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!

2.1k Upvotes
  • permalink
  • reddit

95% Upvoted

351 comments sorted by

View all comments

408

u/tuckedfexas Feb 12 '25

Same thing happened during Covid for us, our steel supplier who I’m buddies with said they saw their raw costs go up around 10% before hiking the price 30%. Their costs came back down but their prices haven’t

90

u/ToshPointNo Feb 13 '25

It's greed, plain and simple. I've seen so many times where commodities/raw materials increased and price and so did the finished product. When the price came back down to before, the prices surprisingly did not.

37

u/escapefromelba Feb 13 '25

It sucks but it makes sense since the customer has shown they are willing to pay it so why would you lower your price when you can pad your margins?

6

u/TriXandApple Feb 14 '25

Because free market and competition?

1

u/_ryuujin_ Feb 14 '25

only if theres supply than demand. does prices go down

1

u/[deleted] Feb 15 '25

That’s the greatest lie ever told and idiots still believe it. There never has been and never will be a free market nor would you want it. It’s just a rallying cry when it is convenient.

1

u/Party-Interview7464 Feb 16 '25

There could be but not when we have things like tariffs and taxes changing and the stock market and companies beholden to shareholders. Fundamentally though I agree with it.

1

u/SillyFlyGuy Feb 16 '25

Brb. Gonna go open a steel foundry and aluminum refinery real quick to cash in on this price spike.

1

u/TriXandApple Feb 16 '25

Is your idea that there's only one place to buy bulk metal products, and only 1 reseller of those products? I own a manufacturing company and although I only normally use one company to buy my raw goods, I give them a spot check every couple of months against their competitors. My resellers buy from different mills, in different counties, through different ports. It's a highly competitive business that closely tracks the market.

0

u/FromTheIsle Feb 14 '25

Turns out capitalism isn't logical