Rising costs can create difficulties for traders when it comes to providing quotes to customers. By the time work begins, the cost of materials may be far higher than originally quoted. We’ve put together some advice to help traders communicate effectively with their customers during uncertain times. 

The October Monthly Statistics of Building Materials and Components report, produced by the Department for Business, Energy and Industrial Strategy's (BEIS), showed that every month this year has seen a higher average cost of materials for ‘all work’, compared to last year. All work includes new work (such as new housing) and maintenance and repair, compared to last year. September 2021 saw the highest increase, with costs 23.6% higher than in September 2020.

There are a number of reasons for the cost of materials rising. The increasing cost of gas and electricity has pushed up production costs, while the shortage of lorry drivers has made delivery and logistics more expensive. Uncertainty over Brexit and demand exceeding available supply have also played a part. 

Shortages have been reported for a wide variety of materials, such as concrete, insulation, kitchen carcassing, plumbing parts, steel, bricks, blocks, screws and many other items. 

Clear, consistent communication is essential 

Businesses should be communicating with their customers regularly regarding any price increases, whether it relates to material or labour. For example, customers may be unaware that Brexit has impacted the cost, or created a delay or shortage in materials. If this situation, or any other major event, has impacted a business in any way, they should prove this to the consumer in the form of quotes or invoices from their suppliers. This will ensure that the customer is fully aware of the overall pricing of the job throughout.  

Keeping customers informed helps to maintain strong levels of trust and reduce the likelihood of a trader receiving negative reviews or complaints.

How to explain rising costs in a quote

Traders should be costing a quote on foreseeable costs. If the cost increases, the trader should be discussing with the customer and the contract can be jointly ended if necessary. The cost should not be increased without giving the customer an opportunity to cancel the contract, as the work may now be beyond the customer’s budget.  

If needed, traders can use caveats on quotes to explain what will happen if prices rise as work is carried out. For example, steel and bricks may increase in price, so the Trader can add this to the quote. Simply state that the price may be higher if the price of supplies and shipping costs more. 

Traders should be dating quotes as of the day they are written, and valid for 28 (or XX agreed amount of) days. If anything is due to change after this date, it should be communicated clearly with the customer

If a quote has to be amended, the customer must be informed ahead of time. The higher price should only be implemented once the customer accepts.

Ultimately, traders must be as transparent as possible when quoting for work, and customers need to be mindful that rising costs and shortages are influenced by issues beyond the control of individual traders. Consistent, open communication from both sides is key.  

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