Cash flow

Your supplier raised prices, and what it does to your numbers

Most guides about a supplier price increase end at the moment you accept it. That is the moment your own numbers start going wrong.

Marcus VolstedCo-founder, Restocio Published 11 September 2026Updated 11 September 20268 min read

Your supplier raised prices, and what it does to your numbers

When a supplier raises the price, the stock already on your shelf does not get dearer. Only the next batch does, so the true cost of a unit becomes a weighted average of the old stock and the new one, and it keeps moving with every delivery until the cheap stock is gone. If nothing updates that average, your margin figures stay on last season's number for months.

Negotiating the rise gets all the attention. Almost nobody describes the half that follows, which is what an accepted increase does to a cost basis still full of cheaper goods.

Why does one price change take months to show up?

Because it arrives in batches. The day the new price takes effect, every unit in your warehouse was bought at the old one. The dearer units trickle in with the next container, and the honest cost per unit reaches the new price only when the last cheap unit sells.

Shopify has one cost box per variant, so one figure has to stand for a shelf holding two prices. Blending is the only arithmetic that can:

new average = (units you had × old average + units received × landed cost of this batch) ÷ total units

The lag is the part worth sitting with. That average never jumps to the new price, it walks towards it one delivery at a time, and the pace depends on how much old stock was on the shelf. Deep cover means feeling a rise later and for longer.

A price rise, followed through three deliveries

Round numbers, chosen to be easy to follow. A product with 300 units left at a landed cost of 38.00. The supplier puts the price up and, with freight, the new batch lands at 44.60. You buy 600 at a time and sell at 99.00 ex VAT.

Delivery	On the shelf before	Batch landed cost	New average	Reported margin at 99.00
Before the rise	300	–	38.00	61.6%
First at the new price	300	44.60	42.40	57.2%
Second	250	44.60	43.95	55.6%
Third	200	44.60	44.44	55.1%

Three containers in and the average is still under what you are paying, converging on 44.60 without arriving. Now run the version where nobody touches the cost field: the margin reads 61.6% throughout, on units that cost 44.60 and earn 54.9%. Nearly seven points that exist only in the report, on your biggest sellers.

What the report shows while the average lags

Shopify's cost per item does not move on its own. It holds whatever was typed until somebody types something else, and its profit reports, read 11 September 2026, take their cost straight from that field. Between the supplier's increase and the day you edit it, the margin on screen is arithmetically perfect on an input that stopped being true.

No warning fires, because as far as the platform is concerned nothing happened. Whether correcting the field also repairs the quarter you already looked at is a different question, answered honestly in the COGS audit. What belongs inside the figure in the first place has its own page. This one assumes you got that right and the ground moved.

Does a price increase change what you should order?

Not the quantity. How many units you need follows your sales rate and the supplier's lead time, and neither moved, so the deadline and the size of the order stay put. What changes is the cash that order consumes and whether the deals attached to it still hold. A cost that is simply wrong behaves the same way, and what it moves instead is worth knowing before you approve anything.

Cash bites first. Six hundred units that cost 22 800 at the old landed figure cost 26 760 at the new one, same order, same cover, roughly 4 000 more out of the bank. Where a supplier raised everything at once, that is working capital appearing out of nowhere, at the deposit rather than the delivery.

A minimum order quantity is the quieter one. Accepting an MOQ trades a discount against cash tied up in surplus units, and a rise moves both sides of that trade at once. Whether it still clears is the arithmetic worked through here, run again on the new numbers.

Which of your products has this already happened to?

You can find out with two invoices and a calculator. Half an hour covers the products that matter.

Pick your three biggest sellers.
Find the most recent delivery of each and what that batch cost per unit, goods plus its share of the freight.
Find how many units were on the shelf that day, and what the cost per item said then.
Run the blend above by hand.
Compare that with the cost per item today.

That gap is what every margin, profit and stock-value figure for the product has been wrong by since the delivery. Step three is usually the hard one, because nobody wrote down the units on hand at receipt. Start recording it rather than reconstructing it.

Where a price rise lands in Restocio

Our blend runs when goods are counted in, and the receiving screen shows the result per SKU before anything is saved: what Shopify holds today, what is arriving and at what landed cost, and what the new average would be. The write-back switch and the refusals around it are described in the cost price nobody ever updates. Two pieces earn their keep specifically when a supplier has moved.

One is the ledger. Each receipt is appended instead of overwriting the last figure, so every average traces back to the delivery that produced it, and Stock valuation carries a column called "Price paid, over time": the landed cost of each receipt in order, with the percentage change from the first to the latest. That is the view that answers "has this supplier been creeping up on me", which a single current cost never can.

The other is the jump guard, and a price rise is exactly what it exists for. A batch landing at or above a set multiple of the previous average, or the same multiple below it, is flagged as a big jump rather than passed through as a clean success. It asks rather than decides because a genuine doubling and a slipped decimal look identical from inside the software. A raw material spike, a batch flown in, a change of Incoterms are all real and all produce the shape a typo produces. Rises of ten or fifteen per cent pass straight through, which is right: a guard that questions every routine increase is one people learn to click past.

What this does not cover

One limitation matters more than the rest here, and it is ours. Duty is not in the landed figure. The stored number is goods plus the freight share, so on anything duty-rated the average above is short by whatever customs charged and every margin built on it flatters you. Packaging is not modelled at all. Buy a product and a box, and the box is invisible to us today. Both are logged work rather than oversights we are comfortable with, and until they land the honest name for the figure is supplier price plus freight, not true landed cost.

Nothing here says whether to accept the increase, change supplier or raise your prices either. It tells you what the rise costs per unit and when your reports will show it, which is the input to that decision. Which method your accounts may actually use is in stock valuation for your accounts.

Common questions

My supplier raised prices. Do I have to change the cost price in Shopify?

Yes, if you want your margin and profit reports to mean anything. Shopify holds one cost per variant and it does not change by itself, so until you update it, every sale of that product is scored against what you used to pay. Change it to the blended average of your old stock and the new batch rather than straight to the new supplier price, because you are still selling units you bought cheaper.

How do I work out the new cost price after a price increase?

Multiply the units you had by their old average cost, multiply the units that arrived by what that batch cost landed, add the two, and divide by the total units. That blended figure is what a unit on your shelf now costs on average. It moves closer to the new price with every delivery and only reaches it once the old stock has sold through.

Should my cost be the new supplier price or the blended average?

The blended average, for as long as you still hold stock bought at the old price. Jumping the field straight to the new supplier price understates your margin on every old unit you are still selling, which is the same error as leaving it alone, pointed the other way. The average becomes the new price by itself once the old stock has sold through.

Does a supplier price increase change how much I should order?

Not the number of units. Quantity follows your sales rate and the supplier's lead time, and a price change moves neither. What it does change is the cash the same order needs, which goes up by the increase times the quantity and falls due at the deposit rather than at delivery. It also changes whether a minimum order quantity is still worth accepting, because the surplus units are now dearer to hold.

How big a cost jump is worth investigating?

A useful default is double or half the previous figure, which is the threshold Restocio ships with and which can be tightened to 1.2 times. The point is not that a large jump is wrong. A raw material spike, an air shipment or a change of Incoterms all produce real ones. It is that a slipped decimal produces exactly the same shape, and no software can tell those apart without asking you.

Should I raise my selling prices when a supplier raises theirs?

That is a pricing decision and this page cannot make it for you. What it can tell you is the size of the hole: work out the blended cost after the increase, compare the margin at your current selling price with what you were reporting before, and decide from a real number rather than the one the store is still showing.

Marcus Volsted

Co-founder, Restocio

Marcus co-founded Restocio and works on it daily with a Swedish importer who plans their purchasing in it every working day. Restocio is built in Sweden by two founders, one Swedish and one Danish, and Marcus is the Danish one. Most of the examples on this blog come from that store's real ordering decisions rather than from a textbook. Why we are building it.