Why would I eat the cost on a price increase? I am not a charity. Price increases are price increases. We don't have to explain them to anybody.
Sometimes you have no choice. We had an upcoming big increase on aluminum due to tarrifs a year ago...the price jumped by about 40%. And one company bought about 40 skids and cleaned everyone out before the tarrifs hit... They kept their prices what they were at, so by increasing our prices we were no longer competitive. We didn't lose money, but our margins went down for quite awhile in places where we couldnt raise it.... They used it to win all the larger contract jobs where they didn't need to increase prices by 15-20% where as every other shop did (Which was smart of them)
We also do a lot of government contracts / tenders... If we jack up the price of the tender at renewal time, 9/10 times it goes back out to bid due to how the tenders work... So lose out on a bit of proffit, or raise prices and maybe lose a million dollar contract which would have been a guaranteed thing?
We just had a 250k a year contract goto year 2 / optional for renewal... Aluminum was $110 a sheet when we signed the pricing, then within a year it jumped to $165 a sheet. We werent going to eat that much proffit since it was just cutting aluminum... So we told them price would be going up 75%... luckily they accepted letters from our suppliers on how aluminum has gone up due to tarrifs / mills, and just renewed the 2nd year without having to go back to tender... Jobs where its all manufacturing theres no option to eat the cost... but if its a job where you're making 40-50% proffit, and you can either give up 10% or risk losing the contract to some other company who comes in bidding cheap... sometimes it makes more sense to eat the cost.
Sure... if a realtor comes in and says why are signs $10 more today than they were yesterday, you don't owe them an explanation aside from material costs have gone up... But there are lots of cases, and long term customers where you do need to justify the increase... Otherwise they may start shopping around.