MAG Customer Information

Information on price trends

Why purchase prices for cables, adaptors and accessories may change, and why cost developments for individual items are sometimes only visible after a considerable delay.

Price changes are never welcome. That is why we would like to explain, in a transparent and clear manner, how the costs of our products are structured and why the prices of individual items may change over time.

Our aim is to keep prices as stable and transparent as possible. Existing stock levels, as well as materials and components procured earlier, often help to cushion the impact of cost changes initially.

Raw materials: copper, plastic and components
Production Manufacturing and quality control
Transport: freight, routes and delivery times
MAG Warehouse Stock and delivery from Germany
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Price changes often only become apparent months later

An item available today may still come from a production batch whose raw materials, components and packaging were purchased many months earlier under different terms. As a result, an item may remain available at a stable price for a long time, even though the cost of replacing it has already changed in the meantime.

What influences the price of a cable or adapter?

Various cost components interact to determine the price of our products.

Raw materials

Copper is one of the most important components of many cables. Other materials include plastics, PVC, metals, contacts and various other materials. Particularly in the case of cables with larger conductor cross-sections or a high copper content, changes in raw material prices can have a significant impact on manufacturing costs.

Production and wages

At international production sites, too, labour, social security, energy and production costs are subject to change. In addition, there are expenses relating to quality control, testing, certification and documentation.

Packaging

New and evolving requirements for packaging relate to materials, recyclability, labelling and documentation. In addition to the actual packaging material, this results in costs for development, conversion and administration.

Freight and logistics

International freight rates can fluctuate significantly. Changed or disrupted trade routes, diversions, additional insurance and longer transport distances all affect actual logistics costs.

Exchange rates

In international procurement, exchange rate fluctuations also play an important role. Even if production costs remain unchanged, this can alter the actual purchase price of a product.

International framework conditions

Political conflicts and disruptions to international trade routes can affect the supply of raw materials, energy, insurance, transport capacity and delivery times. This can impact several cost areas simultaneously.

Current example

Changes in production costs in China

China does not have a uniform national minimum wage. Minimum wages are set regionally and adjusted regularly. In Guangdong province, which is particularly significant in economic and industrial terms, minimum wages will be increased again with effect from 1 September 2026. Among other things, the monthly minimum wage in Shenzhen will rise from 2,520 to 2,700 RMB and in Dongguan from 2,080 to 2,300 RMB.

The statutory minimum wage does not automatically correspond to the actual wages of all employees in a factory. However, such adjustments do have an impact on general wage levels, on suppliers and on other labour costs. They are therefore a current example of how production costs are constantly evolving at key manufacturing locations.

How stock levels initially cushion price changes

Existing stock can ensure that changes in procurement costs only become apparent much later.

For accurate costing, it is important that stock is held at multiple levels within the supply chain. A product manufactured today therefore does not necessarily consist exclusively of raw materials and components purchased at current prices.

Stock at MAG Finished products in our warehouse in Germany may originate from earlier production batches.
Stock at the manufacturer Finished products or semi-finished goods may also already be available at the manufacturer’s premises.
Copper and raw materials Raw materials may have been purchased weeks or months earlier at previous prices.
Plastics and insulation Plastics, PVC and insulation materials are also sometimes procured for stock.
Connectors and components Contacts, connectors, housings and other components may still come from existing stock.
Packaging materials Cardboard boxes, bags, labels and other packaging materials are also sometimes procured in advance.

As long as the manufacturer is still using, for example, copper, plastic, connectors or other components from previous stocks, these earlier purchase terms can continue to be applied to production.

Once these stocks have been used up, the required raw materials and components must be procured anew at the current terms and conditions. As a result, the production cost of a subsequent batch may change significantly, even though the product has remained technically unchanged.

This effect therefore does not only affect our stock in Germany. Raw material and component stocks held by the manufacturer can also mean that changes in costs only become apparent in the price of the finished product much later.

Why can a new production batch be significantly more expensive?

For many products, several months elapse between planning and goods receipt.

For many of our products, there is a gap of five to six months – or in some cases even longer – between production planning, ordering, manufacturing, quality control, transport and the arrival of goods at our warehouse in Germany.

An item can therefore be offered at a stable price over a long period, even though the costs of a new production run may have already changed in the meantime.

With a new production batch, several changes may occur simultaneously for the first time:
  • higher copper and raw material prices
  • more expensive newly procured components
  • changes in production and labour costs
  • higher costs for packaging and documentation
  • changes in exchange rates
  • Higher freight and insurance costs
  • longer or altered transport routes
  • additional requirements within the supply chain

For example, if copper purchased earlier and existing components at the manufacturer’s premises have been used up, whilst new labour costs apply and, in addition, freight, exchange rates or packaging costs have changed, several developments come together to affect the same production batch for the first time.

Consequently, a significant price adjustment is often not caused by a single short-term price increase. Rather, various cost trends may have built up over months and only become apparent in the calculation when a new consignment of goods is received.

How this time-lag effect arises

A simplified illustration, from the purchase of materials to the arrival of the new goods in our warehouse.

1
Material stock The manufacturer is still processing raw materials and components that were purchased under previous terms.
2
Production As a result, the goods can still be manufactured under comparatively favourable conditions.
3
MAG’s stock This production batch is subsequently sold, in part, from our stock over a period of many months.
4
New procurement Raw materials, components, wages, packaging and freight are now charged at the current rates.
5
New batch It is only now that the cost changes that have occurred in the meantime become apparent in the new purchase price.

How we cushion the impact of price changes for as long as possible

Our aim is to ensure terms and conditions that are as stable and transparent as possible.

Existing stock levels often enable us to continue offering items at previous terms, even though individual procurement costs have already changed.

Our manufacturers may also still have raw materials and components in stock that were purchased at earlier prices. As a result, cost increases sometimes only become apparent after a considerable delay.

For our customers, this means that short-term market fluctuations do not automatically lead to an immediate adjustment of the retail price. However, if a new production batch has to be manufactured and procured entirely under the terms now in force, any necessary adjustment may be more pronounced.

Why it is impossible to predict future price trends with certainty

A single market movement says little about the future overall price of a product.

Individual cost factors may rise, fall or stabilise from time to time. However, a more favourable trend in the price of a raw material does not automatically mean lower overall costs.

Lower costs in one area may be offset at the same time by higher production costs, wages, packaging, freight, exchange rates or other expenses.

Added to this is the time lag within the supply chain. Raw materials, components and finished products may have been purchased at very different times. A change in a raw materials market today therefore says only so much about the actual costs of a production batch that will not arrive at our warehouse until several months later.

Even if individual cost factors become cheaper again at a later date, this does not automatically result in a corresponding reduction in the item price. It is therefore not possible to deduce or predict a specific future price trend from individual market movements.

Our commitment remains unchanged

Reliable products, competitive prices and the highest possible delivery reliability. Our pricing is based on actual procurement, production and logistics costs.

We utilise existing stock wherever possible to cushion short-term cost fluctuations and offer our customers conditions that are as stable as possible. Significant price changes for individual items are therefore often caused by a combination of factors that only become apparent simultaneously with a new production batch, rather than by a corresponding change in our profit margin.

MAG GmbH · Manufacturer and wholesaler of cables, adaptors and accessories
DINIC · a brand of MAG GmbH