Tariffs Are Kicking In.

[Fred W. Hargis Jr]

I saw a post by the Grizzly owner that their prices on come stuff are going up 25% in July to cover the new tariffs (please, I'm just passing this on...I know some won't care). The tariffs apparently do not apply to those tools coming from Taiwan, so it will be quite a mixed bag on pricing as this thing sorts itself out. Meantime, in other news, the Supreme Court decided we should pay sales tax on internet orders (I still don't understand how that is a constitutional issue; Oh, well) We are getting hit everywhere with folks digging into our wallet....or at least trying to.

[Gene Howe]

Bummer! Glad I got my Byrd Shelix plane head ordered yesterday. 

[Grandpadave52]

4 hours ago, Fred W. Hargis Jr said:

I saw a post by the Grizzly owner that their prices on come stuff are going up 25% in July to cover the new tariffs

I understand their situation and potential reasoning but it comes down to a simple equation I learned years ago...C/P/V (Cost/Price/Value)...you can raise your price based on your cost, but is the value still there for said cost? Ultimately the end user/buyer determines if the price point is reasonable or not and makes purchases accordingly.

 

So while Grizzly (& likely others) may feel compelled to increase some items by 25% they also must be prepared to experience sales declines proportionally which could lead to unsold inventory...that then leads to lack of inventory turns...difficult position to be in...obviously individual's discretionary, disposal income will not immediately increase by 25% since "we" can't vote ourselves a raise so...

 

[Gene Howe]

Since tariffs can be applied and/or removed on a whim, it would seem unlikely that US tool manufacturers will take advantage. One can only hope.

[kmealy]

20 minutes ago, Gene Howe said:

Since tariffs can be applied and/or removed on a whim, it would seem unlikely that US tool manufacturers will take advantage. One can only hope.

Any of those left?

 

RE:Sales tax

 

As someone who has to collect and file sales tax, it's a real complex system.  In Ohio, each county has its own tax rate and half a dozen counties change every year, not always at the same time.  I've even had a few change mid-month so you have to report before a date and on or after an effective date.  So you have to know the exact address of the recipient to know which county it is in, and report it separately (e.g., $x for one county, $y for another, and so on.   We have 88 counties here)  You can go to Ohio's web site and type in an address and it will tell you what county it's in, then reference the current rate for that county and you can determine the tax.  And because some tax rates are fractional, my accounting system and their computations usually round a bit differently and I have to re-adjust each county out of whack (and I only have a few transactions every month, Amazon would have millions.)   But you only tell them the total sales, so it's impossible to trace back to which sale(s).

 

In addition some things are taxable and some are not.  While it won't necessarily apply to Amazon et al.   If you order food and eat it on premises, it's taxable, if you take it away, it's not.  Except that soft drinks are always taxable, though milk and coffee are not.    If you get a haircut, it's not taxable, but if you get a manicure, it is.   If you mow lawns, labor is taxable, unless you do less than $500 a year in business (lets off the neighborhood kit who mows 8 lawns).   If I work on furniture, it's taxable but if I work on built-ins such as cabinets or hand-rails, it's not taxable (tangible vs. real property??).  On their web site they say something like, "Tax laws can be complex, if you have a question, contact us."  I'd probably contact 3x and take the majority vote, assuming you get the same answer more than once.

 

Multiply that  by 50 states and some programmer has a lot of work to do.

Edited June 22, 2018 by kmealy

[p_toad]

And in Ohio you have some cities that have sales tax on top of sales tax...so the city rate is different from the county base rate.   It's like city school taxes.   The state decides not to support (anything) and the local taxes take a climb or services get cut (my kids didn't get any bus service out in the township here because of this (&%5%@*) and yet the local public school was required to bus kids to private schools.   So when the state renigged on its promise to support libraries when the intangibles tax was abolished, you suddenly saw tax issues all over the state to provide "local" coverage again.   BTW, the Hamilton county library was always nice and when younger we used to go to their branches out in Clermont county.   Cuyahoga county was always weird because they had a county library, a Cleveland library, and lots of smaller local libraries scattered around (and the two "big boys" would always be fighting about who needed/deserved it more instead of joining together).   UGH 

[Al B]

I remember when the tariff (I think it was 20%) kicked in for the Canadian cedar last summer. My local lumberyard stopped carrying its inventory because of the decline in sales. It's still available at Kohl's.

It looks like tool sales will be taking a plunge.

[p_toad]

1 hour ago, It Was Al B said:

It looks like tool sales will be taking a plunge

Especially at HF.   There's still plenty of good old (new) USA tools if you can find them.   I wonder if their steel prices will be jumping. 

[PostalTom]

12 hours ago, It Was Al B said:

It looks like tool sales will be taking a plunge.

 

10 hours ago, p_toad said:

Especially at HF

Oh NO!!!.  @Stick486, we will light a candle for you. 

[Grandpadave52]

1 hour ago, PostalTom said:

Oh NO!!!.  @Stick486, we will light a candle for you. 

SNORK!!!

[Gene Howe]

2 hours ago, PostalTom said:

 

Oh NO!!!.  @Stick486, we will light a candle for you. 

And, an altar full for Herb.

[Dadio]

[kmealy]

On 6/22/2018 at 11:58 AM, Grandpadave52 said:

I understand their situation and potential reasoning but it comes down to a simple equation I learned years ago...C/P/V (Cost/Price/Value)...you can raise your price based on your cost, but is the value still there for said cost? Ultimately the end user/buyer determines if the price point is reasonable or not and makes purchases accordingly.

 

So while Grizzly (& likely others) may feel compelled to increase some items by 25% they also must be prepared to experience sales declines proportionally which could lead to unsold inventory...that then leads to lack of inventory turns...difficult position to be in...obviously individual's discretionary, disposal income will not immediately increase by 25% since "we" can't vote ourselves a raise so...

 

 

RE: Grizzly tool, a note from the head:

Prices that will be going up on July 6th due to the tariffs. Here are some key points to note:

1) 25% Tariffs are being imposed on most machines coming from China, and not Taiwan (regardless of whether China considers Taiwan as part of its territory, or not).

2) We have also been hit with numerous price increases for material costs that have gone up around the world and therefore our actual cost increase is much higher than the 25%.

3) Our prices, on the affected machines from China, will be going up on July 6th by a straight 25%.

4) An item that is IN STOCK and shipped before July 6th will be at the current price.

5) Any back ordered item, regardless of how long ago the order was placed, that comes in after July 6th will be charged the new higher price as we are unable to take a 25% hit. This tariff is beyond our control and we are being forced to increase prices.

6) If and when the tariffs are removed, on the date they rescind the tariffs, we will reduce all prices on the affected machines.

7) Although most machines from Taiwan are not affected by the 25% tariffs, they are still affected by the material costs and those machines will increase a modest amount, perhaps in the 5% range.

8) I strongly suggest that if you have been on the fence for a machine purchase, you do it before July 6th, 2018.

All in all, due to nature of our business model (selling direct to the consumer and not through dealer

s) we will still be cheaper than anyone else in the market place, even with the price increases.

Thank you for your understanding and for your continued support.

[Ron Dudelston]

I’m still waiting on my “on sale” Grizzly planer from a few months back.  

[kmealy]

1 hour ago, Ron Dudelston said:

I’m still waiting on my “on sale” Grizzly planer from a few months back.  

Sounds like you'll be screwed.

[Ron Dudelston]

1 hour ago, kmealy said:

Sounds like you'll be screwed.

I already feel the pressure, Keith.

[Grandpadave52]

Understand why they feel it's necessary to follow this path as long as they're willing to accept an inevitable sales decline; nature of the beast.

5 hours ago, kmealy said:

s) we will still be cheaper than anyone else in the market place, even with the price increases.

Only partially true even now; H-F consistently beats them price wise on identical imported products even before the freight charges; and don't forget the free flashlight, tarp, multi-meter, or???

[Grandpadave52]

4 hours ago, Ron Dudelston said:

I’m still waiting on my “on sale” Grizzly planer from a few months back.  

It will be an even better deal now since the prices are going up.

Sorry Ron, couldn't resist...

[Kevin Beitz]

The good news is that the Taiwan made stuff is much better

than the China made stuff...