Increase in Price of Raw Materials and Supply Shortages: What this Means for Refinishers and Homeowners
In one of our most recent blogs entitled, “Kitchen and Bath Refinishing Demand at All-Time High,” we uncovered the dramatic increase in the working-from-home lifestyle. According to Pew Research, 71% of people are currently still working from home. Because of this, many homeowners are looking to invest in their homes and in larger projects, such as remodeling kitchens and baths. The issue? There is a shortage of raw materials to make this happen. According to a recent NAHB/Wells Fargo Housing Market Index (HMI) survey, a majority of builders reported a shortage in cabinets, ceramic tiles, plumbing fixtures and fittings, and more than 90% reported a shortage in plywood, oriented strand board (OSB) and plywood.
The solution? Refinishing! Refinishing provides an alternative remodeling method to help satisfy homeowners’ needs without the time, hassle and mess that comes along with a full remodel. While we could stop there because this leads to a lot of opportunity for refinishers, there is still one other issue for homeowners and refinishers alike–pricing. The price of raw materials has also spiked dramatically. So, how do you market the refinishing business nowadays and how do you consider the price increase?
How to Combat Increase in Materials or Supplies
While increase in demand is a great problem to have, what has not been addressed is the rise in pricing of raw materials, such as steel, aluminum, plastic, paper, and chemicals. Due to global supply shortages, transportation delays, and freight costs that have tripled in the last year on most building materials. Homeowners will need to be educated on these rising costs and refinishers may need to add in additional costs for product. Refinishers also need to account for longer turnaround time to receive their product, ensure extra product is on hand, and make homeowners aware of potential delays, especially with the holidays upon us. While NAPCO has done its best to keep prices the same and innovate in order to find other solutions to products that are hard to come by these days, prices look like they will continue to increase. To combat the price of raw materials, take a look at your pricing structure and profitability to determine if you should raise your prices. We also have a blog on tips to know when it’s time to raise your prices.
Alternative to Remodeling is Refinishing
If you’re a builder, painter or other general contractor, you don’t have to pass on remodeling jobs—you just need to speak to homeowners about using refinishing as an alternative. If you want to increase your knowledge about refinishing—hone your skills, learn about new products - check out the 3-day trainings from NAPCO on professional refinishing. Refinishing provides an alternative remodeling method to help satisfy homeowners’ needs. Expanding your skills and services to include bathroom and kitchen refinishing is an excellent way to continuously provide options to homeowners so they can improve their surroundings, without worrying about material shortages.