Dear …
RE: Price Increase Proposal
I have recently spent some time doing product research and reviewing the current pricing structure on our __(type of products)__. This exercise has revealed to me some alarming facts as follows:
- The __(cost of materials for/wholesale cost on/etc.)__ __(type of products)__ products
- __(have/has)__ increased by __(%)__ over the past __(length of time)__. During this time, we have not increased our retail prices and, therefore, have seen quite the reduction in our margins.
- Continuous rising costs from suppliers have also resulted in an increase to the cost of our __(type of products)__ inventory; by at least __(%)__ __(over the past __(length of time)__. No part of this increase has been passed on to our customers. Again, our margin here has been gravely affected.
- Our own overhead expenses have risen by approximately __(%)__ since our last product pricing revision.
- And, finally, my research has revealed that the retail prices we currently offer for our products are __(considerably less/approximately __% lower/etc.)__ than most of our competitors.
Economics tell us that we need a price increase. Since __(year)__, our overall margins have fallen to an estimated __(%)__, from the acceptable __(%)__. In view of this, I propose that we restructure the pricing of all of our inventory soon, returning our margins back to __(%)__. Based on my market research, I believe this is easily obtainable right now without causing dire affects to our market share.
I thank you for your consideration of this proposal and look forward to hearing from you soon.
Respectfully yours,