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Price increases  

20 members have voted

  1. 1. How do you handle price increases?

    • Notify location management?
      3
    • Post notice on Equipment?
      3
    • Just raise them?
      13
    • Other
      1


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How do you handle price increases with your locations? 

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I would always post a 2 week notice that management was aware of because I would always do an entire category at once like candy or pastry or soda, or several categories after a long spell of no increases.

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The gas stations don't give me notice when they raise the gas prices.  I show up at the pump and "surprise" the price went up.

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I used to pretty much do the same as AZ. I have come to change that practice the last few years depending on my relationship with the location. I don't think it's the quite the same as the 'gas station'.  

 

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I have notified management of price increases several times before.  Most of the time, they pretty much tell me to do whatever I have to do.  A few times though, they more or less acted like they would immediately look for a new vendor if I raised prices... regardless of what it was.  One location in question was $1.25 for 20 oz soda maybe 3 years ago and I told them I HAD to go up.  The office manager wanted time to think about it or whatever.  I got the prices up but I should have either just posted a note or just raised them and not said anything.  I feel like either way is better than notifying management.

I get stressed with price increases.

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I have a location that requires written notification, other than that, I just raise them. Usually not all at once though, all candy, all pastry, all chips, or all soda. So maybe soda and pastry first, then chips and candy next cycle.

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I make sure the new prices are clearly marked on the machines, so for instance if a drink machine has a large number of same price items that machine will get a prominent price sign when the price goes up (i.e. "12 oz Cans now .85").  That cuts down issues with people expecting the soda to dispense when they deposit the old price!  If I have a working relationship with someone at the location I will tell them but I don't go out of my way to do it.  If there is no contract on prices then the location should not expect control, and I don't apologize for needing to keep up with inflation like the rest of the world.  I have only lost one location due to price increases, and was not sad to see that one go.

Most operators are a little bit afraid of increasing prices, and it's good business to be sensitive to pricing expectations of your customers.  But the longer you go without increases the more your customers come to expect no increases.  I think it's good business to adjust prices on one category at a time and to do that at least once or twice per year.  I read somewhere that January and July are the best times to raise prices for customer acceptance; I don't know how true that is but I think six months is a good minimum interval to space out category increases. 

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47 minutes ago, Southeast Treats said:

... But the longer you go without increases the more your customers come to expect no increases.  I think it's good business to adjust prices on one category at a time and to do that at least once or twice per year.  I read somewhere that January and July are the best times to raise prices for customer acceptance; I don't know how true that is but I think six months is a good minimum interval to space out category increases. 

That's an excellent point regarding taking too long to raise prices.  When I bought some locations from one vendor years and years ago, the prices were pretty good.  At the time, my sales were pretty slow (about 40k/year) and an account doing 2k/year was pretty good to me.  I probably went 2 years before I even considered raising prices.  Most customers were understandable but I had a few that... when I wanted to raise candy from 90 cents to $1.00, or pastries from 95 cents to $1.00... there were a few that had an issue with it.  it took me a few more years to realize it, but people get SO used to the same prices all the time that they get quite upset when the prices go up even 5 cents.  But when you raise prices every year, they know it's coming. 

In regards to January and July being the best months... I think that's about as useful as the statistic that says something like 10am is the best time to make a cold call.  Thing is, the conclusion is a little misleading and would be better stated that ANY time after 10am is a good time to call but calling between 7am and 9am is generally a bad time to cold call.  I try not to raise prices in November or December but any other month is probably fine.
 

I'm glad this post was made.  It reminded me to raise prices at a few locations.  Soda needs to be $1.50 minimum now.. and I can see $1.75 coming within the next 2 years around here.  It's about time to make everything at least $1.00 in the snack machine as well... and that's without commission.

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