As with all businesses, decisions have to be regularly made on pricing of products. Costs are increasing all the time; cost of raw materials, cost of energy, cost of utilities, cost of transport, cost of wages. Unlike some large businesses such as supermarkets (who can often dictate to the supplier what price they are willing to pay and even charge suppliers for the privilidge of stocking their products) we have to pay the prices our suppliers demand. We can sometimes negotiate discounts for products we sell in volume and we belong to various wholesaler schemes that provide promotional offers. These discounts and offers we pass directly on to our customers, members of our emailing list, followers of our Facebook page and this blog will be familiar with our regular monthly offers and discounts. However price increases happen every year, often more frequently with some suppliers, and we have to make decisions on how to handle the increases.
Where we can, we always look first to absorb cost increases into our business. There are a number of ways this can be done and we always exhaust all of these methods first. However, once these are exhausted we have no option but to pass on some of the increase to our customers. We never want to do it but some times it is unavoidable. It is only ever done as a response to genuine increases in cost to our business and in response to justifiable increases by our suppliers. In some cases, where we have felt supplier increases have not been justified and an element of unfair market manipulation has been at work, we have stopped stocking that suppliers products, rather than colaborate in overcharging our customers.
We have recently been informed of what we consider to be a justifiable increase in cost by our livefood supplier. The cost to us for livefood has not increased for a number of years, in fact it actually went down due to improved volume discount a few years ago, a reduction we passed on in full in our own pricing. However the suppliers costs have been steadily increasing over this period. Like us they have done a number of things to avoid passing on these increases but are now at a point where they can no longer do this. Some of their cost figures are eyewatering. They have absorbed increases in production costs over the last decade of a whopping 42%, without passing any of this on. This feat has been acheived by efficiencies, market growth (higher sales volumes) etc.. Unfortunately with the recent increase in the National Minimum Wage and other increases in feed and energy costs they are forced to increase their prices to us. Whilst most of the increases on their high volume items are relatively small (2.3% for prepacked locusts for example), some of the more exotic, small volume items are quite large (10% for dubia roaches).
So, what do we do? Just pass on the increases to our customers so it remains viable for us to sell these products but lose customers? Absorb the costs and keep our prices the same but go out of business because we no longer have money to pay our own costs (rent, energy, utilities, insurances , suppliers , etc, etc.). In the end our only sensible option is to anaylse each product range in turn and come up with a compromise.
From the end of May then, there will be a new pricelist for livefood and I am pleased to announce that the higher volume items such as crickets and locusts will not be increasing in price at all. They will be staying at £1.99 a tub. However some of the lower volume sellers will have to go up a little. For example dubia roaches will increase to £2.75, although lobster roaches will remain at £2.49.
It is never a good thing to increase prices but we do feel that these supplier increases are justified this time round and that our livefood quality remains the best around. We do not just receive it from our supplier, stick it on the shelf and hope it sells before it dies. We look after our livefood, feeding every couple of days (yes it is very fiddly and time consuming but worth it), cleaning out old food and any dead insects, keeping numbers in tubs up by recombining tubs where necessary and controlling temperature to ensure the food is in the best condition possible for your reptile, spider or whatever. Also we do have our loyalty scheme. This means participating customers get an additonal 2.5% off everything they buy when their poiints accumulate. So we are confident we still offer the best value for money on livefood.