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Increasing Prices On Your Vending Products ? What Happens ?

Sometimes the price increase is beyond our control,

every year or every other year because of inflation the basic commodities of the prices increase. This is very hard for people to accept the price increase, you will get a ton of complaints and calls from your regular buyers on your machines and some locations that are very price sensitive will even have the procurement manager calling you in no time.

This happened to me several times when i increase the prices of the chocolate bars from $1.25 to $1.50 this year,

the people on the location will be complaining and as vendors we would like the relationship to be mutual, in service and convenience for the customer. As vendors we all wish that the customer would understand that we are just a small potato and is also under the mercy of the big suppliers. I just received a notice that the pop beverage prices will have another price increase by the Year of 2018, this is very problematic for me because according to my experience whenever i make a slight increase in prices the sales drop significantly for about a 1 month to 2 months and thereby your profit take home will be reduced.

But most of the locations that i did a price increase would normally give me a go signal

since most of the prices are untouched for more than 1 year and as small business self-employed owners i bear the grunt of the dismal loss of take home income for about 1 year before i make price adjustments since most of the other vendors would also hesitate to increase prices lest the procurement manager might get upset and will try to look for another vendor who can offer cheap products and good service, but im certain that the other vendor would not last long in maintaining low prices since everyone’s cost of goods is the same.

There are no known parallel Grey market here in Vancouver, BC on alternate supplier offering the same products,

unlike when i was still in Asia, there will be about 2 to 3 suppliers offering the same products to the small business owner or shop keeper.

I honestly think that the system in Canada and United States ruling in product distribution is great since there is only 1 wholesaler for the lets say Frito Lays variety chips unlike in Asia where i have been doing business for the longest time, i have brick and mortar stores and orders my products from authorized distributors and at times from parallel Grey market suppliers offering lower prices than the authorized distributors.

I remember that i used to order 300 to 400 hard drives per week from United States

during the time when Seagate was the most popular hard drive in the market and it is way cheaper than ordering it from the manufacturer based in Singapore. I also used to order memory chips from Hong Kong and Taiwan instead of getting it from the manufacturer in Japan on NEC Memory chips. In Asia it is quite an advantage in sourcing different suppliers offering the same products and the law in the Philippines doesn’t penalize you form buying in Grey markets as long as you pay the import duties like everyone else.

But there is a loop hole too in the Philippine Customs border security

, there are a lot of very well-established companies that offer grease money to customs in the Philippines to smuggle the goods and just pay 50% off compared to paying it in full duties and taxes.

I have also observed here in FedEx, UPS and Amazon import deliveries that you have to pay a hefty import duties and taxes here in Vancouver, BC when you are importing goods from US or any other countries. But if you import it from Canada Post you virtually don’t pay any taxes and the shipping fee from Canada post is virtually non-existent. It would be wise for small business owners to go thru Canada Post as the medium of importation access when buying from overseas. I heard that Canada Post subsidized some shipping and delivery costs.

Conclusion :

Some small business owners drive as far as US to get deals and avoid the local prices which are fixed. But of course most the products would still be better to be obtained locally to avoid waste of time and gasoline.

Most vendors would increase the prices at a gradual pace e.g. $1.25 to $1.35 and wait for a few months then increase to $1.50 and another year to make it to $1.75, but this must be made very gradual and you have to show the customers that you are providing excellent service in order to justify the increase. But sure to discuss with other local vendors on their recent pricing before making adjustments.

In places like community centers or public places like hotels, the people are not sensitive and you can easily adjust to any pricing that you deem reasonable and beneficial for both location and you as the vendor.

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