Fuel Costs Down Means Lower Prices Right?

We are consistently seeing oil prices drop, which is good for the consumer, but has not benefitted the fence industry in regards to pricing. As a business owner, one would think you would see the benefits of oil costs coming down in the fencing industry. Our suppliers are quick to hand out price increases every time oil increases. We frequently receive letters stating a 6-10% increase in material costs due to oil price increases. So we should naturally see the same when oil prices drop? Not! I have not seen any of those letters about cost decreases due to oil prices decreasing. I guess the old business principle still applies: supply and demand. Maybe if demand were to decrease, we would see prices decrease. That’s the only way distributors will lower their prices. In the mean time, we can enjoy lower costs on our end due to oil price dercreases.

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