The Dreaded Price Increase

One of the hardest things that I deal with as a retailer is price fluctuation at wholesale and retail levels. There are many things that I can do in store to try and hold the line on prices and I do try my hardest to hold prices but there does come a time when there aren't any options left and my prices go up. I'm going to try and explain what's been happening with my manufacturers and why you'll, unfortunately, be seeing increases on my floor in the coming weeks. I'm by no means an expert on this stuff though, so this post is the best of my understanding of the issues. I get most of my information from my manufacturers representatives and trade publications.

Due to the fact that I deal primarily with goods made from natural fibers like cotton, silk and linen there are a huge number of factors that can affect the prices that you'll see in my store. The most basic of those factors is the weather. Last summer the terrible flooding that killed thousands and left so many people homeless is Pakistan also wiped out the country's entire cotton crop. As the world's fourth largest exporter of cotton this represented a massive hit to the cotton market. This shortage to the supply started to affect the manufacturers that I deal with in the fall of last year. At that time most of them were able to absorb the increases with only a few passing on increases to me, which I absorbed rather than raising the prices you see.

Now, here's where it gets tricky. As we all know the developing world is changing very quickly. Demand for consumer goods in places like China and India is growing very rapidly. Countries that used to export almost all of the textile goods produced there are now keeping much of the production for internal consumption. While I don't purchase textiles from Asian manufacturers it still affects my suppliers. Because the demand for cotton is starting to outpace the supply, the cost of all cotton goes up. The same goes for down, silk and wool. The mid to higher end goods that I deal with are being purchased in vast quantities by companies who used to buy only the cheap stuff. Furthermore, my manufacturers are placing orders one day and being told a week or a month later that the price has doubled, or that the order was canceled due to unavailability of raw goods. The result of all this is that I receive price lists that are only good for one or two months, I frequently get notices that cotton velvet or some other fabric is unavailable for the foreseeable future and that my costs are going up.

The following are a couple of links to articles I've found useful and informative: Home Textiles, Blogging Stocks, Home Textiles

So what does that all mean? Well, it means that I've had to raise some prices. Bella Notte hit us with a 20% - 25% percent increase earlier this year. I've been able to offset that a bit by tightening up the way I order Bella, which decreases my import and shipping costs. The high Canadian dollar helps as well. So with Bella, I've been able to keep it to approximately a 10% increase. CuddleDown also gave us 15% + increases this February on everything from towels and sheets to duvets. I can't absorb the increase on the towels but I've not yet raised the prices on the cotton bedding. I'd also purchased a rather lot of their Brome Lake duvets in January so I have those at the lower price. The new St.Geneve catalouge arrived this morning and pretty much everything has gone up from duvets and pillows to bedding, protectors and towels. The good news there is that I currently have a lot of stock of their Lajord and Zeigler duvets so the old prices are good until I have to re-order. I also have a fair amount of Heirloom, Hutterite and Chateau pillows so they will also stay at the lower price while supplies last. Additionally, I am always looking for ways to fine tune my buying and shipping expenditures so I'll keep doing my best in order to keep prices fair.

It's not totally bleak though, while doing a bit of reading this morning there were a couple of articles that noted that India is on track to see fairly dramatic increases in crop harvests this year and cotton production and milling in the US appears to be on the rise as well. So I'll stay hopeful that the dramatic fluctuations we've been seeing lately will even out soon rather than later.