IE
Since the start of Covid, I’ve written more blog posts and sent out more letters to customers about price rises and surcharges than I would ever have wanted to do.
The most recent letter was at the end of October advising of an invoice surcharge coming into effect on 1 December, which reflected not just our rising commodity and energy costs but the decline in value of the GBP against the USD.
I know there are some in the market who still like to claim that suppliers are quick to impose and increase surcharges but much slower to remove or reduce them. But it is worth remembering that Mila reduced our ocean freight surcharge from 7 to 4% in July last year and then reduced it further from 4 to 3% in December as freight costs continued to fall from the peaks of 21/22. We will also be reviewing the total surcharge again on 1 March to reflect the 3-month average USD rates as the UK economy hopefully stabilises.
Mila’s position throughout these turbulent times has always been to be honest and upfront about our costs and completely transparent about how much of those we can absorb while maintaining investment and service levels.
We took the decision to absorb the £1m extra we spent on airfreight in 2021 getting stock to customers, because we felt that was the right thing to do in those extraordinary times; but we can’t simply write off ongoing increases in costs without there being a negative impact on the things that Mila customers really value – from our new product design and development to our sales and marketing support and even our next day delivery.
As a business we are focused on efficiency, but the currency market remains volatile – especially the price of the Chinese Yuan against the USD, so it is very difficult to predict what the next 12 months will look like. I can only make the promise that, when it comes to calculating and communicating how we pass on both rising and falling costs, Mila will act with integrity at all times.
Richard
