Lets say you are a kid with a candy bar stand. You buy ten candy bars for 50 cents each or $5. Then you sell them for a dollar and get $10. Mice 100% margin.

But say you buy your $5 dollar box and your supplier says sugar and chocolate prices went through the roof so the next box of ten will cost you $10 or the same dollar apiece you have been charging retail.

So do you work for a couple days selling dollar candy bars generating ten dollars total revenue when you know you are only going to turn around and have to pay the full $10 back out to replenish inventory?  Well anyone not very smart might. But a smart kid would know he had to raise his price to some point where he will still be able to replenish inventory plus still generate a profit.

That is saying nothing of income taxes due. If the kid was in a 15% bracket, he would actually be loosing money on the box of candy bars he had to sell if he sold at the "old" price because his "profit" on that box was five bucks even though his new inventory was going to cost ten.

Most vendors can figure this out. If they do not the first round of inflation, they will the second. Or be out of business if they fail to figure it out.

John