Figure 1:  Percent increase in insurance and web costs compared to those in 2017.

 

Over the first five years that I had been in business, the total cost increase was 9.2%--pretty much in pace with modest inflation.  Most of the increase came from insurance (6.8%).  The other two increases were for the web domain name and email (41.3% and 47.1%, respectively), but those were small in magnitude relative to insurance and website hosting.  Beginning in 2022, however, costs began increasing dramatically.  For the five years from 2022 to 2026, the insurance premium increases were 6.2%, 6.0%, 8.0%, 9.7%, and 7.2% above their previous years’ values—cumulatively 42.9% since 2021.  (I’ve found similar increases in my personal insurance policies, particularly medical.)  The web domain name and email had single increases during this latter period (10.0% and 16.7%, respectively), and web site hosting had a single increase of 55.6%.  Collectively, the increase among the four fixed costs was 41.2% from 2021 to 2026.  To put this in perspective, the total increase for the ten years I’ve been in business was just slightly higher:  45.2%.

 

Variable Costs

Variable costs are for items that the business purchases when running out of the supply on hand.  Such include solutions for maintaining equipment and cleaning records and tapes.  Those are relatively low-costs and need replenishment every few years.  I’ll certainly encounter price increases in the future, but for the time being I’m ignoring these items.  Where I’ve recently encountered noticeable increases are for my deliverables, mostly CDs and cases.

 

Since 2017, I’ve purchased consumer-grade 700 MB CD-Rs and slim and full-size cases from a local electronics store.  When checking current prices in December, I found that this store’s price for CDs had increased by about 50% and that they had discontinued CD cases (other than colored slim ones, for which I have no use).  This sent me searching for other sources.

 

The best option for consumer grade CD-Rs turned out to be the same brand that I’ve been using.  Its price is 40% higher than I had been paying.  The increase doesn’t appear to be restricted to my electronics store.

 

I have used two brands of 700 MB silver CD-Rs (those with a projected life span of 50 years).  One was discontinued by the manufacturer and, as far as I could tell, is no longer available anywhere.  The second is still being made, though the company I had purchased from is no longer in business.  The best deal on this brand reflects a 31% price increase.  During my search, I uncovered ambiguity in product descriptions.  CD-Rs advertised as “silver” might refer to the color, coating, or composition, and I’m only interested in composition.  The product I use has a critical characteristic that other brands don’t include in their descriptions, and brands that failed to cite it were immediately eliminated from consideration.

 

The company that discontinued manufacturing 700 MB silver CD-Rs also discontinued 650 MB silver CD-Rs and 650 MB and 700 MB archival gold CD-Rs (which have a guaranteed life of 300 years).  The latter three products are still available from several vendors, but the prices reflect 367% (!), 69%, and 52% increases, respectively.  The vendors’ supplies will eventually run out, and I’ll need to find appropriate substitutes—likely to be even more expensive.  (A substitute 700 MB archival gold CD-R that I have used has disappeared altogether.)  A particularly disturbing finding in my search was that a well-known company offers “archival gold” CD-Rs at a very good price, but the projected life expectancy is only 100 years.

 

I compared several brands of CD cases and settled on the one that offers the best prices for slim, full-size, and two-CD cases in the qualities and quantities I need.  Unfortunately, the costs of these three types increased by 317%, 171%, and 67%, respectively.  Though the country of origin isn’t specified for these products, I suspect it’s China or a southeast Asia country.  If this is correct, then the increases are due in large part to tariffs imposed in 2025.  The same may be inferred for CD-Rs.

 

Implications for Businesses

An article in The Washington Post (“Companies Cite Inflation, Tariffs in Bankruptcy Surge,” Aaron Gregg & Jaclyn Peiser, December 28, 2025) stated that more than 717 large companies had filed for bankruptcy during the first eleven months of 2025.  This was 14% higher than the first 11 months of 2024 and the highest rate since 2010.  Reasons cited included inflation, increasing interest rates, and trade policies that pushed up costs and disrupted supply chains.  Unlike previous years, the increase in filings was greatest among industrials:  manufacturing, construction, and transportation.  (The manufacturing sector accounted for over 77,000 lost jobs during the past twelve months.)  Consumer-oriented business offering “discretionary” products or services had the second highest filing rate.

 

The reported findings are relevant for small businesses as well.  While updating my market survey for 2026, I was disheartened to discover how many companies providing audio conversion services had gone out of business.  The market surveys I conducted from 2016 through 2024 reflected services and prices of between 18 and 22 companies.  That number dropped to 12 in the December 2025 survey.  (That number included two new companies but excluded two that my antimalware application blocked, suggesting that those two companies were not maintaining their web sites adequately.)   I suspect the factors leading to audio conversion business closings include inflation (certainly contributing to the rise in my costs) and tariffs likely underlying the large increases in CD and case prices.  The cited article noted that the average American is likely to pay about $1,800/year resulting from tariffs, and this will certainly take a bite out of discretionary spending.

 

*  I had planned to post this article in January after raising my prices.  Personal responsibilities got in the way, and when I turned attention back to it, the U.S. tariff policy had turned inconsistent, and the U.S. had started a war with Iran.  I anticipate that this fall’s market survey will reveal additional increases in the costs of products and services my company uses.

 

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