How to raise prices without losing customers: distributors

How to raise prices without losing customers

By Ethan Byrne, Allodial Predict · October 16, 2026

Distributors are being pushed into price increases they didn't choose. September producer prices showed copper and brass mill shapes up 30% from a year earlier, nonferrous wire and cable up 23%, and steel mill products up 27.6% (BLS data via MDM). Few supply houses can absorb that.

Raising prices is usually the right call. Losing good customers because of how you raised them is the part you can control.

Why price increases cost customers without anyone saying so

Contractors rarely cancel over price. They already have other suppliers: HARDI's 2025 research found 83% of HVAC contractors use three or more, and the primary supplier gets about 68% of their purchases. When your price goes up, the easy move is to send a little more of the work to the supplier they already use. Your account stays open. Your share of it shrinks.

Before the increase: decide who hears it from a person

Not every customer should find out from a letter.

• Your top 20 accounts by last year's spend should get a call or visit from their rep before the letter lands.
• Accounts that buy a lot of the affected lines need to hear which items are moving and why. "Copper is up 30% on our cost" is a reason. "Prices are going up" is a prompt to shop.
• Everyone else gets a clear letter with the effective date, the lines affected, and a name to call.

What to put in a price increase letter

1. The effective date, with at least two to four weeks' notice where you can give it.
2. Which product lines are changing, not just "pricing."
3. The reason in one sentence, tied to your own costs.
4. What isn't changing: delivery, terms, the rep they deal with.
5. A real person's name and number.

After the increase: watch the next 60 days

This is where most distributors stop looking, and where the damage happens. For each account, compare the 60 days after the effective date with their own normal:

• Longer gaps between orders. A 7-day customer who starts ordering every 12 days is splitting the work.
• Smaller orders on the affected lines. They're still buying fittings from you but the wire is going elsewhere.
• A line that stops completely. The account looks active. One category has moved.

How to check this in your own data

1. Note the effective date of your last price increase.
2. Pull a sales-by-customer report by month for six months before and after it, from Prophet 21, Eclipse or QuickBooks.
3. For your top 100 accounts, compare average days between orders and average order size before vs. after.
4. Flag anyone whose gaps grew by half or whose spend on the affected lines fell by 30% or more.
5. Have their rep call this week with a reason to talk, not a sales pitch.

The cutoffs are starting points. Adjust them once you see which flags turn out to be real.

Frequently asked questions

How much notice should I give customers before a price increase? Two to four weeks is common for distributors, and more for large contract accounts. The bigger the change on a line, the earlier your top customers should hear it from a person.

Should I explain why prices are going up? Yes, in one sentence tied to your costs. Specific reasons, like copper or steel, land better than "market conditions."

How do I know if a price increase is costing me customers? Compare each account's order gaps and order size in the 60 days after the increase with its own history. Look for slowdowns, not cancellations.