The golden rules for managing price increases in construction

In Latin, the words for price and value were more or less the same thing, because nothing should be given a price without considering its value to the buyer. However, many companies today still think of price in basic terms by defaulting to a cost-plus-profit mentality. This often leads to price wars and difficulty in increasing prices, because sellers haven’t considered the value of their products and what buyers are willing to pay for them.

This applies to the building and construction industry. Global construction costs continue to rise due to the increasing price of raw materials. According to research from Source International in January 2018, in the fourth quarter of 2017, most raw materials in Asia saw a continued increase in price. These materials include essentials such as plastics, rubber, steel, other metals, wood, paper and ceramic.

Amidst rising costs, it is important for building materials suppliers to critically consider the best way to position their products to buyers, so that they can increase prices without losing market share when needed.  

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