The BPMA would like to make all members aware of extreme price fluctuations in the global market for both raw materials and logistics services which are affecting promotional merchandise prices.
During the pandemic, we have all been acutely aware of certain shortages of goods and particularly since the UK has left the EU, with challenging port, freight and carrier conditions adding to the mix. In the last 6-9 months, the price of raw materials started to creep up including staples for our industry such as cardboard, paper and plastic causing dramatic increases not just in the UK but across many markets.
The industry should brace for price increases
In anticipation of rising prices, industry suppliers are expected to issue revised pricing in the coming weeks and months to reflect the situation. Whilst many suppliers have borne additional freight and raw material price increases in recent months, it is understood this is no longer viable for many in the market. With the global economic pressures on raw material shortages and subsequent eye-watering price increases which have followed, members must start preparing the ground for the inevitable impact. Add logistics cost increases and extended delivery times into this mix and the result is an increase in promotional merchandise prices.
The raw material list includes but is not limited to:
Not just our industry affected
It is imperative the whole industry understands any increases are not limited to the promotional merchandise industry. Globally, the price of raw materials is pushing costs up everywhere and whilst we expect reaction from end-users it is important for the whole industry to stress the market forces at work here, beyond our control.
There are a number of other factors also affecting in the industry; continued Covid isolations, sadly those unwell with the virus, increased running costs of business. As we receive reports from our industry and others across the UK that spend is being increased, enquiries and order levels are at the biggest high for over 12 months, the balancing act for all concerned is exceptionally challenging.
Communication is essential
The BPMA recommends all suppliers and distributors communicate during the order process to ensure all stages of an enquiry to order are fully understood, managing expectations through to delivery.
- Enquiry & Quoting
- Make sure, especially if a repeat order, stock is available and at what price
- Check how long quotes are valid for and don’t assume quotes will be valid for extended periods
- Check if stock be reserved for short periods to guarantee specific goods are available
- Are there any leadtime or availability challenges impacting the order you might wish to place
- Are there any additional freight or carrier costs or delivery restrictions to be aware of
- What terms are your orders being delivered on and could this impact cost and leadtimes
- Manage expectations with all stages of the supply chain to ensure customers at each stage are aware
- Placing orders
- Check, check and check again: clarify and confirm all details before orders are placed – assume nothing, check everything!
End users are starting to spend in our market place which is fantastic news. With pressure mounting to go back to ‘normal’, many are assuming and expecting the same if not better service than before. It is therefore imperative to manage expectations at every stage of the enquiry through to order and delivery. It’s not just raw material costs impacting the industry; freight, carrier, customs charges are all adding to this challenge.
How the BPMA is supporting members
Whilst we may be limited on influencing commodity prices, we will keep members updated and informed. In addition, we continue to negotiate with Government teams on VAT, Customs and the significant financial burden this placed on our industry.
If you’d like more support on how raw materials or any other fluctuations are affecting the market, please contact the BPMA on 01372 371 184 or email email@example.com.