We all know the price of fuel will continue to rise throughout the world, with no real ceiling being visible. This being the case, and with experts saying that the economy is solid and recovery is on its way, can the industry expect a turn around this year? Next year?
Unfortunately sweeper professionals, along with anyone else who buys things needs to understand that as the price of fuel goes up, so goes the price of many other things we need to get by. The direct driver to increase fuel costs, oil, is also a driver in producing plastics, urethanes, and rubbers used as parts on sweeper trucks. In many areas, the price of steel and other metals has been up and down, but the cost to ship it has increased and the shipping companies are charging surcharges to move this material to manufacturers To add to this, there is a word wide shortage of natural rubber, which is also leading to a shortage of synthetic rubber and increased costs as the demand rises. So, in an industry that battles the wear life, and searches to find a solution to high priced tires, this issue will become very visible in 2011. The prices of new trucks will rise, and the price of maintaining new and old trucks will too.
So, what can sweeper companies do to be successful in these frustrating times. One thing to remember is that if you’re paying higher prices for fuel, wear parts, tires, trucks, insurance, etc. so is your competition. The price increases that are being passed on to contractors can’t continue to be absorbed and customers need to be educated and understand the costs associated with hiring a quality contractor to meet their sweeping needs. Contractors need to be diligent in selling quality and service and not allow their customers to get caught up in looking for low cost providers. Contractors should be smart about when they raise their prices and be timely in looking for signs that might offer them the ability to go back to their customers and drop their price back if the current environment changes. Throw a low cost service in as a benefit to your customers. Add services to your offering that would set your company above your competitors.
These tough times are even tougher for those who are not prepared. Those who don’t understand their costs and those who don’t understand the effects of the economy on their business will fall by the wayside. For those who have control of their processes and a solid grasp on their business, this struggle can be seen as an opportunity. Many of the strugglers will be fire selling their equipment. The not so lucky, will have their equipment taken and sold at auction. Good companies will jump at the chance to get this discounted equipment while it’s available. Further, as these companies fail to exist, the good company, the company that stood its ground, the company that was not afraid to increase its prices to continue to make money while offering the best product available will be the companies still standing when the dust clears.
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Gregg Blair, Product Line Manager, Engineered Components, is with Superior Tire and Rubber Corp. and can be reached at [email protected]. Gregg is also a valued member of the North American Power Sweeping Association (NAPSA). The North American Power Sweeping Association (NAPSA) is a nonprofit association made up of 300+ contract sweepers, service providers and sweeping equipment dealers, manufacturers and suppliers. NAPSA is dedicated to providing beneficial support to the membership and enhancing services to the sweeping industry.
NAPSA is committed to promoting and educating the power sweeping community while enhancing the environment. For more information on NAPSA membership, please visit www.powersweeping.org or call (888) 757-0130.
