Get On Board

Funny, but it seems that while patience is a virtue, panic must be a rule. To support this statement, lets look at some of the roller coaster-like price changes of recent history, and the often panicked response to them.

If you went back 18-20 months, there was significant concern about rising steel prices. The steel supply, which was strained from increased construction here and throughout Asia, could not keep pace with market demands. As a result, many of the tools you now own came at a higher cost to the manufacturer, and may have been the result of double and triple-sourcing steel. About a year ago, prices began to fall as supply caught up with demand. Some suppliers, however, are still sitting on twice as much steel as they would normally have in their inventory.

Last summer it was refrigerant. After two seasons of relatively low temperatures, the cyclical nature of things provided a greater number of hot days. The result was more A/C work for you and your shop. The bad news was that after two years of limited demands, the entire country was in need of refrigerant. So, there was a predictable rush on product, and suppliers couldn't keep pace. Now, six months after prices shot off the chart, refrigerant has settled down to a more palatable cost. As was the case with steel, the price point has been established at a higher benchmark, but it still allows for a profit margin that shouldn't threaten your business's viability, regardless of what the alarmists may have thought when they began buying in bulk.

This build-up is to address gas prices, and the effect they can have on your car counts, and consumer spending in general. They rose frighteningly quick late last summer, then began to drop before another recent increase. My guess is that they will continue to rise before the effects of a mild winter bring oil prices down in time for the summer driving season. So don't panic, and remember the opportunity higher fuel costs provide in terms of services targeted at better gas mileage.

The cyclical and self-recovering nature of a capitalist economy can be a wonderful thing ... if you're patient.

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