Inflation the Silent Tax
How a $0.61 increase in the cost of production leads to a nearly $2.50 increase for consumers.
The company that manufactures our BBQ Sauce is raising our costs by over 20%. Why? Inflationary pressures: prices are rapidly rising for shipping, ingredients, plastics, and glass. We do not fault our manufacturer. We are experiencing the same forces in our restaurants. BUT If something doesn’t change, it could mean our BBQ sauces are too expensive for retailers.
Each time a retail product changes hands, the price goes up. We’ll use actual costs from our experiences to demonstrate how this works.
Old Pricing - We purchase the sauce for $1.93/Bottle (including Shipping and Label) > We sell it to a Distributor for $3.38 > The Distributor sells it to the Retailer for $4.19 > The Retailer sells it on their shelves for $5.99
New Pricing (same margins) - We purchase the sauce for $2.54/Bottle > We sell to the Distributor for $4.45 > the Distributor sells to Retailer for $5.52 > the Retailer sells it on their shelves for $8.49!!
This $0.61 increase at production leads to a $2.50 increase for you, the consumer.
We hope this demonstrates how fragile pricing is, and how rapidly prices can change. A seemingly insignificant rise in the cost of production leads to a dramatic increase in the final price for the consumer.
We’re currently working to figure out solutions. Any tips, information, or ideas are encouraged.