Thread by @NumbersMuncher

With all of the talk about inflation I wanted to do a quick thread to explain how inflation has been impacting my small business and will be impacting consumers even more in the days to come.

I've been talking about this all year, but this might give a better overview. 1/11

At the start of 2021 our supplier increased costs on all products by 20-35% due to the massive increases in materials on their end. We all saw this with the escalating costs of wood, glass, metal, etc.

That alone required us to increase costs on some items where we could. 2/11

Those price increases did not hit until about May because it takes ~90 days to get products from order to available for sale.

So we increased in very small amounts but have been waiting to increase further to absorb the increases in product costs.

But it doesn't end there. 3/11

Before COVID we could ship a full container from China to Chicago for about $8,000. Trump's tariffs increased that to $10-$11k per container.

Currently it costs about $24,000 just to ship one container PLUS those tariffs/duties.

That's an increase of $16,000 per container. 4/11

Container costs have increased all year, but have gone almost vertical in 2021.

We shipped a container about two months ago for $14k plus tariffs and duties and our latest quote was $24k.

And *none* of those price increases have been passed to consumers... yet. 5/11

Those 20-35% increases in product costs happened in early 2021, but the transportation increase raised our "landed" product cost another 25-70% depending on the item.

In other words, between material and transportation our overall costs have already increased by 40-100%. 6/11

In addition to product costs jumping by 40-100% due to material and transportation, we've seen large increases in our costs for labor, rent, local trucking, shipping supplies, advertising, services, etc.

That increases the 40-100% jump even more - you get hit everywhere. 7/11

We were already forced to raise prices because of product/material increases and still needed to raise further.

Now with shipping costs tripling in a year, those upcoming shipments will see much sharper increases once the product arrives.

This is happening EVERYWHERE. 8/11

Maybe this will be transitory, but it is not going to stop abruptly because the cost increases being absorbed now on transportation are only just being seen as shipments arrive.

If I'm paying $16k more for one container, I either raise prices or shut down the business. 9/11

Because of the competition it's almost impossible to raise prices without losing sales, so this puts heavy pressure on businesses to eat a lot of the costs which has forced me to stop some plans to expand this year and wait it out.

This will really hurt small businesses. 10/11

I don't know if this was helpful to as to why inflation on consumer products is sharper than some leaders (and Federal Reserve) want to claim, but the cost increases are coming from *everywhere:* Materials, transportation, employment, storage/rent.

It's bad right now. 11/11

This is the big question - consumers will pay more for what they need, but how much can you raise prices without losing sales is a scary experiment that businesses big and small are about to find out because inflation isn't going to just disappear quickly.

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