APC Hikes Prices As Cost Of Lead Rises
Solution providers should expect price hikes to range from a two-to-five-percent bump for UPSes to a 10-20 percent rise on replacement batteries and battery systems. APC says it will honor project pricing for partners specializing in build-to-order custom projects.
The company attributes the hike as a response to rising lead costs the company says it can no longer absorb. Scott Olsen, chief pricing officer for APC, says rising lead demand in China, a lead mine closure in Australia, and other macroeconomic factors contributed to the skyrocketing cost of lead. "Prices went from $1,000 a ton less than a year ago to $3,400 a ton," Olsen says. "We've been working with our suppliers to mitigate that cost but there's only so long you can delay the inevitable."
"We expect prices to stabilize within the next 6 to 12 months, but it's unknown whether prices will go up or down, based commodities market does," he cautions. Olsen defended his company's decision to raise prices. "We're doing anything we can to mitigate [rising lead costs], including talking to our suppliers for other cost savings," he says. "We've been trying to communicate that it's an unfortunate reality that commodities are increasing."
Partners specializing in build-to-order custom projects like data center UPSs' are less susceptible to the fluctuations of the commodities market as specialized components are bought on the open market. "For those partners, essentially they can lock in pricing," he says.
Steven Miller, CEO of San Francisco-based Pacific Voice and Data, a solution provider who specializes in custom projects, says his company does what it can to pass the discounts they receive to their customers in an effort to mitigate the effects of a price hike. "Because of the custom nature of the solutions provided, these changes become a smaller and smaller component of the overall solution, so it doesn't affect us that much," he says. "It's usually a larger solution, it tends not to have as large an impact."
Miller also noted APC notified the company far in advance of the price hike. "We had letters coming to us as soon as they knew the price changes would be taking place," he says. "It gave us the ability to go out and tell our customers a sales hike was coming."