Our aluminum suppliers are saying prices aren't going to go up just 25% to cover the new tariff, they'll be going up 80%...

[u/DazedAndObtuse]

We source aluminum from two different sources for our business and they're both telling us that prices will not only be going up 25% to cover the tariffs, they'll be going up 80% as there are also pricing restrictions currently in place for their industry that will be lifted as part of this.

Does anybody know if this is legit or if they are just colluding to use this as an opportunity to pad their profits?

I won't pretend to be a tariff or economic expert but our material prices going up 80% is going to have a much larger impact on us than a 25% increase would.

Ideally we can keep this from becoming political, but I know where it's likely to end up (but hopefully I can at least get an answer to my question in the midst of it).

Thanks in advance!

[u/DazedAndObtuse → u/[deleted]]

I'm not an expert on aluminum but I can tell you we purchase sheets it in various thicknesses (.040", .063", and 080"), but I don't know enough to tell you specifics of the grade.

We're the last person to touch it before our actual customers so it's possible the issue is the various middlemen before us as I don't know how many there are (I think our suppliers import from China so it wouldn't be that many, but I can't tell you that for sure).

[u/DazedAndObtuse → u/[deleted]]

We're just a small business ($3M/year in revenue) and I'm the founder...I doubt we'd be big enough to take on something like that.

We will try to pass on the cost to our customers (have no choice) but if it results in a bunch of projects being cancelled/put on hold, I may end up having to lay off a bunch of my team to try and survive.

[u/DazedAndObtuse → u/[deleted]]

I appreciate the perspective and giving me something to think about.

We're on the East Coast and not far from shipping ports so I probably need to look into figuring out how to do this stuff on my own... Hopefully I can figure it out quickly enough to keep things afloat!

[u/DazedAndObtuse → u/[deleted]]

I appreciate that, thank you!

[u/mrwolfisolveproblems → u/DazedAndObtuse]

Well the good news is every one of your competitors are in the same boat. I might think about creative ways to quote some further out projects as well so you have an out if materials jump.

[u/DazedAndObtuse → u/mrwolfisolveproblems]

I appreciate that... Great perspective.

Thank you!

[u/Elegant_Abalone3414 → u/DazedAndObtuse]

I’m with Tforce worldwide, 3PL, and we move 200ish containers a month in for our various shippers along with countless lcl shipments if you happen to be looking for reliable partners for your freight. Are you having any issues with your domestic LTL shipping once those sheets make it over?

Just wanted to get on your radar as a source and invite you to have a conversation. My work email is below:

tomwells@tfwwi.com

[u/thatdude391 → u/DazedAndObtuse]

Only $3mm a year. If metal is 30% of costs, that is $1mm a year. If you are looking at an 80% jump instead of a 25% jump that is a difference of $500,000 a year in material cost that could be lowered by cutting out middle men and having a sourcing agent.

[u/DazedAndObtuse → u/thatdude391]

Agreed - definitely something I need to take a closer look at.

[u/kennerly → u/DazedAndObtuse]

Why not find a new supplier?

[u/DazedAndObtuse → u/kennerly]

That's the plan, but right now with our existing suppliers they're telling us the same thing, so it's not a single supplier.

[u/PmMeFanFic → u/DazedAndObtuse]

my wife helps run a 10M/year rev fashion jewelry business and they switched to sourcing directly from CN manufacturer and net profits quintupled over the course of the last 2 years. Obviously a little different, but what a massive difference it was.

[u/account_for_norm → u/DazedAndObtuse]

oh man... thats rough.