The inflation impact on moving business

Inflation is something inevitable, and it has happened many times in human history. However, we are currently experiencing the most significant rise in material expenses since 1974. If you are a moving company, whether you’re local or international movers, you should know the moving industry will suffer certain consequences. One of the keys to having a good business is flexibility, which will be crucial when it comes to dealing with the inflation impact on moving business. The stress that comes when your business is struck by a recession is understandable. This is something moving companies can’t control. Luckily there are ways to deal with this and still keep making a profit. And Master Moving Guide will show you how.

What is inflation?

Inflation is an increase in various prices of goods and services in one country. What this actually means is that the cost of living rises. Low inflation rates are beneficial, while high inflation rates signalize a crisis in the economy. Because the economy is in a crisis, and while it may not seem like it at the beginning, it affects all businesses. Things like utilities, food, housing, health, schooling, etc. get more expensive. All material and human resources are dependent on each other. So when flour gets more costly, the bread will too. This same principle also applies to the moving industry.

There are four types of inflation:

• The least impactful one is creeping inflation. This means that prices increase slowly during a longer period of time.
• Walking inflation happens when prices rise from 3% to 10% annually, which is still a relatively low increase.
• With galloping inflation prices are rapidly increasing, as much as 50% monthly, leading to a big economic crisis.
• The last one, also the most extreme is hyperinflation. When hyperinflation happens, the monthly increase is over 50% and can even reach an unbelievable 1000% increase in a year.

The inflation impact on moving trends

Statistics have shown that during an economic crisis, people are relocating a lot less than usual. Therefore, finding customers for moving companies can be more difficult. This is due to the fact that housing and moving are becoming more expensive over the years. People are opting for staying in a familiar environment. If they choose to relocate, they are less likely to hire a mover, and more likely to try to cut costs by moving by themselves.

The inflation impact on moving business material costs

Moving companies are facing a big problem since material resources are getting really expensive. Since there are fewer goods available their value is going up, and therefore the prices are on the rise. This can make buying them really costly and unsustainable. Looking at the moving costs checklist shows an increase in prices, and the only way for business owners to keep profiting is by raising prices. As prices are raised it is harder to get customers, since higher expenses can make more people turn to DIY relocation. Additionally, owners of new moving companies can have a hard time drawing clients, as they are yet to build a reputation as a trustworthy company.

Shortage of moving supplies due to inflation

One of the many problems with inflation is the shortage of supplies. In order to execute a professional move, no matter whether you are local or international movers, you need a lot of quality moving supplies. The problem occurs when there is a higher demand than the offer. With not enough supplies available, it can happen that your business isn’t able to obtain enough materials to provide full services moving. This primarily occurs due to a shortage of resources needed for making moving supplies.

You may need to increase wages which leads to a profit decrease

Some of the best moving companies need a team of professionals to provide quality relocation. Since the cost of living has increased, many workers are going to ask for a raise. This will have a negative impact on your profit, especially noticeable during a time when every other resource is also getting more expensive. You have to be prepared for potentially losing staff members. In order to offer satisfactory service you will need enough staff, so increasing wages may be inevitable for your business to survive.

You could raise your prices to deal with the inflation impact on the relocation business

The key to keeping your moving business alive during inflation is to make a sustainable profit. Since it is much more expensive to execute a relocation, it is inevitable that you have to raise your prices. The cost of moving supplies and workforce will have a negative impact on your company unless you start charging more for your services. About 82% percent of business owners reported having to increase prices since the pandemic. The upside is your competition will have to charge more too, so when a potential client wants to compare moving quotes, your moving company won’t be the only one that raised prices. However, make sure to not overcharge and take advantage of the crisis as it may steer away your customers, and have a negative effect on your business.

Try to cut all unnecessary expenses

Another good option to reduce the inflation impact on your moving business is to review all supplies you use. Take a detailed inventory and try to think if there is anything you could relocate without. Also, instead of cutting down on supplies, sometimes there are cheaper alternatives to consider. If you manage to cut business expenses this way it can help you to retain your old pricing and still gain a profit.

All in all, the inflation impact on moving business is big but manageable. It is important to believe in your business but also make a detailed plan on how to proceed. You can always overcome any obstacles, and additionally, people will always need movers, even during an economic crisis!