3 Factors That New Steel Business Owners Should Consider for Boosting Sales
Posted on: 24 January 2018
Steel is used in many industries in Australia. According to experts, several sectors will see growth over the next couple of years—for instance, in non-residential building, infrastructure and the specialty steel products sector. If you own a steel supply business, then you need to take advantage of the projected developments. However, you have to be strategic and take precautions when operating a steel supply business because the price of steel is volatile. This article highlights factors that need to be considered when running a steel supply business to boost steel sales.
Time of Year -- When ordering steel metal from manufacturers, the time of year a business places its order is critical to pricing. Steel prices fluctuate depending on several factors, such as shipping patterns. For instance, delivery of steel to your business might be delayed because of impassable shipping routes. If the price of steel goes down during such delays, then your company risks making a loss since you would be forced to sell below the initial market price. Additionally, there are times during the year when demand for steel will either go up or down. Understanding such fluctuations can help to make strategic purchase and pricing decisions that affect the bottom line. Therefore, before commencing operations in your new steel supply outlet, make sure that you discern business trends. The information is readily available in industry periodicals.
Cost of Iron Ore -- As you know, iron ore is a fundamental ingredient in the production of steel metal. Therefore, it goes without saying that the value of iron pretty much affects the price of steel products; hence, there is a need to keep track of iron ore mining trends. If, in the course of running your new business, you get information that there might be a shortage of iron ore, then that is a sign that you need to stock up on steel. If you wait until the supply of iron ore drops, you might get caught up in haggling battles with suppliers. Eventually, you will pay more due to low supply, thereby forcing you to increase the price of your steel products, which will lower sales volume.
Current Energy Costs -- Smelting iron ore and scrap metal to produce steel requires a lot of energy. As such, it is essential to research energy demands and costs of manufacturing steel. If the cost of energy increases, the cost of producing steel will equally go up. The converse is also true. Usually, industry periodicals and government reports have information on projected energy costs as well as legislation affecting energy costs. To drive sales from the onset, make sure that you buy steel only when energy costs are favourable.
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