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Latex International Has New Pricing Policy
May 18,
2011 by in UnCategorized 
By Home Furnishings Business in Mattresses on May 19, 2011
Mattress and pillow maker Latex International has announced a new pricing policy that it says offers more transparency on the impact of raw material cost increases.
Instead of following what it called "the traditionally cloaked manner in which manufacturers pass along raw material price increases," Latex International will hold its base pricing of products steady, but would start adding a "surcharge" line on its invoices beginning June 1st to reflect the ups and downs of latex on the world market.
The formula will calculate the weight of the product and multiplying it by the increased raw material cost. For example, a queen-size, one-inch, 24 ILD topper translates to 9.7 pounds multiplied by an increase of 25-cents a pound, resulting in a $2.43 surcharge for the product. The actual amount of the surcharge will be calculated on the last working day of the month and then reflective in the next months invoicing, whether higher or lower.
"Since February, natural latex pricing has increased by 31 percent and SBR (synthetic latex) is up 21 percent. At this time, weve chosen not to pass on a traditional price increase, but will instead be applying a latex surcharge, based solely on cost increases, for all shipments on a line item basis, from June 1st," said Latex International President and CEO Dave Fisher. "We do this with great reluctance, but we feel this option is in the best interest for both parties. This surcharge will minimize the impact to your business and be based on actual increases or decreases. We cannot control or predict world-wide commodity fluctuations. Without this surcharge we would have to pass on continued price increases each quarter, based on our margin requirements and forecasted raw material increases. We will update the 'latex surcharge' on a monthly basis which will be clearly communicated on each invoice and order acknowledgement for our customers."