Wholesale prices on A/C units to go up by 5% next quarter

We have to keep up with other HVAC companies in the region, hence, we can’t raise the prices abruptly

I met with a wholesale distributor recently, who supplies all types of AC units, and supplies to every east coast HVAC branch. We control around 51 branches on the east coast. This particular distributor costs us a lot each fiscal quarter. I met with the distributor for a regular meeting. I came to know that our wholesale prices on AC units will be increased by 5% from next quarter onwards. That is a significant hike, which was uncalled for. I immediately arranged for a separate meeting to discuss this development and the contract. The 5% increase wasn’t good news for me. In the second meeting with the representative from the Distribution Center, they elaborated on the price hike, which will be effective soon. Right now, they are starting with the AC units in the next quarter, following which, the hike will be imposed on different products in the next 1.5 years. The new prices mean increased cost overheads for the normal AC installations! Our clients are also going to be impacted by this development. We have to keep up with other HVAC companies in the region, hence, we can’t raise the prices abruptly. At the same time, we can’t be fine with a direct 5% drop in our revenues. We can’t possibly take money from our employees or investors, so we will have to raise the prices of our top HVAC products.

 

Air conditioning workman