Your supplier raised prices.
See the margin impact before you decide.
A supplier price increase is a decision, not an announcement. Quantify the change, see what it does to your gross margin, and decide whether to absorb, pass through, renegotiate, or review sourcing.
What a simple cost change can do
Illustrative numbers, in any currency. They show the shape of the impact on a single item.
- Previous supplier cost
- $50.00
- New supplier cost
- $60.00
- Supplier cost change
- +$10.00 (+20%)
- Current selling price
- $100.00
- Gross margin before
- 50%
- Gross margin if price stays at $100
- 40%
- Target selling price to preserve margin
- $120.00
- Price adjustment needed
- +$20.00 (+20%)
The supplier cost rose 20%, but your gross margin fell from 50% to 40% at an unchanged selling price (a drop of 10 percentage points). Preserving the previous margin requires a 20% price adjustment, from $100 to $120. The calculator shows the exact target for your own numbers.
Decide before you reply
A short response checklist
- Confirm exactly which items the increase affects and the effective date in the notice.
- Compute the supplier cost change in absolute terms and as a percentage.
- Check the gross-margin impact at your current selling price.
- Decide per affected item: absorb, pass through, renegotiate, or review sourcing.
- If you respond, respond in writing, with the quantified impact, before the increase takes effect.
- Record which items you adjusted and review them at the next supplier review.
For the quantitative method behind these steps — the cost change, the margin impact, and the margin-preserving price — see how to analyze a supplier price increase. Saving each round as you respond to it builds something beyond this one increase — see tracking supplier price changes over time.
Frequently asked questions
How do I respond to a supplier price increase letter?
Before you reply, quantify the change: the cost increase in absolute terms and as a percentage, and what it does to your gross margin at your current selling price. Respond in writing with that quantified impact before the increase takes effect — the checklist above walks through the steps in order. For the negotiation levers and a copyable response email, see how to respond to a supplier price increase.
Should I accept a supplier price increase or push back on it?
That depends on your margins, your alternatives, and your relationship with the supplier — a business decision CostRift does not make for you. What CostRift does is quantify the margin impact so the decision between absorbing, passing through, renegotiating, or reviewing sourcing is based on numbers rather than the notice alone.
How much should I raise my selling price to cover a supplier cost increase?
To preserve your previous gross margin, the target selling price is the new cost divided by (1 − your previous margin). Enter your own previous cost, new cost, and selling price into the margin impact calculator above for the exact figure.
Is a supplier price increase of a given size normal?
CostRift does not benchmark what counts as a "normal" increase for your industry or supplier category — it quantifies the impact of the specific increase you received on your own cost, price, and margin, which is what matters for your decision regardless of how the increase compares to others.
A supplier raised prices on only some items — how do I find which ones?
Compare the supplier's previous and current full price lists rather than relying on the notice alone — it will surface every item with a changed cost, not just the ones called out, including any the notice did not mention.
How do I track price increases across multiple suppliers over time?
Save each comparison round as you respond to it instead of treating every increase as a one-off. See tracking supplier price changes over time for how that builds a history across suppliers and increases.
See it with your own numbers
Enter your previous cost, the new cost, and your selling price. The calculator shows your margin impact and the target selling price that preserves your previous gross margin.
Open the margin impact calculatorMany items changed at once?
A single example covers one item. To see the margin impact and target selling prices across an entire supplier price list, compare your previous and current lists with CostRift.
Compare your full supplier price list