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Raw Material Costs on the Rise

April 21, 2011
By

Some might say, “So What, Angie? I am not a manufacturer, this will not impact me!”

Ahhh,… not so! It impacts everyone, even in places you weren’t expecting! Let me share with you a quick snapshot of some of the manufacturing landscape and how it might impact your bottom line.

Raw materials are the components purchased from all over the globe that enable manufacturers to create and produce the items we use everyday. It is a delicate balance that industry strikes when it comes to manufacturing goods while remaining competitively priced for the finished goods. In the last quarter, there have been some tell tale signs that some of the items commonly used in the Massage industry may become a bit more pricey, or worse yet, unavailable entirely. This can impact you and your practice in a few ways. Below are a couple of things you may begin to see in the marketplace.

The Argentinean Jojoba crops, which are a significant percentage of the world jojoba crops, were damaged by frost this year. Ordinarily, one might expect the plants to bounce back and thrive, albeit a bit later than usual. Unfortunately for us, the frost hit at a crucial time in the growth cycle of the plant, damaging it at the seed pod level. Once they sustained freeze damage, many of the soon-to-be-plants died. This loss was unrecoverable, and thus the price for Raw Jojoba Oil has skyrocketed. This has been reported to be a temporary situation, but it can likely impact product production nationwide.

Many massage lubricants depend on Jojoba, as it is a magnificent product for the skin, and a go-to ingredient for formulators. You may begin to see some goods temporarily discontinued, and for those remaining on the market, you could in fact see a slight price increase. This is the nature of business when you manufacture goods and depend on crops for your raw ingredients. My advice, buy jojoba now, especially if you love to use pure jojoba oil. Given the shelf life is years and years as long as it is stored properly, it is a good buy that will keep well.

Mother Nature impacts us in many ways and it extends to the world cotton supply as well. The cost of cotton has been on a steady increase over the last three years, varying from $.40 cents per pound to over $1.89 for completely raw goods. How does this impact the Massage and Spa industry? ALL OVER! From the spa slippers, to the robes, towels, hand cloths, and above all, SHEETS! These items are all pricier now than ever before to manufacture, and I have watched the market creep up slowly in terms of price to the end user.

One market that we may potentially see increase in the coming quarters may be foam production. With the unrest in the Middle East, and oil prices moving the full gamut to even exceed $5.00 per gallon some experts predict, we can almost assuredly expect the costs of foam to rise. This is in tables, bolsters, chairs, stools, and more. A great alternative may be soy foam in some applications, thus reducing the dependency on petroleum as a raw product.

Which brings us to oil… Oil is fluctuating at the time of this post by 2-3 dollars a gallon day by day. This means increased prices for gasoline which impacts a mobile therapist in obvious ways, as your costs for fuel to run your business is going up. But it also impacts your shipping costs for anything your purchase as well. From the grocery store, to the big-box retailers, everyone is sustaining rising shipping costs. No one is immune to this cost increase, with added fuel surcharges being assessed with each shipment of goods to distribution centers and retail outlets, it is a cost that will in many cases be felt by the end user. With this in mind, you can save some money by planning your purchases biweekly and in greater bulk. This can reduce the usage of fuel, and the need for repeated deliveries.

The world is a series of interconnected happenings that singly may not seem to Amount to a hill of beans, but when you dig into the far reaching implications as well as examine how these implications could impact you personally, you begin to see the world as it is…A living and breathing thing we all depend on in ways we may never have even considered before.

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2 Responses to Raw Material Costs on the Rise

  1. [...] Find more articles by Angie Patrick at Massage Today. [...]

  2. Keri Randall on April 21, 2011 at 5:20 PM

    Thank you for sharing this information.  It is important to plan ahead when we can!

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