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In the recent MDM/Baird fourth quarter distribution benchmarking survey, just 6 percent of distributors and manufacturers said that they were expecting no impact from price hikes in the first half of 2011.
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Many manufacturers held off on price increases in the past two year due to heightened price sensitivity in the recession. But thanks to product/material shortages and raw material cost volatility, many distributors and suppliers say they are seeing "fast and furious" price increases right now. Those increases are making distributors look more closely at what they can do to offset them or pass them on successfully.
Some strategies for offsetting increases include trimming inventories, improving internal efficiencies and supplying alternative solutions in "certain competitive situations," according to the MDM/Baird survey.
I looked at this issue in the latest issue of MDM Premium. Read that article: Distributors Grapple with Price Increases.
Here are some related MDM articles on pricing and profitability:
- Strategic Pricing and Your Sales Team
- Profitability in the Great Recession
- Building Blocks to a Profitability Mindset
The MDM research team has devised a new product that can help MDM readers stay on top of price trends on a month-to-month basis. The new Inflation by Commodity Group monthly report is available here.
Watch this video to learn more about this data service: