing his futures contracts.

My supplier buys parts and sells parts.
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Old 12-16-2012, 09:28 PM   #20
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Re: Holy Cow!


You're completely taking this out of context. I'm not interested in that discussion. My prices are going up January. That is a fact.

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