Pricing Garage Doors According to the Market

 

Have you ever wondered what determines the price of the products sold by your garage door repair company? At the end of the day, it comes down to the market itself. It even spans back into ancient history, where the way that their money was managed influences the way that prices are set today in modern life. Below, you'll find a few key points to help you understand the pricing of the garage doors and the garage door repair industry from a larger perspective.

The United States and the Gold Standard

To begin, it is important to look at the standard currency that is currently used to set the price for things like garage door repair services, garage door installations and even actual products such as garage door openers. To do so, understanding the dollar and why it has the worth that it does is crucial.

Anyone who has paid attention to economic history and inflation is sure to notice that the dollar doesn't go as far as it once did. It has lost around 99 percent of its buying power since the USA first introduced the gold standard in the 1910s. In 1913, the dollar began to decline. The United States Federal Reserve was established in response to the financial crisis of 1907. This was instituted in order to keep control of the United States' monetary policy.

Through its creation, the USA kept a better hold of the economy which led to rapid growth throughout the country during the following decade. All of this came to a stop in 1927 during the market crash and the ensuing Great Depression. In order to remove power from precious metals to the dollar, President Roosevelt had removed the United States from the gold standard, which meant the fall of buying power of the US dollar and a hike in the price of gold.

After departing the gold standard, the USA has since used its currency to create various stimulus programs and monetize government debt. Despite some of its positive effects, this move has also continued to decrease the value of the dollar.

How Is This Relevant to Garage Door Pricing?

Many things go into producing garage doors and openers. This includes the raw materials that are used to manufacture them, including wood, aluminum and steel. It also references the cost of transportation, as well as the price of labor that comes with actually designing and making the doors. Furthermore, factors like marketing and logistics as well as installation, support and servicing also contribute to the cost and are measured in US dollars. As the dollar value continues to decline, the pricing of garage doors, the cost of repairing garage doors, as well as aspects such as transportation and raw materials, get higher.

Gaps in Productivity and Wages

Since the 1980s, there has been a sharp increase in the split between wages and worker productivity. This means that while businesses are more productive than they've ever been, the wages that are paid for the labor have not caught up to such productivity. Wages are only up 17.5 percent while productivity has risen to 60 percent.

The dramatic increase in such productivity is largely owed to the computerization and automation of many jobs. For example, an automotive worker can use a robot to install vehicular parts, while before the 1980s, the same job would be manually completed by the worker. Such automation lets businesses elevate their productivity levels without the need to pay their employees more.

What Does This Mean for Your Garage Door Company?

Because of the wage gap, your business is able to gain greater levels of productivity without having to pay your employees anything higher in wages. As you can imagine, if you are thinking this way about your company, other businesses are doing the same. Because of this, wages cannot possibly keep up with inflation, meaning trying to get a good price on your garage doors while remaining in high-profit margins is difficult.

While it seems that productivity isn't going to lessen in the near future, more and more workers are refusing to work for such low wages for all of the productivity. The large labor shortage isn't doing anything to help the pricing of garage doors or in any other industry for that matter. Slowly but surely, it seems that wages are beginning to increase, but if history has shown anything, it's that these things take time. However, it seems like wages are slowly starting to raise to eventually meet the current productivity and inflation levels.

For this reason, and due to industry supply shortage, you can expect that the prices of garage doors, garage door openers and even garage door repair and installations  services are going to raise as well. Now that you are familiar with the mechanics behind it all, you can better price your garage door repair services and products in order to stay ahead of the curve.