Articles

FACTORS INFLUENCING LABEL MANUFACTURERS PRICING


Have you ever wondered why the price of labels seems to change occasionally? What forces are at play? Many label buyers wonder what goes into the label manufacturers decisions to adjust prices up or down.

Of course, basic supply and demand issues are at the core of the matter. More labels on the market and less demand will force a price drop. Fewer label manufacturers and higher demand will fuel price increases. However, there are some factors underlying those obvious considerations that can have a massive impact on price fluctuations.

The most important of these considerations is what label manufacturers are paying for stock. Changes in the global wood pulp market, for instance, can have substantial impacts on prices. If paper costs more, and paper is the backbone of labelling, label manufacturers have to increase prices or find other ways of maximizing efficiency to counter it.

Another example of an outside expense is the going price of oil. Oil may seem unrelated to what label manufacturers do, but in reality is quite critical. The foils featured on many decorative labels, for instance, are derived from petroleum. Even more importantly, shipping costs for raw materials are dictated, in large measure, by the going price of fuel. As gas prices rise with upward price movement for oil, so do shipping costs. Those expenses are often passed onto consumers.

If wood pulp prices or oil prices drop, on the other hand, label manufacturers can lower prices. Likewise, improved efficiencies and technological advances on the part of label manufacturers can also cause a price dip.

As in any business, the label industry’s pricing is affected by many different variables. Label manufacturers don’t set prices based on whims; they do so in reaction to many different market forces.

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