why are some products sometimes more expensive and sometimes cheaper?
It is well known that supply and demand determine the price. But, especially in turbulent times, there are other factors at work. We can illustrate this with the following examples:
👉 Freight costs are incurred for the majority of all products because they come from different regions. For products such as outdoor furniture, freight costs make up a double-digit percentage of the purchase price. To get the best prices, we negotiate freight rates directly with the shipping companies.
👉 Crises such as corona, gas shortages and global warming further influence the price. For example: in the production of glasses, gas consumption accounts for about half of the purchase price. For a wine glass in the cheapest price category, the purchase price has increased by 30 % as a result of rising gas prices.
👉 Reasons for price fluctuations can also be changes in exchange rates. At the end of 2022, the value of the euro against the US dollar fell below 1:1 for a shot while. As of the beginning of 2023, the euro has fortunately recovered and stands at around 1.06 US dollar per euro. To hedge against these fluctuations, we conduct hedging operations, whereby a contract is concluded with the bank in advance to exchange money on a certain date at a fixed rate.
– Food prices in 2022 were 51.2% higher than in the reference periods of 2014 and 2016 (Statista).
– Freight rates in September 2021 were six to seven times higher than before the pandemic (study, source).
– Edible oils such as sunflower oil or rapeseed oil were 102.6 % more expensive in July 2022 compared to the same month of the previous year (Statista).
– Organic food is less affected by inflation: While eggs became 20.6% more expensive in the first half of 2022, the price of organic eggs only increased by 6.3% (Statista).