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This is where inflation multiplies.


First the price of the item goes up by whatever amount.


Next problem however is physical availability runs short. Now instead of buying from a single supplier which is convenient to your business and getting a % discount from that supplier due to the volume of purchases you make, you're now buying a bit here and a bit there from lots of suppliers.


None of those are going to give you a discount for the small volume of one-off purchases you're making from them.


Having to physically go around lots of places, some of which may be 10 or even 50km away, chews up time and lots of it.


Then there's administration. Depending on the nature of the business, the idea of having an account with a single supplier no longer works and it's problematic to have an account literally everywhere. All of a sudden every work team, which may mean each individual worker if they're by themselves, is going to be buying things at retail price from any shop they can get it at. Now you've got a pile of administration overheads either with corporate credit cards or reimbursement of cash.


End result is your material costs have gone up, distance put on your company vehicles has increased, your workers' productivity has gone down and you're now spending considerable time administering it all.


End result is the price you need to charge customers increases by far more than just the cost of materials alone.


Then your staff politely remind you about all these price increases which you've surely noticed and say something about their wages.....


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