Posted 17 July 2019
At present our business is split fairly evenly between contractor, reseller/wholesaler and OEM markets. A common thread that links most discussions we have is how margins are being squeezed across the board.
In some cases goods are free issued by the client but increasingly we are seeing contractors being told where to buy goods with, presumably, a rebate paid back to the main client.
In other cases payment terms, rebates and obscure discounts are being imposed on suppliers with varying levels of success.
At first, it’s possible for most companies to reduce prices slightly without having much negative impact on the customer. However it’s only a matter of time before the cracks start to appear.
Factories remove shifts or have prolonged shutdowns which lead to longer delivery times.
This creates price pressures which lead to a reduction in quality and reduced orders which then result in reduced stocks so more and more items become hard to obtain.
All this places a premium on reducing costs, cutting wastage and having stocks available for customers as and when they need them.
At FS Cables we’ve seen an increased use of our ‘cut-to-length’ service where customers are able to buy exactly what they need and save on wastage and ultimately costs.
We’ve also cut margins, although with the rise in copper prices some of these savings have been offset.
We’ve always taken the word ‘stockist’ seriously at FS Cables and this year have increased both the range and quantity of products held on the shelf for next working day delivery.
Remember it’s important for everyone in the chain to make profit otherwise they don’t stay in business. Any further cuts may be false economies in the long term.
Best wishes
Jon Herbert