Normal price inflation
Traditionally, prices for pool products–like chemicals–generally increase slowly, and stay at or below the US Dollar inflation rate. When manufacturing costs increase, they are not always carried on to the consumer each year, as most companies do not like raising their prices every single year. Increases may be every other year, and usually just a couple of percentage points. Pool service companies have also absorbed these small price increases without raising rates to homeowners, often because the price increases are small and not always noticed. Yet inflation is part of doing business, and we all must adapt to it.
With everyone stuck at home, the residential pool business surged. Demand for new pools, renovations, heaters and other upgraded equipment reached an all-time high. Along with more pools being built came a longer season. Longer seasons mean more chlorine and other chemical usage too. The demand for just about everything related to backyard pools skyrocketed this year. This put stress on manufacturers to over-deliver during already-stressed times.
Coronavirus has fundamentally changed the manufacturing business at almost every level. From bottle lids to raw materials, delays and shortages have plagued every industry. Unless you manufacture hand sanitizer, cleaning spray or personal protective equipment (PPE) like face masks, many manufacturing facilities have put non-essential items on the back burner. This is not specific to just the pool industry. This is across the entire global economy. Coronavirus shifted everyone's priorities.
With increased demand and back-orders come increased costs for components. Again, think lids, bottles, labels, cardboard boxes, and even pallets.
Another aspect of the manufacturing issue has been the new safety protocol in place. Social distancing, PPE, plexiglass dividers, and disinfection practices have not only slowed down productivity, they have raised the cost of doing business. We see it everywhere we go: restaurants, grocery stores, airplanes, the gym, etc.. The amount of disinfectant wipes and spray is too much to quantify, and it all costs money. So all of us have to pay for that added cost of doing business. It trickles down. When factories have less people working together, they cannot produce goods as quickly or efficiently.
We want to reiterate that this is not a pool industry problem–this is affecting every industry and every level.
Shipping companies are also much more expensive than usual. Not only are their distribution centers backed up because of social distancing and safety protocol, but the delays build upon other delays. In March 2020, some of the ports were closed, which backed up shipments from overseas, and it has continued to back up the supply chain. We were waiting more than six months to get things that should have taken only a couple of weeks.
Even if the products you were waiting for are made her, some of the internal components may be from overseas. For instance, a type of fitting or valve inside a motor could be made in Taiwan, and therefore the product you're trying to buy is unable to be completed and sent to you. This happened in the pool business with all sorts of products, from heaters to kids pool toys. Unfortunately, there was not much any of us could do to alleviate the pressure.
But one thing is for certain: prices have gone up. Which brings us to the major pool-specific event of 2020, which actually had nothing to do with COVID-19.
Adaptation and alternatives
With such a chlorine shortage, we view this crisis as an opportunity to evolve as an industry. It's a chance to improve and modernize our practices on how we treat swimming pool water.
The world changed rapidly in 2020, and we all have to adapt. Unfortunately, at least until things return to normal (hopefully), prices will be much higher than normal as a consequence.
Between manufacturing shortages, health and safety protocols and shipping delays, costs in all aspects of the supply chain are higher than ever thanks to COVID-19. This is not just in the pool business, it's pretty much the entire global economy.
As they say on the news, we're all in this together, and we wrote this article today because it's the reality we are facing in our industry.
So if your pool service company has to raise prices in 2022=1 (or late 2022), we hope this article adequately explains why. They simply do not have a choice if they want to remain in business.