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The Shaughnessy Report: Tune Up Your Pricing Strategies

If you’re a fabricator, these are challenging days. But there are also plenty of opportunities available—if you know when to embrace them.

Sure, margins are still non-existent. Sometimes you feel like you’re just trying to keep the lights on. But your suppliers have sent you an email explaining why their prices are going up—it’s because everything is going up—and now you feel like you’re stuck between a rock and a hard place.

But contrary to popular belief, fabricators are in a strong position right now. There are less than 300 fabricators in North America, and companies are always willing to pay for a quality, reliable PCB. Washington is even singing our industry’s praises—for now.

So, it’s time to raise your prices. In fact, if you don’t raise your prices now, you’re missing out. This is your chance. Actually, you should have raised your prices a year ago, right? You’ve been eating your suppliers’ increases for a while, and trying make your process even more efficient. But Tony Soprano once said, “It is what it is.”

None of your good customers are going to bolt. They’re not going to ask you to open your books or try to tell you how to run your business. Your customers are driving past astronomical gas prices every day, so they’re going to understand when you hit them up for a few more dollars.

You won’t be lying when you say, “I don’t have a choice.” A few customers might complain at first, but they read the news. The cost of everything is going up: gas, shipping, laminates, adhesives, and components. Even labor—when you can find it—it’s all going up.

So, now is your chance. If you do this right, you won’t wreck the relationships you’ve spent years building with your customers. They’ve probably already worked this into their budgets; they may be wondering why you waited so long to pull the trigger.

Of course, this is no reason to celebrate. You won’t be able to increase your prices to the point of making major profits, but at least you’ll be able to claw back a little bit of what you’ve been losing over the past few years. God knows you’re going to try to keep from raising them too much, so you don’t run them off.

Pricing is a job that you must pay attention to constantly. It takes communication up and down the supply chain in a way that we've never had before. You’ll have to work with your sales team and develop a few strategies for price increases. But unlike any other time in recent history, your customers aren’t likely to threaten to jump ship, because your competitors are all raising their rates too.  

Yes, fabricators are in a strong position right now. So, in this issue of PCB007 Magazine, our expert contributors will explain how to recalculate your pricing strategies, tune up your sales team and sales processes, and square up your margins.

We start with an interview with Prototron Circuits President Dave Ryder and columnist Dan Beaulieu, who discuss pricing strategies for the current environment and tips for your sales team to remember when they’re delivering unpleasant news to a customer. Then, James Hofer of Accurate Circuit Engineering explains how he’s dealing with rising costs, and why offering cutting-edge technology can help a fabricator weather this storm. Ventec’s Alun Morgan shares his views on the price squeeze from a macro level, and he explains why the supply chain issue should improve, but not go away entirely, by the end of the year. Columnist Michael Carano gets down to the nuts and bolts of price increases, and he makes the case for cooperating with competitors for the greater good of the industry, much like the Space Race of the 1960s. And Carey Burkett of Flexible Circuit Technologies focuses on the economics of the flexible side of things, including rigid-flex, and FCT’s plans for growth.

We also have stellar columns from Chris Bonsell, Hannah Nelson, Todd Kolmodin, and Happy Holden.

It’s almost trade show season, and I’m ready to get back on the road. Until then, see you next month.

This column originally appeared in the August 2022 issue of Design007 Magazine.