How to Mitigate Price Volatility with Managed Pricing Services
In the world of construction, material prices can be – and currently are – unpredictable, presenting contractors and wholesalers with a potential headache. In this article, Trimble MEP explores the challenges that such instability can present and how a reliable pricing data service could help.
It’s a well-known fact within the construction industry that building materials pricing and availability can be unpredictable, with ongoing international trade negotiations, shortage of raw materials and increased demand all leading to sharply rising prices. Average price increases are currently running at 11.49% within the MEP sector, a figure that correlates with those recently released by the Department for Business, Energy and Industrial Strategy for the wider construction sector.
Unfortunately, this isn’t a problem that’s going to go away any time soon. A new survey from the Construction Products Association (CPA) predicted that inflation in raw materials will continue to push up prices throughout the supply chain for the rest of 2021. In fact, from the data trends we’re seeing, the impact is already visible, with Trimble Luckins UK pricing service having processed 2.5 times more price changes in its item database than by this time last year.
Navigating this unstable landscape can be challenging for MEP contractors, due to the rising prices, deleted product lines and ever-changing product ranges. What’s more, with every price change comes the possibility that an item price will be incorrect, potentially causing contractors to under or over bid on a construction project and putting profitability targets at risk. As such, it’s vital that contractors have access to the correct product prices AND that wholesalers and suppliers are providing this correct product pricing information to their customers.
This is where a pricing data service can help, enabling contractors to safely navigate the ever-changing market landscape and protect themselves from profit loss. But, how? Such technology can enable wholesaler data to be synced with contractor estimates, providing them with access to a huge library of manufacturer-specific products and product data. However, it’s not enough for a supplier or wholesaler to simply provide their product information - it also has to be kept consistently up-to-date.
So, how does a pricing data service, such as Trimble Luckins UK, work in practice?
For wholesalers, both large and small, managed pricing services that sync with estimating software are the most reliable and efficient way to get up-to-date information to your customers when they need it most. In fact, this seamless integration allows systems to be synchronised overnight, preventing any disruption to the normal trading day.
Contractors using Trimble’s estimating and procurement solutions can similarly benefit. As soon as price changes are released, the system will automatically prompt the user to apply the update. For the increasing number of customers opting for Trimble’s cloud-based solutions, these updates can be automatically carried out seamlessly in the background, with no disruption to the working day.
Whichever method is used, the end result is the same: efficient synchronisation of trade prices used by our MEP wholesaler partners, bringing accurate, up-to-date information directly to contractor bids and aiding efficient construction project management.
As is the case with many other industries, here, data is key. With access to a large library of accurate and reliable building product data, available right at their fingertips, contractors can more confidently mitigate the issues relating to incorrect pricing and safely navigate the turbulence within the construction and MEP market.
Want to learn more about pricing services? Check out this ebook, Why Every Estimator Needs to Use Managed Pricing Services, or get your questions answered directly by a Trimble pricing service expert by getting in touch.