Contractors and other manufacturers of everyday home appliances are set to start deliveries next Thursday, but the deliveries aren’t expected to be as extensive as some of the others, which will include appliances such as dishwashers, refrigerators and dryers.
Manufacturers have said they will make up to 300 deliveries per day.
The deliveries are the first of a series of scheduled sales beginning in the second quarter.
In the past, contractors have sold some of their appliances to other manufacturers and resellers.
While the average cost per appliance has been relatively low in recent years, some manufacturers have struggled to make a profit from selling their products, particularly in the last several years.
“The current contract market has created an industry that has become very, very expensive,” said Andrew Bader, senior vice president at the National Contractors Association, the trade group representing the nation’s contract manufacturers.
“If we continue to allow this trend to continue, the only way we are going to continue to be competitive is if we have more product.”
The contract prices for appliances have increased more than 15 percent in recent months.
Some manufacturers have said that if they don’t make a return on their investments in their products by the end of the year, they might consider switching to contract manufacturing.
Companies such as J.C. Penney and Target have already said they plan to make contract appliances available through contract sales.
Bader said it’s important that manufacturers do not sell off their inventory if they are not profitable.
For instance, if a manufacturer has $5 million in inventory and it’s profitable, but it’s not profitable, then it is not going to sell the same inventory to other suppliers,” Bader said.
Even if manufacturers don’t have to sell their products directly to other buyers, they could face competition from suppliers that sell directly to consumers.
If the prices for the same products aren’t as competitive as they were a year ago, the companies could also see an opportunity to raise prices to drive more consumers into contract buying, Bader added.