How Distributors of Disposable Non-Woven Wipes and Tissues Can Navigate the Rising Price of Supplies

It’s no secret that prices are soaring across the board right now, both in the United States and internationally. In January 2022, for example, the producer price index increased by a full 1 percent — the highest in eight months — as the annual inflation rate reached a 40-year peak.

These price increases are having an impact on every part of the supply chain, from producers and manufacturers to distributors and the end consumer. So what can distributors of disposable paper wipes and tissues do to deal with these challenges and communicate with their customers about rising prices? Below, we’ll offer advice on how to navigate these times of inflation and economic uncertainty.

Why Are Prices Increasing Right Now?

The COVID-19 pandemic is undoubtedly the most significant cause of price increases. As companies and countries recover from the pandemic’s devastating economic impact, supply bottlenecks and labor shortages have made it more difficult for manufacturers to source raw materials and build their products.

In June 2021, manufacturers reported the highest one-month price jump in 42 years. For example, in the disposable wiper industry, the price of pulp (an essential raw material) has been increasing — but so too has the price of other elements in the supply chain, such as gasoline, shipping, and packaging. Below is a quick look at how costs have been soaring:

• As of February 2022, wood pulp is at a level of 208.18 in the U.S. Producer Price Index. This is a year-over-year increase of 33 percent from 156 in February 2021.
  
  
• In March 2022, according to a report by the  Wall Street Journal, average U.S. gas prices stood at $4.32 per gallon versus $2.90 per gallon from the previous year.
  
  

• Another  Wall Street Journal  report found that at the end of 2021, U.S. domestic shipping rates by road and rail had increased by 23 percent since 2020.
  
  
• In 2021, the costs of packaging materials such as boxes, stickers, labels, and plastic clamshells increased by anywhere from 2.5 to 15 percent.
  
  

As a result, producers and manufacturers have little option but to raise their prices, creating a “ripple effect” that is passed down through the supply chain to distributors and consumers. Fortunately, many economists believe that these logistical issues will be temporary, although it remains to be seen whether inflation will persist in the long run as the frenzy cools down.

How Distributors Can Manage Higher Supply Prices

Despite the difficulties posed by higher costs across the supply chain, there are a number of ways that distributors of disposable paper products like wipes and tissues can navigate this issue. Below are four of our suggestions for adapting to higher prices:

1. Buying in bulk:  Costs such as packaging, gasoline, shipping, and delivery significantly contribute to price increases. By planning ahead and purchasing in bulk, distributors can keep their total costs lower than if they placed individual orders (for example, buying four pallets of paper towels instead of one).
   
   
2. Adjusting product consumption:  Distributors should work with manufacturers to develop creative ways to adapt their product consumption. For example, if a restaurant has been wiping down tables with heavyweight gauged paper towels, cleaners could switch to medium-grade towels. This would keep the cost of the product relatively stable while still ensuring a successful cleaning job.
   
   
3. Communicating effectively:  Higher prices need to be communicated respectfully and effectively to avoid alienating buyers. Information should be worded practically and matter-of-factly, explaining that the price increases are necessary and not due to distributors simply wanting to increase profits. In addition, distributors should explain any steps they are taking to mitigate or delay the hike in prices, as well as the continued value proposition of your business. News about price increases should be rolled out all at once, rather than in multiple stages, so that distributors minimize the number of difficult conversations with their customers.
   
   
4. Using data and analytics:  When taking significant actions such as adjusting prices, it’s crucial to have a solid business intelligence and analytics program in place. The goal when raising prices should be to maximize profitability while minimizing customer churn. By tracking the right metrics and KPIs (key performance indicators), distributors can ensure that their decision to increase prices does not negatively affect the business.

Conclusion

Dealing with higher supply prices is never easy. Here at Berk International, we’ve managed to delay and minimize price increases as much as possible. Following our tag line of “Intelligent Wiping Solutions” we do not simply offer our customers a higher price, we also offer them alternative products to offset these higher prices and maintain margin all in an effort to ensure that our distributors are properly equipped to handle these increases.

By following the tips above, distributors of disposable paper products will be better positioned to weather the storm of economic turbulence right now and come out intact on the other end.

If you have any questions or issues with how to best navigate the rising price of supplies, it’s always a good idea to reach out to the manufacturer. The manufacturer you choose should be transparent about which prices are increasing, why they’re increasing, and the steps you can take to address the matter.

At Berk, customer service is a paramount concern. Each of our distributors has access to a dedicated account manager who can help with advice and guidance at any step of the way.

Berk International is the leading manufacturer of private-label bulk wipes, tissues, and paper towels in the United States. If you’re interested in joining our team as a distributor,  set up a phone call with us today  to discuss opportunities and get a quote.