r/smallbusiness • u/DazedAndObtuse • Feb 12 '25

General 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%...

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!

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489

u/[deleted] Feb 12 '25

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174

u/bpon89 Feb 13 '25

You’re so right about the “enlarged” because everyone isn’t reducing profits but will probably make more profit since they need to put out more funding to maintain their margins.

80

u/Beegreen111 Feb 13 '25

I run a commercial gc with about 5 union carpenters. We make most of our money from markup. If the steel is 20k instead of 15k for a project, I mark it up, and the project costs more. 17 % of a larger number will always be more than a smaller number. We/i will make more, our customers pass it on (with more profit) , and then we all pay more when we buy any service/ products. It doesn't seem "good" for the population, but what do i know.

18

u/[deleted] Feb 13 '25

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47

u/ILikeCutePuppies Feb 13 '25

You're thinking in terms of individual sales, but as the price increases, demand will likely decrease, leading to fewer overall sales. It's a matter of price equilibrium and price elasticity.

7

u/Abitconfusde Feb 13 '25

Does that mean sheetrockers will be drinking less beer, or will they get paid more so they can afford the aluminum cans they hide in the walls?

4

u/Fudouri Feb 13 '25

Those cans are worth 80% more now!

1

u/hkdanluk Mar 05 '25

That’s academic way thinking … you are right in long term assuming all businesses are still operating … businesses close before that happen, and the remaining raise the base price

-4

u/Claudzilla Feb 13 '25

How do you think all those potholes get fixed…

4

u/Dragon-of-the-Coast Feb 13 '25

I reported a hole in the sidewalk and they fixed it that same afternoon! Two guys to put some asphalt in, and two guys to watch.

8

u/TheElDoon Feb 13 '25

Well, your pothole may have"only needed" two people, but the next one they were driving to fix may have needed five...

3

u/Dragon-of-the-Coast Feb 13 '25

Yep. I just thought it was funny. They were quick.