The inflation delay is over: It’s time for distributors to act decisively

Let's be blunt: The economic landscape for industrial distributors isn't just evolving—it's hitting a critical inflection point. In the recent Modern Distribution Management (MDM) article, Analysis: Inside Distribution's Inflation Delay, Mike Hockett highlights, “What we've seen so far is merely the calm before the storm. That ‘inflation delay’ you've heard about? It's ending, and the impact of tariffs is no longer a distant threat—it's here. Understanding these dynamics isn't just crucial for distributors; it's foundational to your survival and growth in this new reality.”

The current landscape: Absorbing costs and anticipating shifts

Hockett's analysis reveals that July's wholesale inflation jump was the first unmistakable signal of tariff-driven inflation. The US Producer Price Index saw its largest one-month increase in over three years—that's not just a statistic; it's a warning bell for every distributor. For a while, distributors have been absorbing significant tariff costs by front-loading inventories from January through March, before the April 2 “Liberation Day” tariff implementation. This protected customers from immediate sticker shock, but the buffering capacity is finite. As the data shows, distributors are already feeling the pinch—71% anticipate their 2025 Cost of Goods Sold (COGS) will rise by 1–10% annually, and by late April, a third were already battling price hikes of 25% or more. Applied Industrial Technologies, a leading industrial supplies distributor, is already noting significant price contributions and expects further increases into fiscal 2026. This sentiment is echoed by Fastenal, another major industrial supplies distributor, which foresees additional pricing actions in the latter half of 2025 to address deferred tariffs.

The question isn't if  you'll face these pressures, but how you'll respond.

Strategic solutions for stabilising operations and pricing

So, what's the path forward? It's simple, yet profound: You must master operational efficiency and deploy truly intelligent pricing strategies. This isn't optional; it's non-negotiable for success.

Conquer costs with Infor Process Automation

The article underscores that distributors have been building up inventories to delay the tariff impact. But holding more stock means increased operational complexity and higher cost. This is where Infor's process automation solutions become indispensable—enabling distributors to streamline their entire operation, from order receipt to final delivery. Eliminate manual errors, slash wasted time, and dramatically reduce operational costs. By automating tedious, repetitive tasks, you're not just improving productivity—you're creating the internal resilience needed to absorb external cost pressures. This isn't just about cutting expenses; it's about building a lean, agile business that can weather any economic storm and still keep your prices competitive.

Stabilise pricing with Infor Velocity Suite AI-powered pricing

As Hockett points out, “The 'long-expected inflation delay' is concluding, and suppliers aren't slowing down their price increases.” So how do you pass on necessary adjustments without driving customers away? The answer is Infor Velocity Suite, which includes game-changing AI pricing capabilities. This isn't just another pricing tool; it's your strategic advantage in navigating price volatility. Our artificial intelligence (AI) analyses an immense array of data—market trends, competitor moves, your own cost fluctuations—to recommend optimal pricing strategies that protect your margins while keeping your customers happy. As previously mentioned, Fastenal is already planning additional pricing actions in late 2025 to address deferred tariffs. With Infor's AI, you can execute these critical adjustments intelligently, transparently, and with maximum impact, ensuring your customers see stability, not shock.

Don't just survive. Dominate.

Let's be clear: The days of simply absorbing all costs are numbered. The shift towards carefully managed price adjustments is not just probable—it's inevitable. But you don't have to face it unprepared. By harnessing the power of Infor’s process automation and our groundbreaking Velocity Suite AI-powered pricing, you don't just react to market changes—you shape your response. These aren't just tools; they are the strategic backbone you need to control costs, set prices with precision, and solidify your position as the indispensable, reliable partner for your customers. The time to act is now. Don't just survive the inflation delay—dominate it.

Click here to discover how Infor empowers distributors to not just adapt, but truly thrive in this new economic reality.

Read the full MDM article (subscription required) here.