Frequent price increases in raw materials, how should furniture companies respond to market changes?

The frequent increase in raw materials prices is no stranger.

In recent years, the price of furniture raw materials has risen sharply, and the prices of furniture, such as hardware, sponge, leather, fabric, paint, sheet, glue, spring, coconut palm, sideband, film, carton, etc., are the same every year.

The biggest increase is the related products made of titanium dioxide and TDI. These bulk raw materials are greatly affected by fluctuations in the international market. The price increase has a direct impact on sponges and coatings. For example, the main raw material sponge of soft furniture has been continuously increased by five or six times in one or two months in 2016. Since 2018, prices have continued to rise, and there is no market, out of stock, and no reservation.

In addition to sponges, every rise in the price of wood-based panels such as particleboard and MDF, which are the main raw materials for panel furniture, has stung the panel furniture manufacturing enterprises.

Following the second and third price hikes of many paint companies in Guangdong this year, paint companies in East China after the National Day holiday also set off a price hike, which will inevitably lead to an increase in the production costs of furniture companies.

In the past, for a long time, the upstream raw materials rose once a year or half a year, which is enough to touch the nerves of the whole industry. Nowadays, raw materials have risen several times in a few months, and even a few times in January have been strange.

In the case of price hikes, priceless goods, one-handed payment, and one-handed delivery has become the "normal state", furniture manufacturers have different ways of digesting price increases, which also reflects different market competition strategies of furniture companies. The pattern.

After shoddy, raise the price, hello, my good consumer is not good

The furniture manufacturer who made this choice, in line with the principle that "wool is on the sheep" and never letting itself suffer, is a linear thinking performer.

Raw material traders want to raise prices. This type of furniture manufacturer is calculating two sets of plans. The first one is to buy relatively poor raw materials. Consumers can't see anything different from the surface. As a result, the furniture products that are distributed to the market are of poor quality year after year.

Not only do they not feel that this is their responsibility, but they also evade responsibility when they encounter a complaint with a "what kind of price to buy what kind of goods." Over time, consumers can only give themselves a psychological expectation that does not expect good product quality. The second option is to buy the raw materials for the price increase and then quietly increase the price of the finished product. Considering that consumers can't accept a single product, they will increase their prices. They will use various packages, combinations, new products, and even various pricing methods that they do not understand.

Along with the raw materials business

The furniture manufacturer who made this choice, the first thing that comes to mind is not "the wool is on the consumer", but how to achieve a win-win situation with the raw material supplier.

This type of furniture company is a good collaborator, with a user-centered thinking, a certain product quality, brand reputation, and the price of their products is generally acceptable to the target consumers.

They always attract a lot of raw material suppliers who have the same quality pursuit as themselves. When faced with the price increase, they discuss the countermeasures with the raw material suppliers, and also win a lower unit price due to the reliability of long-term cooperation, or they are much more expensive. However, raw materials with much better quality will get more guidance from raw material manufacturers in the production process, thereby reducing waste and loss of raw materials and effectively controlling costs. Some enterprises even have a win-win situation in which the total cost does not rise and fall.

Give raw materials business confidence

The furniture manufacturer who made this choice gave confidence to the raw material business from the perspective of empathy.

This type of furniture manufacturer is a leader who can achieve the top three in the field and has a huge potential for production expansion.

In the environment where everyone is watching the "bad" market and the investment is relatively conservative, they realize that the demand for raw materials is a long-term growth of business sources, so they dare to innovate, dare to invest, and dare to take orders of raw materials beyond the supplier's estimate. In this way, they can not only get the lowest price from the raw material supplier, but also give the other party the confidence to develop for a long time.

"Be sure to believe, you can do it, attitude determines everything." In the economic downturn, confidence is more expensive than gold. Who can be a little more active than conservative competitors, who can influence and drive a group of active upstream partners to catch up with the momentum, just like the spirit of the sword, "As long as you dare to brighten the sword, you will have the victory."

This type of furniture manufacturer is by no means a radical input. Behind their daring to invest is a strong market monitoring and analysis capability for raw materials that can be effectively and reasonably controlled in terms of cost to achieve the best input-output ratio.

As the cost of furniture manufacturing, the cost of raw materials, how to obtain lower raw material purchase price, as well as improve the utilization rate of raw materials and reduce the loss rate of raw materials, is the direction of furniture manufacturers' continuous efforts. In the process of hard work, the way of thinking is very important, different ways of thinking form different choices, and different results will be obtained.

In the context of rising raw material prices, the ability to control costs and control the most important costs will undoubtedly gain a huge competitive advantage. Behind the strong furniture industry, this is the main reason.