Microblog Memes

Obviously I don't know the business in question, but it's quite possible that the company has a bunch of longer running contracts that would become a loss if the inputs become much more expensive.

Of course, businesses will use the opportunity to charge more, but sudden price hikes are a very real problem.

Large and small manufacturing companies have contracts for orders for months to years out with set prices, some of which might have wiggle room for costs but not to this extent. Plus manufacturing already tries to balance out costs across projects due to fluctuating prices for materials. If their materials double (or more) in price they will be screwed by the contracts and guaranteed to lose money on all of them.

Buying at the current prices means they will have to pay to have the materials stored in a warehouse, which will cut into their planned profits for those existing contracts. Hell, they might be buying at a higher cost than they normally would when fulfilling the contracts.

The company is getting screwed, not trying to fleece customers or their employees.

Without having more detail I can't speak with certainty, but, general principles of inventory management and cash flow discourage having a surplus of stock, as that ties up a significant amount of working capital in the costs of storing and handling it all - you risk not being able to pay your liabilities because you've sunk all your funds into inventory that hasn't yet sold and generated more revenue.

Companies often have longer term contracts with specific prices agreed that can't always be easily changed. Those contacts could quite easily become unprofitable if there are sudden increases to the direct costs of fulfilling them. So, rather than trying to fuck customers, this company is likely trying to stock-up at current market prices to ride-out the first year of tariffs, but in doing so, needs a large injection of working capital to cover the expenditure (hence cancelling bonuses), and also puts itself in a very vulnerable position where cash flow is concerned by tying up that capital in inventory - any further sudden and unexpected costs could lead to the business folding.

That's the thing though, most customers don't expect the price increase because they're fucking idiots who believes tariffs are good for the economy.

Yeah, this seems like those redhats need a union.

they'll pocket the difference, jack up prices, refuse bonuses next year, business slows, lay off half the staff, buy material on credit--maybe siphoning some of that off, bonuses are now a distant memory, jack prices up again. business slows to a crawl, lay off more. business falters. file bankruptcy with millions of outstanding debt to write off.

just like their diaper-wearing idol would.

Does it matter? This wouldn't have happened without Trump being elected and the looking threat of tariffs. Whether the owner is using that as cover for jacking up the prices or not, it's still a LAMF moment.

If they're reputable enough and tend to operate in good faith, they could be giving their customers time to prepare for the incoming price hike. They'll probably lose customers that can't afford to operate with the new price later on but the transparency would go a long way towards maintaining healthy business relations with the remaining customers.

if anything like it happens in Turkey, most businesses will buy early, stockpile goods as prices keep increasing (increased effect of tariffs + shortage of goods in market) and release them to the market for a hefty profit

Definitely the latter.