Although it is in the off-season sales season, the current renovation of building materials has emerged the fastest increase this year, reaching 15% to 20%. Recently, the rising prices of raw materials have affected the home improvement industry.
The four major reasons leading to price increases for home improvement are currently in the off-season. As consumers, they are obviously more concerned about when the home improvement company will raise prices. Many famous domestic decoration companies, such as the peak of the practitioners, Yuanzhou, Longfa, etc., were informed that many companies have quietly raised their prices. Ms. Xu Liongong, the general manager of Fengye Decoration, told reporters that many companies in the home improvement industry are facing the pressure brought by raw material price increases. Since April of this year, all home improvement companies have quietly increased their prices. 5%~10% range. The reason is that there are four reasons for the price increase.
The reason is as follows: Raw material price increase The increase of raw material cost in the upstream directly affects the home improvement project. The prices of ceramic tile, sanitary ware, and water and electricity materials are the most prominent. The home-installed hydropower projects have risen by 20% to 30%. The prices of plates, paints, glass, clay bricks, wires, and faucets in home improvement materials have all increased. Taken together, the rise in raw material prices this year has caused the cost of home improvement companies to increase by more than 10%.
Second reason: Labor costs have risen sharply. For the service-oriented home improvement industry, labor costs account for a large proportion. In 2007, the increase in the cost of home improvement labor is very obvious. Yang Jing, general manager of Sunshine Home Decorations, told reporters that in terms of sunshine homes, the average worker’s salary has risen to 90 yuan per day, and some special types of work have risen to 120 yuan per day. This is Business costs account for a large part of the cost. Yang Jing said: "Our workers must go through formal training and get qualification certificates before they can get jobs. The resulting wages are of course high."
Reason 3: It is difficult to balance the quality, quality service, and price reduction. In the face of rising prices for basic building materials, pursuing prices means lowering costs, and also implying that the quality of products cannot be guaranteed. This greatly damages the interests of consumers, and after-sales service is impossible to consider because of cost considerations.
Reason 4: Promoting the healthy development of the industry Enterprises must be profitable. If long-term exposure to low-cost pressure, there are many companies will go wrong, will find ways to cut corners, use substandard, not environmentally friendly decoration materials. This will hurt the reputation of home improvement companies and consumers' trust in the company. Over time, it is extremely unfavorable for the development of the entire industry.
Internal Integration Reduces Costs Although home improvement prices have become a general trend, some decoration companies have also stated that they will maximize consumer satisfaction by compressing costs or giving away some value-added products. Xu Liongong said that under the background of the general price hikes of building materials exceeding 10%, large-scale decoration companies, such as Yefeng, have only increased by 5%, which is the effect of cost reduction.
She said that through the introduction of new technologies to achieve the role of reducing costs; the optimization of the management level, will greatly reduce the cost of management; In addition, large-scale decorative companies through the group's advantages in large-scale procurement of building materials, can also reduce the cost of building materials; From these three aspects, although the raw materials have increased a lot, the market price of large-scale decoration companies has risen little.
The four major reasons leading to price increases for home improvement are currently in the off-season. As consumers, they are obviously more concerned about when the home improvement company will raise prices. Many famous domestic decoration companies, such as the peak of the practitioners, Yuanzhou, Longfa, etc., were informed that many companies have quietly raised their prices. Ms. Xu Liongong, the general manager of Fengye Decoration, told reporters that many companies in the home improvement industry are facing the pressure brought by raw material price increases. Since April of this year, all home improvement companies have quietly increased their prices. 5%~10% range. The reason is that there are four reasons for the price increase.
The reason is as follows: Raw material price increase The increase of raw material cost in the upstream directly affects the home improvement project. The prices of ceramic tile, sanitary ware, and water and electricity materials are the most prominent. The home-installed hydropower projects have risen by 20% to 30%. The prices of plates, paints, glass, clay bricks, wires, and faucets in home improvement materials have all increased. Taken together, the rise in raw material prices this year has caused the cost of home improvement companies to increase by more than 10%.
Second reason: Labor costs have risen sharply. For the service-oriented home improvement industry, labor costs account for a large proportion. In 2007, the increase in the cost of home improvement labor is very obvious. Yang Jing, general manager of Sunshine Home Decorations, told reporters that in terms of sunshine homes, the average worker’s salary has risen to 90 yuan per day, and some special types of work have risen to 120 yuan per day. This is Business costs account for a large part of the cost. Yang Jing said: "Our workers must go through formal training and get qualification certificates before they can get jobs. The resulting wages are of course high."
Reason 3: It is difficult to balance the quality, quality service, and price reduction. In the face of rising prices for basic building materials, pursuing prices means lowering costs, and also implying that the quality of products cannot be guaranteed. This greatly damages the interests of consumers, and after-sales service is impossible to consider because of cost considerations.
Reason 4: Promoting the healthy development of the industry Enterprises must be profitable. If long-term exposure to low-cost pressure, there are many companies will go wrong, will find ways to cut corners, use substandard, not environmentally friendly decoration materials. This will hurt the reputation of home improvement companies and consumers' trust in the company. Over time, it is extremely unfavorable for the development of the entire industry.
Internal Integration Reduces Costs Although home improvement prices have become a general trend, some decoration companies have also stated that they will maximize consumer satisfaction by compressing costs or giving away some value-added products. Xu Liongong said that under the background of the general price hikes of building materials exceeding 10%, large-scale decoration companies, such as Yefeng, have only increased by 5%, which is the effect of cost reduction.
She said that through the introduction of new technologies to achieve the role of reducing costs; the optimization of the management level, will greatly reduce the cost of management; In addition, large-scale decorative companies through the group's advantages in large-scale procurement of building materials, can also reduce the cost of building materials; From these three aspects, although the raw materials have increased a lot, the market price of large-scale decoration companies has risen little.
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