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How to inform customers of a building materials shortage and price rise

From pandemic after-effects to supply chain disruption, material shortages are more common than ever. Alongside delaying projects, they can also cause price increases. Here’s how to discuss building materials shortages with your clients.

If you’re in the building and construction trade, you’re probably aware of the shortage of building materials in recent years. And while certainly not as much of an issue as during the pandemic, shortages are still occurring.

Sometimes a shortage of building materials is unavoidable. But this doesn’t lessen the impact of project delays or price increases for your customers.

These issues can inevitably lead to some very stressful conversations with your clients about next steps.

So, if these difficult circumstances sound all too familiar, then read on. We’ll take you through everything you need to know about building material shortages and how you can best navigate this sort of problem with your customers.

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Why was there a shortage of building materials?

As mentioned above, following the pandemic, building materials were quite limited. There were several reasons behind this backlog, many of which were unavoidable.

For example, during the pandemic, mills and factories had to close. This in turn interrupted many supply chains. But even after they reopened, these factories were still facing a lack of raw materials due to a global shortage.

Therefore, procuring building materials like timber, cement, steel, and concrete became all the more challenging.

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Is there a shortage of building materials now?

While the construction sector bounced back after the pandemic, this had the adverse effect of skyrocketing demand. Supply chains couldn’t keep up with demand, creating bottlenecks across the globe due to container shortages and port delays.

Fortunately, these problems have somewhat settled over the course of the last few years. However, the potential for a building materials shortage has not gone away.

For example, Brexit has also caused complications, seeing UK administration slow down imports and exports across the country.

On top of this, there are now tougher restrictions on employing foreign workers. This has specifically created a shortage of lorry drivers for transporting materials that come into the UK.

There is a lot more we could touch on to discuss this area. And our partner CHAS has done a deep dive into the broader factors that are directly impacting supplies.

It’s certainly worth reading if you want to explore the broader economic and legislative pressures that will continue to impact the construction industry.

building materials

Are construction costs set to decrease?

With demand remaining high and shortages continuing, it’s hard to see building material costs falling anytime soon. That being said, there are signs that the last of the kinks in the supply chain have started to settle.

In some areas, prices are no longer at the same peak as seen in previous years. But although the situation is slowly improving, costs could remain stubbornly high.

So, this means you need to plan accordingly in order to meet customer demands.

How do I inform my customers of material shortages?

Given that shortages might be unavoidable, it’s best to be upfront on the matter with your customers. This will help them to understand and empathise with you as well as easing the pressure of expectation in these stressful conditions.

Clients will always appreciate honesty. So, before raising your prices, it’s best to notify your customers and clearly explain why you’re having to do so. This can be in the form of a polite email, or even a text message.

It’s also a good idea to post an update on your website and social media platforms. That way, you can ensure everyone is aware that prices can fluctuate, and delays may happen in the current climate.

Finally, you should also make sure that you stay in regular contact with your customers. This will make it easier to notify them about any future changes. It will also show that you value their business and you’re doing your best to stay on top of any setbacks.

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How can I work around material shortages and price rises?

While such issues might be out of your hands, there are two key ways you can work around them. Follow our tips below to limit the potential impact they might have on your business:

Accurate quoting

When quoting completion dates for your projects, try to outline that these dates are estimates only. This can really help to give you a bit of leeway with customers and avoid causing disappointment.

You should also make sure that your quotations have a clause that allows for price adjustments or variations. With material shortages, you need to be able to adapt to any changes over the course of your projects.

Just make sure that the customer is made fully aware of any clauses or estimations you include and why they are necessary.

Keeping your inventory stocked

Along with being prepared for changes, it’s important to have a good idea of where you’re at with your stock. By keeping a close eye on this, you’ll have a better understanding of what to buy for each project. You’ll also avoid any unnecessary construction waste.

Essentially, this will help minimise the chance of you being caught off-guard by material shortages. Also, as part of planning, you should consider alternative materials you could use.

You can then keep these stockpiled in case you need to use substitutes in certain scenarios. This also gives you the perfect opportunity to invest in more sustainable materials.

Finally, having a good trade relationship with your suppliers is crucial for your business. If you haven’t already, it’s probably best to have written agreements in place.

This will make clear the minimum quantity of stock you need delivering, along with a price cap. With these in place, you’re less likely to face unexpected shortages or price hikes.

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Save money on your business with Checkatrade

Although we can’t help you save money on materials. As a Checkatrade member, we can help you save money in other areas. In fact, when you sign up, you get immediate access to our partner discounts.

Here are some of the benefits of becoming a Checkatrade member:

More leads

Every week, Checkatrade members receive over 100,000 leads. In 2021 3 million UK homeowners chose a Checkatrade member with a third of all work coming directly through Checkatrade*.

Grow your reputation

8 out of 10 people would choose a Checkatrade endorsed trader over someone who isn’t endorsed**. When you use the Checkatrade tick, your customers will trust that you provide an excellent service.

Trade discounts

Checkatrade members get exclusive access to a range of deals and benefits. As a Checkatrade member you can save an average of £470 per year***. Savings include equipment, insurance, van leasing, workwear, and more.

Checkatrade members get more for their money

Save on both business essentials and insuranc

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Content disclaimer: This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer here.

*Checkatrade brand tracking survey April 2021

**Claims are sourced from a survey conducted by Deep Blue Thinking on a nationally representative UK sample in November 2021.

***Year runs from April 21’ to March 22’. Saving calculation based on average spend across 12,505 members in 2020/2021/2022. Discounts differ depending on the partner. Products range from low value items to high value items. Some exclusions will apply on products.

 

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