A good price increase letter says what is changing, when, why, and what it means for the customer, in that order and in under 200 words. For a distributor the letter is the easy part. The harder part is the increase itself: raising the right items by the right amount, so the letter explains a change the customer can follow rather than a round number across everything. Three templates are below, followed by how to set the numbers.
What every price increase letter needs
- The change
Prices are going up, on which items, by how much.
- The date
When new prices apply, and that open quotes are honoured.
- The reason
One plain sentence the buyer can repeat to their boss.
- The contact
A named person to call, not a general inbox.
Template 1: supplier price increase
Dear [name],
From [date], prices on [brand] products will rise by an average of [x]%. [Brand] has increased its prices to us by [y]% from [date], and we are passing on part of that change.
The attached list shows the new price for each item you have bought from us in the last 12 months. Quotes already sent to you will be honoured until their validity date.
If you would like to place orders at current prices before [date], or talk through the change, please call me on [phone].
Kind regards, [name]
Template 2: freight and logistics costs
Dear [name],
From [date], our delivery charges will change. Freight rates from our carriers have risen by [x]% this year, and we can no longer absorb the full cost on small orders.
Orders over [$amount] will still ship free. Orders below that will carry a delivery charge of [$amount]. Your current pricing on products does not change.
If you would like to discuss how to combine orders to stay above the threshold, I am happy to help. You can reach me on [phone].
Kind regards, [name]
Template 3: annual list price update
Dear [name],
Our [year] price list takes effect on [date]. Across the items you buy most, prices rise by an average of [x]%, mostly on product lines where our suppliers raised their prices this year. Prices on [y]% of your items do not change.
The attached file shows your current and new price for each item. Contract prices agreed with you stay as they are until [contract end date].
If anything in the list looks wrong, or you would like to review your account, please call me on [phone].
Kind regards, [name]
Set the increase before you write the letter
Customers accept an increase they can follow. They challenge one that looks like a round number applied to everything. The difference is in how the increase is built.
- Start from landed cost
Find which items actually cost more, and by how much. See the landed cost guide.
- Pass on what changed
Raise each item by its own cost increase, not a flat percentage.
- Protect the margin floor
Items that fell below the floor during the year come back above it.
- Check each key account
Look at the change on the items they buy, not the catalogue average.
A flat 5% on everything overcharges on items whose cost did not move, and those are exactly the items a buyer can check against a competitor. A 7% increase on chain, where the supplier raised prices 7%, and no change on seals, where nothing moved, is easier to defend and keeps you competitive where it counts.
The best letter explains an increase that is already fair. No wording fixes one that is not.
Timing and contracts
- Give at least 30 days' notice, longer for accounts that budget annually.
- Honour quotes already sent until their validity date.
- Leave contract prices alone until the contract allows a change. See the contract pricing guide.
- Tell your reps before the customers. A customer who hears about the increase from their rep first is calmer than one who reads it cold.
Raise smaller, more often
Distributors who change prices once every few years end up sending letters with double-digit increases, and those send buyers shopping. Raising prices when costs move, by smaller amounts, keeps each change easy to explain. An automated pricing tool watches landed cost on every item, proposes the increase item by item, and produces the customer-specific list to attach to the letter.
Reprice an item from its new cost
- Landed cost
- $11.60
- Margin
- $5.22
Common questions
Say what is changing in the first line, give the effective date, explain the cause in one plain sentence, show what it means for the customer's own items, and say who to call. Keep it short and send it at least 30 days ahead. A letter that hides the increase in the third paragraph reads as if you hoped nobody would notice.
For B2B customers, 30 days is the common minimum, and contracts often set the notice period. Large accounts that plan their budgets need longer, often 60 to 90 days. Whatever the period, honour quotes that were already sent until their validity date.
Most customers prefer plain words. "Price change" or "updated prices" are fine in a subject line, but the letter itself should say the prices are going up and by how much. Softer phrases such as "price adjustment" make the letter harder to read and rarely make the news easier to take.