Northway OSSeptember 13, 2026
A supplier raised prices. Here is what it is really costing you.
Price increases almost never arrive as an announcement. They arrive as an invoice that feels higher than you remember, in a week when you are too busy to check.
By the time it is obvious in your margin, you have usually been paying it for two or three months. Here is how to pin it down quickly and decide what to do.
Start with two invoices, not the price list
Pull the same supplier's invoice from this month and from six months ago. Not the price list, which often lags what you are actually charged, and not your memory, which is reliably generous.
Compare line by line, on the items you buy most. You are looking for three things:
- The unit price. The obvious one.
- The unit itself. A case that quietly went from 24 to 20 is a 20% increase wearing a disguise, and it will not show up as a price change anywhere.
- The extras. Delivery charges, fuel surcharges, minimum order fees and pallet charges move more often than product prices, and they rarely get announced.
The third one catches people out most, because it never appears on any line you would think to check.
The one calculation that matters
The percentage is not the number to act on. What matters is what it costs you per month at the volume you actually buy.
Old price, minus new price, times units per month.
If a case went from $42 to $47 and you buy 30 cases a month, that is $150 a month, or $1,800 a year, from one line item.
Do that for your top five lines with that supplier. The total is what the increase is actually worth, and it is often either much smaller or much larger than it feels.
That number is what you take into a conversation. "Your prices went up" invites a shrug. "This is costing me $1,800 a year and I have been with you four years" is a negotiation.
Check whether it is one supplier or the whole category
Before you move, work out whether you have a supplier problem or a market problem. They call for opposite responses.
Check the same product with one other supplier, and check whether your other suppliers in that category moved at the same time. If everybody moved, it is the market, and switching costs you the relationship you already have without fixing the price. If only one moved, you have leverage.
Four responses, and when each one fits
Absorb it. Fine when the monthly number is small and the item is central to why people come to you. Do it deliberately, with the number in front of you, rather than by not noticing.
Move the price. The increase gives you a reason, and small, specific increases on individual items land far better than a menu-wide rise. Move the items where you have the most room, not everything.
Change the spec. Sometimes the right answer is a smaller portion, a different grade, or a different supplier for that one line. Be careful here. Customers notice size changes faster than they notice price changes.
Move the volume. Keep the supplier, shift the items where they are least competitive. This is often better than a full switch, because you keep the relationship and the delivery schedule.
Then watch the next two months
Whatever you decide, write down the date of the increase and what you did about it. Two things to watch:
- Did your margin on that item return to where it was? If it did not, the increase was bigger than the line you spotted, and there is another one hiding.
- Did volume change? If you moved a price and sales of that item dropped noticeably, you found the ceiling. That is worth knowing before your next increase.
The hard part is noticing
None of this is difficult arithmetic. The difficulty is that nobody has time to compare invoices from six months ago every month, so the increase goes unnoticed until it shows up in a quarter that feels worse than it should.
That is the part worth automating. Northway reads your costs against your sales month by month, using your own history rather than an industry average, and tells you in plain English when something moves, along with what it is costing you a month.
If you want to see what it finds in your numbers, email us.