Will Product Prices Drop Along With Gas?
What a difference a month can make. In last issue’s editorial, I discussed how high gas prices were preventing some distributors from attending educational events. Now, a gallon of gas is nearly $1.50 cheaper per gallon than it was just 4 months ago. Diesel is $1.57 cheaper per gallon. However, the new question is, with these decreases, will there be a reprieve in jan/san product price increases?
Yes and no. So far, some distributors are reporting a decrease in the cost of trash liners. That’s welcome news since this product category is always one of the first to shoot up in price when the cost of oil does, too. But don’t get overly excited. If the gas-price decrease is short-lived, expect can liners to go up again.
Other products may not see an immediate decrease, but at least they shouldn’t increase either. This isn’t much of a surprise given that goods in other industries haven’t changed in price despite lower gas prices. Just take a trip to your local grocery store. It may cost less to get there, but the prices of milk, cheese, flour and other items still remain above average. Costs of other resources are still up, including natural gas, which, unfortunately, could potentially increase the cost of some jan/san products such as paper.
Product manufacturers are also using this time of lower gas prices to recoup any losses from previous increases that weren’t passed on to vendors. Jan/san distributors should do the same. Keep fuel surcharges in place; if anything, lower them, but don’t remove them entirely. Continue analyzing delivery routes to make the best trips possible. Maybe with lower fuel costs, now is the time to invest in GPS technology. When gas prices increase again (and of course they will), you’ll be in a better position to maximize fuel efficiency.
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