What a difference a year makes. Last year, just before COVID,
business was good and prices were relatively stable except for your normal
increases once a year. Then COVID hits and business blows up. Now as a builder
you have to figure out how much business you should take on. How many leads
should you take? People say too much business is a good problem, but it is a
problem. We spent six or more months navigating through sales and then figuring
out the timeline from contract to dig. Then prices start to fluctuate. Now we
are seeing pipe triple in cost in just a few months and wood prices souring.
The question is how do we sell a pool today that won’t be built for six months
and price it accordingly? It is a dilemma I’m sure every builder is wrestling
with right now.
I have heard talk of a price escalation clause which, I guess
if written properly, works. I worry about the customer’s trust in waiting six
months then being told they have to pay more. You could also adjust prices
regularly (perhaps monthly) and add a percentage to your typical pricing
calculation to cover increases that may arise before construction. You may
also want to use a clause in contracts so that if materials aren’t available,
substitutes may be used or choices may have to change.
In speaking with many manufacturers, they suggest ordering
12-16 weeks out for anything you need. Now is the time to work closely with all
your trade partners to maximize your purchase before the next increase. Also,
this may be the time to limit choices on pools to those products that are made
domestically and have shorter ordering times. It’s definitely a time for
staying on top of costs, saying no to jobs, and trying to maximize your margins
instead of increasing volume. Sharing ideas amongst peers is also helpful. There
is plenty of work to go around so helping each other may be in all of our best
interests.