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In 1995, you could walk out of an appliance store with a microwave for about $200. It’s hard to believe that, until recently, appliances were still in the same price range. That’s because competition and outsourcing of parts allowed companies to only minimally increase prices over the last three decades or so. Now, for the first time in about 30 years, you’ll notice a significant change in appliance pricing — and a lack of supply. We’ll break down the reasons why, and what you can do about it.
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Why Are Appliance Prices Going Up?
It’s difficult to find an area of our lives that COVID-19 hasn’t affected. The pandemic is also the reason appliance prices are going up. To start, manufacturers are facing significant increases for input materials (think aluminum and stainless steel). Naturally, when production costs go up, it trickles down to you. Overall, manufacturing’s rising costs are impacting big-ticket items like refrigerators, freezers, dishwashers, and washers and dryers.
Beyond directly affecting production, the price of transporting everything — including home appliances — has also increased.
So how much more can you expect to pay? It depends on your preferred brand and what product you want to buy, and since manufacturers set the retail price in most cases, you can expect to see the increased cost on many appliances no matter which retailer you go to.
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Where’s My Appliance? How Supply Chain Issues and Global Microchip Shortages Are Causing Delays
If you’re on the market for a new appliance, you’ll also be up against a stock shortage. Again, COVID-19 is the culprit causing those “out of stock” messages you may have spotted when you’ve browsed for appliances.
Supply chain issues started in China — a country that’s home to many parts manufacturers — more than a year ago. Then, as the pandemic spread, it impacted America’s Midwest and Southern states, where appliances are also manufactured. Mexico, another major parts supplier, has also been affected. Social distancing protocols reduced efficiency and production output in factories and warehouses around the world.
Production is starting to ramp up again, but there’s another bottleneck in the supply chain to getting appliances from the manufacturers to your home: shipping containers. As exports begin to pick up, products are filling shipping containers faster than they can be transported, causing backlogs that then contribute to increased cost and longer wait times.
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What you may find surprising is the appliance stock shortage is linked to the global computer chip shortage as well. Microchips probably don’t come to mind right away when you consider washers and dryers or microwaves, but nearly all appliances contain them. Various reasons contributed to the global chip shortage, but the U.S.-China trade war started it and the pandemic escalated it. Plus, we use computer chips in so many areas of our lives — from smart phones and smart cars to smart appliances — that demand for them is great. That shortage is now starting to ripple though the appliance supply chain, and it’s pushing back production on many items.
The final piece of the appliance stock shortage puzzle is a demand for home appliances. If you’ve worked from home since the pandemic hit, you’ve likely used your appliances more or maybe you even took a closer look at them and considered upgrading. When you did, you may have noticed delivery delay messages. COVID-19 has resulted in shipping issues, which were further heightened by the Suez Canal blockage in March. Manufacturers are not exempt from those delays.
Appliance supply chains were not designed to quickly recover. In fact, the supply chain is close to a year by the time a manufacturer places an order with a supplier, receives the parts and makes a product. That means appliances will continue to be out of stock, back orders will be lengthy, and you may not experience better pricing until as late as spring 2023.
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Overcoming the Appliance Price Increases and Shortages of 2021
If you’re thinking of buying appliances in the near future, now might be a good time to make your purchase. Trail’s Product Experts can work with you to find the right appliance and package for you. They can advise you on when price increases go into effect, and help you save more with manufacturer promos.
Realistic expectations will go a long way when appliance shopping in 2021 and beyond. Are you really set on your dream appliance? If so, be aware that you may have to wait. An item’s in-stock status can shift depending on the manufacturer’s ability to make and ship their appliances.
If you aren’t dead set on the appliance you want, you can choose from thousands of our in-stock products and get it into your home quickly. Even if you’re keen on a particular appliance, we can help you find something similar if the item you’re looking for isn’t immediately available. And once you have your new home appliance, you will be set for years to come.
