Wholesale Goods Pricing is up

So we have wholesale pricing, increasing wholesale price of goods is up 10.8%. Going to cover this really quick. Show you some information on it and let you just  digest this one. So this is the most recent information that came out and we have it increasing at 10.8% for wholesale goods.

So wholesale goods are the items that go into making items. Right. So imagine that you are buying you’re building a car, you’re building something that you’re manufacturing putting together. And each of the different components that come into it are now more expensive, right? So you have to now put more money out. You have to have a larger line of credit. You have to have more investment.

You have to try to save in different ways. So you’ll try to buy a different competing component and invest in some technology to substitute a different good because all these prices are going up.

Right? And then as you add all these inputs together, you have to now charge something to somebody else, right? You’re going to sell it. So if your input costs went up 10.8% for the items that all are put together, and now you’re like, I can’t pass that along. And now you’re going to try to substitute for something else that takes investment, innovation, some retooling of a plant of something, right?

Like you’re changing your process. It’s not the same as it was before. Now you’ve also had to make larger investments. So I’m going to argue that as the wholesale cost of your inputs goes up by 10.8% to build whatever this item is, you need to pass this cost along. And I would say that the increase in cost that you’re going to put out to somebody else is going to be more or higher than even the 10.8%, because now you have to have a larger profit margin because you’re spending more money. Right?

There’s a larger investment that’s needed. And so you’re going to raise your your profit margin and you’ve had investment you had to make for all this retooling or whatever it is. So I would argue that you’re going to be raising your prices by 15%, not by 10.8%, maybe 15 or 20% above what they currently were before. So I would look for more and more and more of this to continue to happen and for prices to continue to go up. We don’t have this under control yet.

We still have this supply side problem, and this is just more evidence of it. And I talked about a car kind of in my example here, but it’s the same exact thing for houses. All these input costs are going up. People want to be paid more because they’re doing stuff that they’re selling for more because there’s more money coming in. The ticket price is higher, all these different things.

So labor input costs also go up and you know, with it we have inflationary pressures that still don’t seem to be under control. We do have increases in interest rates coming at us. They’ve already signaled that that’s that’s happening. And so off we go. But ladies and gentlemen, that concludes us for this topic.

Episode Links

wholesale pricing, Mike Acquisto , Shana Acquisto , TNT 

Episode Recorded Live on YouTube 06.21.22

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