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Omaha Magazine

Roundtable: Costs on the Rise

Jan 25, 2023 12:23PM ● By Linda Persigehl
Russ Locke, Rick Ledwich, and Ashly Neneman

Photos Provided. 

Just as private consumers are feeling the pain of higher prices, small businesses are struggling with inflation, which continues to hover around 7 percent. Supply costs, energy and shipping costs, and employee wages are all up in a wide breadth of industries, with seemingly no end to rising prices in sight. We asked leaders with three local small companies how they are being impacted by rising costs, and the ways they are responding. They include:  Russ Locke, owner of Omaha Mail; Rick Ledwich, operating partner with Zio’s Pizza; and Ashly Neneman, general manager of  Sun Valley Landscaping.

B2B:  Tell us about your business. Who are your customers? 

Locke: We mail invoices, newsletters, calendars, Christmas cards, postcard advertising, political advertising, catalogs…anything that mails to 200 or more addresses (that’s the point the U.S. Post Office gives postage breaks). Our primary customers are printers, churches, hospitals, Realtors, engineering firms, roofers, trash collectors, HVAC companies, designers, etc. I’ve been in 
business 23 years.

Ledwich:  Zio’s Pizza has been an Omaha pizzeria for more than 36 years. We strive to put out the best New York-style pizza in Omaha, along with calzones, pastas, salads, and wings.  We currently have four locations, with the most recent opening in 2018.  

Neneman: Sun Valley Landscaping has been doing business in the Omaha community for 28 years. We specialize in commercial and residential landscape maintenance, design-build, and snow removal. We also have a landscape supply yard that spans over 5-acres, located at 5601 Harrison St. Our customers are busy professionals that highly value their outdoor space and curb appeal. Most of our commercial customers manage or own class A commercial buildings, and they rely on our high-quality customer service and craftsmanship to make their property stand out from the rest.

B2B:  In what ways is inflation impacting your business? (energy costs, raw materials’ costs, shipping costs, etc.)

Locke: Inflation has affected shipping costs of supplies, and the cost of supplies themselves. Envelope costs are up 50% or more. Paper and 3-part forms are up 40–60 %. In addition, supply chain issues due to COVID mean it can take weeks, instead of days, to receive supplies. As a result, we’ve chosen to search out used or refurbished equipment instead of leasing or buying new.

Ledwich:  Costs have increased throughout the year and continue with roller coaster affects. One minute you see dairy stabilizing, the next you see cheese increase by 20-26% and then come back down again. We were at all-time-highs for mozzarella in the summer. Eggs were at an all-time-high, then also came down and now are on the rise again. Proteins (meat toppings) and wings have seen prices skyrocket this past year. A cost analysis is done monthly on all food, paper, and alcohol. We’ve had several months that 90% of items we use for pizza, paper goods, and cleaning supplies have gone up 10-12% overall. Unfortunately, many things have stabilized at the new higher prices, and we do not see these costs ever come back down again.  

Neneman:  We ship in natural stone and bulk landscape supplies from all over the country, and we have seen about a 10-15% increase in shipping costs alone. We have also experienced a 5-15% cost increase in vehicles, equipment, and parts. One of the biggest hikes that is affecting us is the cost of fertilizer, which has increased over 35% in the past 12 months.

B2B: What steps have you had to take cover the additional costs? (raise fees/prices of goods to your customers; go with alternative raw materials; cut expenses in other areas of the business, etc.)

Locke: I’ve talked my customers into less expensive ways to communicate with their customers. In the mail business, size does matter. I try to talk them into smaller formats, i.e. letter-sized mailings over flats (newsletters, etc.). Or to put personalized letters into window envelopes, instead of hand matching, to save them time and production costs. Otherwise, I’m forced to pass cost increases onto customers.

Ledwich: We have taken steps to raise some prices. And we will introduce some items that are “food cost favorable” to us in 2023. But we will not shy away from keeping our main toppings in place. We take pride in knowing that we use ingredients that are more fresh and made in-house. We’ll never take that away—it’s what Zio’s has been known for all these years. But again, we’ll have to continue to keep an eye on things for 2023, as prices continue to rise and as Nebraska’s new minimum wage pay scale goes into effect. But for now, menu options will not be reduced, nor will any of the current vendors we use for our product be scaled back.

Neneman: We have raised prices slightly; some of our customers are seeing no increase at all while others might be seeing a significant increase. We don’t want to necessarily raise prices across the board, but rather be diligent about the increasing costs to service certain properties. Our main strategy is engaging our vendor partnerships to identify how we can work together to keep our costs as low as possible without having to seek out new relationships. We have already decided to change a couple key partners that directly affect overhead, which is saving us 15% in 2023.

This article originally appeared in the February/March 2023 issue of B2B Magazine. To receive the magazine, click here to subscribe.  
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