Invacare increases prices; will others follow?
ELYRIA, Ohio - Product prices are going up at Invacare. In a May 9 letter to its customers, Invacare wrote that because of global economic pressures "our freight fuel charge will increase from $14.95 to $24.95 on June 1, 2008. In addition, Invacare will have to increase prices for select HME products and parts effective July 1, 2008."
At press time Friday, it was uncertain if other prominent HME manufacturers also plan price increases, but the chance of them doing so is not out of the question.
Earlier this year, Ken Spett, Graham-Field's vice president of global marketing, told HME News: "This is not the year that prices are going down." In another interview, Drive Medical CEO Harvey Diamond, pointing to the escalating cost of raw materials and fuel, said much the same thing.
"Anyone today that tells you prices are not going up is not telling you the truth," Diamond said. "It's unfortunate that at the same time as competitive bidding that these elements are causing prices to increase. We are keeping our fingers crossed that it will get better. I believe it will level off; the question is when."
At the start of 2008, Invacare, Sunrise Medical, Drive and Graham-Field all raised their prices by at least 1% to 4%.
Here's the text of the May 9 letter Invacare sent to its customers:
Dear Invacare Partner:
The global economy is experiencing profound pressures from the ever-rising costs of raw materials, fuel and other commodities while the value of the US dollar continues to decline (minus 10% versus yuan). The impact of these pressures affects individuals and their households, as well as nearly every business and industry, including Invacare and the home medical equipment (HME) industry.
Thus far in 2008, the cost of steel has increased 89%, aluminum 18%, copper 30%, and lead 150%, and that's on top of the double-digit increases experienced in 2007. Today, diesel fuel is over $4.00 a gallon, while gasoline is averaging more than $3.50 a gallon--a 50% and 63% increase respectively from just a year ago.
To remain competitive in these challenging times, Invacare has implemented numerous cost-reduction strategies across all of its businesses and throughout the entire supply chain. While these cost reduction strategies have benefited both you, our valued providers, and our company, the current
global economic pressures continue unabated. As a result, our freight fuel charge will increase from $14.95 to $24.95 on June 1, 2008. In addition, Invacare will have to increase prices for select HME products and parts effective July 1, 2008. More detail will be communicated to you within the next 30 days.
Knowing that our success depends on your success, Invacare has and will continue to invest in programs such as Invacare(R) Xpress, Invacare(R) 5 Star Service Plan and Bonafide software solutions with more services to come, including accreditation, competitive bidding and HME business-building
consultation services. As you re-evaluate your business model, these programs can help you find solutions to reduce your operating costs, which will enable you to continue to serve your patients and at the same time enjoy a healthy business. Contact your Territory Business Manager for more
As always, thank you for your continued support of Invacare.