Saf-ti Says Not Now

Another glass distributor has said "not now" to the NAGS rebalancing. Saf-ti Glass Distributors Inc., the Troy, Mich., distributor of after market auto glass, has sent a letter to customers saying it will not implement the new NAGS pricing list when it becomes effective February 28.

Here is the text of the letter the company sent out:

FROM: Tim Tock @ Saf-ti Glass Distributors, Inc.
SUBJECT: Auto Glass Pricing / NAGS Rebalancing of February 28, 2005

The NAGS 2005 Winter Benchmark Calculator dated February 28th has been released reflecting what NAGS defines as a 'price rebalancing'. The NAGS list prices have been reduced significantly, in many cases by over 60%. Many in the auto glass industry had thought that NAGS may rescind implementing this pricing revision, but numerous Offer & Acceptance letters from major insurance carriers this week refer to revised discounts and labor based on this latest Benchmark Calculator.

Although retail installation shops may need to conform to the February 28th Benchmark Calculator on the selling side, the wholesale distribution market has not embraced this latest Benchmark Calculator. We are not convinced that the new "rebalanced" list prices make for a viable pricing model to our customers at this time. Besides restructuring customers' discounts off the new NAGS list prices, it would add a significant amount of parts to be sold at NET.

Therefore, for the time being, Saf-ti Glass will continue to use our existing pricing methodology, consisting of a combination of customers' current discounts off the NAGS 2004 Fall Benchmark Calculator, and net prices from our Net Price Addendum dated October 2004. (Note: the Net Price Addendum will be revised shortly to include newer parts and some minor changes.)

Hopefully, as customers evaluate how this new selling price structure will affect their business, the fact that their costs will remain constant may make it easier to assess this impact. Saf-ti Glass will continue to analyze alternative pricing models, including using some form of the NAGS 2005 Winter Benchmark Calculator.

No reproduction, in print, electronic or any form without the expressed written permission of
Key Communications Inc. 540-720-5584.