June 21, 2022

Many Companies are Reducing the Size of Their Products

By Paul Bieber

Walmart reduced the size of its paper towel roll from 168 sheets to 120. Honey Bunches of Oats Cereal reduced from 14.5 ounces to 12 ounces. This is how companies battle inflation. The average customer sees the price as what it always has been and usually does not recognize the size differential.

Okay, glass people. Here is what we can do. Resize every IG unit you order one inch smaller than the customer wanted. They’ll never notice. Or, let that door mirror be smaller. They will never see it.

Oh, by the way, Guardian increased prices by about 40%. The other glass folks will, too. What can you do about this? Not much if you don’t have a pricing agreement in place. Those are hard to come by for the corner glass shop buying from a local fabricator/distributor.

Starting now, all of your quotes should have an absolute limit of 30 days. A customer who is putting up a building in six months can be given a quote with a 5% per month escalator clause. Also, a clause should be inserted that says if a major glass manufacturer raises its prices with a notice of just a week or two, the quoted price will be refigured completely.

Will this cost you a job or two? Sure. Is it better to get a job where you are going to lose 20 % of the job billing or not do the job? You get it.

Service calls have to get a gasoline surcharge, starting tomorrow. That number, depending on where you are in the country, can vary from $9.50 to $19.50 per visit, based on your cost of fuel. Train your phone staff to mention this on every request for service.

With these changes, have your company lawyer review your basic quote and invoice format so that certain customers who think they are smarter than the rest of us think these surcharges don’t apply to them.

There are a few wise guys in the world who will tell you they are too important to pay such a surcharge. You can argue or not, but if you decide to not charge the surcharge, be sure to raise that customer’s price by an extra 5%.

Inflation is here due to many reasons, none of which are going to change in the balance of this year. Keep your pricing flexible. Be very careful on long-term projects.

And, an extra thought: Hard to believe I once had a phone attached to a wall, and when it rang, I picked it up without knowing who was calling. (Thanks to Eugene for this one.)