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Up and Up

Panelists talk price increases


Chris Cavanaugh
Owner
Cavanaugh Pool
Owensboro and Madisonville, Kentucky

After 2020, price increases were inevitable due to supply and demand. Most of our price increases were like a normal year, but there were several that hit harder than normal. Steel vinyl-liner pool kits are continuing to rise, due to lack of raw material and huge demand, and above-ground pool kits have risen as well. We have had two increases since the fall. I see this continuing to happen until supply catches up with material supply. This is a problem for a lot of contractors or dealers: They have pools sold for several months, and if they do not have a contract that states the price will rise if the material rises, the dealer will lose a lot of profit. We typically have not had a clause in our contract until this year. Now, I am showing a customer the cost of our pool kit at any new contract signing, and if it changes before we can install, the change will be added to the contract price.

Other increases will hit the retail and service end as well. With the trichlor shortages this year, most of our trichlor products increased 10% to 12%. Luckily, we have a large warehouse and got some orders in and had them delivered in October/November to beat other price increases coming. The supply we have should last us the 2021 season.

As far as our customer base, we will mail and email our customers about chemical increases to make sure they are aware of the issues facing this 2021 season, instead of having to explain it to each customer when they see chlorine tablets have risen quite a bit from last season. As far as our new builds, quotes have less than a 30-day window of being accepted. After 30 days, we are having to re-quote.


Tracy Bond
Owner
Great Valley Pool
Frazer, Pennsylvania

Our supplier prices have increased over the last 12 months. Our largest price percentage increases have been on trichlor tabs and bromine, but we also see increases on equipment, parts and other chemicals. We typically price our items at a specific profit margin so that, as our supplier prices increase, so do ours. If we can gain a point or two due to high demand or low price elasticity, we will take it. If our suppliers implement an additional midseason price increase, we increase our prices commensurately.

 While some of the causes of the price increases are temporary, such as the trichlor supply shortages, increased costs due to COVID prevention measures and supply-chain issues due to employee quarantines decreasing availability, I believe prices will not decrease once these factors are gone. Price decreases are extremely rare, if not nonexistent, so I don’t see that happening. For our service and maintenance business, we generally raise our labor prices by a certain percentage once a year as many of our operating expenses also increase. We do not raise our labor prices midseason but if chemicals, equipment or parts increase midseason, these prices are adjusted without explanation to our customers, and I don’t think they even notice.



Jules Johnson
Operations manager
Mission Pool & Spa Supplies
Mission Viejo, California

Our costs have absolutely increased. There are normal distribution-center increases, but we are also being gouged on tablets and dichlor. We weren’t even able to run a coupon for tablets in our mailer this year because our profit margin is so low. Obviously, the [BioLab] fire impacted the price increases for certain types of chlorine. Since the industry is booming, supply and demand have a lot to do with the increases, too. We have no choice but to pay increases to our suppliers to continue serving our clients. As long as the industry stays the way it is and COVID is present, these price increases will be temporarily permanent. Once things are back to normal, a reduction will be required. As a small mom-and-pop operation, we have no choice but to pass these increases onto our customers. Every dollar counts with us. We hate to do it because we’ve been in business 65 years and are known for the lowest prices.


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