It’s time to start talking to your customers about the increased pressures you’re under because of rising wholesales prices. Don’t see it as a sign a weakness; it will likely put you in more of a position of strength with them over the long haul.

It’s clear to all of us manufacturers and distributors have been stripping overheads and cutting margins to the bone for the past two years. Our clients are telling us there really is no capacity to soak up any more margin pressure. Price hikes are definitely on the horizon.

To keep your relationships strong and your company growing, begin now telegraphing your circumstances and setting expectations for forthcoming seasons. If the Recession taught us anything, it’s that it is never good to ignore early warning signs.

Analyze how rising prices from your suppliers and the demand dynamic of your customers’ business will affect your bottom line and start adjusting appropriately now. The trick is to get your prices up more than your costs without damaging your demand. Not an easy trick to pull off by any stretch. Buyer relationships will be key.

Also, take a fresh look at the product you’re delivering. As price tags go up, quality and design will be strong differentiators for consumer demand. Inflation will weed out inferior products with bland design, taking some of the stodginess out of the market and opening up opportunities for design-driven products.

I remain optimistic that overall demand will continue to recover in 2011 as consumers move back into traditional buying patterns and eventually get used to paying more for goods.