The tariff story moved from policy to invoice. Distributors are not passing all of it through — they are eating some of it, and that shows up in reported margins.
The margin evidence
- Fastenal: Q2 revenue up 14.7%, but gross margin fell 75 basis points to 44.6% on price/cost pressure. That is a distributor absorbing inflation rather than repricing it.
- MSC: third consecutive quarter of year-over-year operating margin expansion, with average daily sales up 7.8%. Scale and digital mix are the difference.
- Consolidation continues: Rexel/GCG at $1.4B, AD closing supplyFORCE, and Sonepar extending AI across 95% of revenue. Fewer, larger counterparties with more pricing discipline.
The practical implication for a plant is not that prices are rising. It is that the same part can carry different cost depending on how it is quoted, and the difference lives in line items rather than list price.
The playbook
- Unbundle every invoice. Base price, freight, tariff/duty, and surcharge have to appear as separate lines. A bundled price hides the only component that moves.
- Map each surcharge to a published index. A tariff rate is documented. A freight surcharge is documented. A “market adjustment” is not — it is margin, and it belongs in the negotiation.
- Rebuild landed cost by SKU. Most plants know their top-line spend and almost none know cost-per-part landed at the dock. Ten SKUs is usually enough to see the pattern.
- Push validity windows into quotes. A 30-day firm quote on an indexed commodity is a free option for the seller. A 7-day window or a documented index mechanism is the alternative.
- Split the buy by price sensitivity. Indexed commodities get volume commitments and index-backed pricing. Non-indexed fabricated parts get competitive quotes.
Why verifying matters more than negotiating
You cannot negotiate a surcharge you have not isolated. The plants that held margin through the last two tariff cycles were the ones that could name, per SKU, what the tariff line actually was. That is a data exercise, and it costs a fraction of one mispriced volume buy.
Catalog spotlight: power transmission and maintenance supply
RBC Industrial quotes MRO supply on an unbundled basis by default — part, freight, duty and any index-backed surcharge shown separately on the quote so the landed number is visible before the purchase order. Our line covers power transmission, bearings, linear motion, maintenance tools and industrial supply, with engineer-led application support. Send an invoice you would like broken down and we will return the line-by-line landed cost.