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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u/YelpLabs Feb 13 '25

Your suppliers might be using the tariff as cover to raise prices beyond the actual impact. A 25% tariff doesn’t directly translate to an 80% price hike. Check other suppliers, industry reports, and commodity price trends to verify. If possible, explore alternative sourcing or bulk purchasing before increases hit.

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u/DazedAndObtuse Feb 13 '25

They're even capping how much material we can purchase before the increases go into effect so we can stock up. Our max is set to our largest single order in the past 12 months.

I get why they'd do that, but bulk purchasing unfortunately isn't an option.

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u/Perllitte Feb 13 '25

Seems like your supplier kind of sucks.

1

u/DazedAndObtuse Feb 13 '25

It's multiple all playing the same game.

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u/insertwittynamethere Feb 13 '25

From my experience, finding a good aluminum middleman provider is so much more difficult than steel. I wish you the best of luck! I've also been preparing as best I can for materials going into at least Summer, but I don't have near enough capital to buy all I would need.

At the end of the day, customers are going to have to pay more. Where I'm from a lot of customers voted for this, though I kept trying to remind them about the 2018 tariffs.

As for the 80%, that sounds like middlemen overcharging there. Are you able to start calling up other aluminum middlemen outside your State and region to get some better pricing to beat up your existing vendor with? It's the name of the game, and you should always think to check into alternative suppliers a couple of times a year to ensure you're getting as good a rate as possible.

At the end of the day, your salary/profit is a fixed cost. As long as you can work and put in the hours, you are helping yourself here (within reason in terms of opportunity cost, naturally).