Viewpoint Ducking price rise communications
I
thought I’d share our experience at Wicked Uncle with how some of our suppliers have handled recent price increases, extremely badly in a few cases. ‘Cowardly’ is the word I would use. Some pricing has been forced to go up, as shipping costs are currently vastly inflated, and the cost of materials has risen. As highlighted in Toy World recently, the Covidaggravated congestion at shipping ports has caused a huge demand for shipping space, delaying shipments and resulting in container costs increasing by several thousand dollars. We placed an order recently for a 20 ft container of 2000 pieces and agreed to pay the additional £4k shipping cost, in effect a 10% price rise on each unit. We knew this when we ordered and fully appreciated the reasons why. We know about the reasons, everybody does, but the big question is how much should prices be raised and crucially how do suppliers tell you, the customer, that this is going to happen? Last week (mid-June), we received an email from a supplier informing us of a 5% price increase in July - fine I thought, so let’s order now. We had last ordered in January, only to find when we tried to order that our price had increased by 20%. When queried, we were told that was because of the price increase in May. “What price increase in May?” I dared ask. “We did ask Bill (recently left and name changed to protect the apparently guilty) to inform all his customers but this did not happen”, came the reply. Enough. This is now the fourth supplier who has introduced significant price increases (20-35%)
without telling us, with no notice, in fact with no communication at all. When we asked why we hadn’t received any notice or even been told, the shifty and evasive replies contained everything from IT error, email problems and mail delivery, but strangely 5% price rise emails seem to have no problem getting to us. Ultimately, the four suppliers all blamed the salesman for not informing us. Conveniently, all four had salesmen who were no longer with the company. One wooden toy supplier fulfilled our purchase orders and then invoiced with new pricing and without the discount we’d had for over five years. When queried (and yes that is the polite term), we were informed that our discount should have stopped months ago and how lucky we had been - we just didn’t realise how lucky we were. To put this into context, the discount owed was a retrospective credit for several thousands. We got it, but only after ‘making our position very clear’. And yes, once more it was all the fault of the salesperson no longer there who “did not divulge this information to the business” - really? We deal with over 100 suppliers and the attrition rate of salesmen leaving during Covid is high. Of the suppliers that we’ve dealt with for more than five years, 70% of their salesmen have ‘left’ in the last year and the convenient ‘blame the salesman’ tactic seems to have become the default defence when challenged on why we were not informed of price rises. This is unprofessional and frankly cowardly, ducking the issue and expecting the customer to just accept it on the next order. Keeping your mushroom-like customer in the dark and hoping to glide a 20-
30% price hike past them is simply not acceptable. How naive do they think we are? Or is it that they just do not care as somebody will always pay these hugely inflated prices? With another price hike that has apparently already happened (no price list received of course), we have ceased trading with the wooden toy supplier, having spent hundreds of thousands in the past few years. Compare that with the approach of a properly run company, which writes to inform us of price changes in advance of a certain date, citing examples of shipping and material costs. Thereby explaining so we clearly understand and giving us due notice of the price increase coming – and a choice. One even sent me a list of all UK stock available at the old price, because this stock was bought before the shipping cost hike (a very good point). This company is as impressive as the not-so-fab four are poor. We deal with some great companies, where everything is transparent about their pricing, their teams are efficient, have been brilliant during lockdown and are a pleasure to deal with. These include Learning Resources, Marvin’s Magic, Juratoys, Smart Games and Toynamics, to name but a few - like an Oscar speech, our apologies we can’t list you all. Thank you for being straight, a lesson some others clearly need to learn. To any supplier hoping to smuggle a price rise past any of us in the toy industry, blaming the now unemployed salesperson for not informing us is simply not acceptable. Have the cojones to stand up and inform your customers of an impending price increase. Is that an unreasonable expectation?
Toy World 73
Liam O’Shea Liam founded Wicked Uncle, the online present specialist, with his brother Mike. As the buyer for the company, he has over nine years’ experience in dealing with suppliers across the toy and gift industry.
