I went browsing at Grizzly and noticed many of the prices now
featured an added "tariff fee" of about 20%. Maybe it has been
this way for while and I just noticed? When I searched online, I
found out that even people who already had orders in place were
informed that a 20% fee would be added. Just out of curiosity,
what is the actual amount of the tariff? Are they already
charging it at the border? It must be more difficult to sell
Grizzly tools after an instant 20% markup... I read that Harbor
Freight is following suit (I don't know if that's true or not,
but have little doubt that higher costs lead to higher prices..).
On Tuesday, September 25, 2018 at 4:02:26 AM UTC-4, Bill wrote:
I can't speak to the exact amount of the tariffs, but...
First, I wouldn't be surprised if there is some amount of price gouging
by companies that raise their prices on products that are already on the
shelf and not impacted by the tariffs. Just like when gas prices go up at
the first mention of a hurricane, even on the gas that is already in the
local gas station's tanks.
I heard an interview of the owner of a company that makes specialty
waterproof lighting (scuba lights, lights for TV stations so they can
film the reporter out in the storm, etc.) He buys his parts from China
and assembles the lights in the US. It's the parts that will impacted
by the tariffs. Meanwhile, some of his competitors also buy their parts
from China, but they have the equipment assembled in "most favored nation"
countries. No tariffs on the Chinese parts going into those countries and
no tariffs on the fully assembled product coming into the US. The owner
said that he will not be able to compete with those companies unless he
moves his assembly operations overseas.
The interview did not include the question "How many American jobs
will be lost?"
My concern is that even if the tariff scheme is a negotiating tactic being
employed just to bring the Chinese to the table, companies such as this
lighting company have to do what they have to do to stay in business *today*.
They can't wait for the ploy to play out. Once they set the wheels in motion
to send the jobs overseas, it probably won't get undone even if the tariffs
There are also companies that are adding jobs because of the tariffs.
We have to wait it out, we have no choice.
We've been on an un-level playing field with China for too long and
something needed to be done about it. These tariffs are a step to
turning the tide. China doesn't want to lose its biggest market. Is it
a Chess match? Yes. But at least we're finally at table.
"Playing is not something I do at night, it's my function in life"
On 9/26/2018 9:33 PM, firstname.lastname@example.org wrote:
That's true enough, but there's a new sheriff in town as we've noticed.
Could be that this time somebody else's feet are going to be held to the
fire until they can no longer walk.
Just have to wait and see.
It is a long standing way of inventory cost control. Some businesses
change the value of all of their inventory when cost changes go into
effect vs. selling on hand inventory at the old cost and changing prices
on the replacement inventory. Each method has it's advantages and
On Tuesday, September 25, 2018 at 6:39:51 AM UTC-5, DerbyDad03 wrote:
The retailer is simply charging replacement cost on the inventory he alread
y has. When the retailer sells the current inventory that does not have th
e tariff, he has to replace it in the future with inventory that will have
the tariff. To do that and maintain profit margin, he has to sell the unta
riff inventory at the tariff price.
Think about real estate. You buy a house for $100,000. You decide you wan
t a new house, in the same neighborhood. But the new houses sell for $200,
000. Do you sell your old house at $100,000, because that is what you paid
for it? Or do you sell it for $200,000 to allow you to buy a replacement.
On Tuesday, September 25, 2018 at 3:40:57 PM UTC-4, email@example.com wr
ady has. When the retailer sells the current inventory that does not have
the tariff, he has to replace it in the future with inventory that will hav
e the tariff. To do that and maintain profit margin, he has to sell the un
tariff inventory at the tariff price.
If it's only about replacement cost, then you're saying that he'll lower th
price on his last "tariffed inventory" as soon as he hears that his *next*
shipment won't be tariffed.
If he doesn't then he sold at least one "inventory cycle" at an elevated pr
ant a new house, in the same neighborhood. But the new houses sell for $20
0,000. Do you sell your old house at $100,000, because that is what you pa
id for it? Or do you sell it for $200,000 to allow you to buy a replacemen
I sell my house for the highest price I can get regardless of what the next
house is going to cost me. Just because the new houses are selling for $200
doesn't mean my old house will sell for $200K. Could be more, could be less
On 9/25/2018 2:40 PM, firstname.lastname@example.org wrote:
Not the best example. Yours makes sense in the sense that when you sell
a home to either upsize or downsize you want to minimize your out of
pocket or increase the money you take off the table at sale.
If Grizzly only wanted to maintain their status quo they would sell
existing stock at cost plus markup % and leave the tariff out of it.
Let's say that they have a 9% gross margin percent over cost of goods sold.
A machine in stock BEFORE tariff cost them $100 and they sold it at
$110. That's a 10% markup and a gross margin percent of 9% or $10 gross
Now if they take existing stock and raise its cost by the amount of the
tariff, let's say the tariff is $20. Now their 10% markup is $12.00 and
they have to sell it for $132 to maintain their 9% gross margin which
now becomes $12 gross margin dollars.
If they sell one unit from stock without the tariff added in and one
additional ordered in and paying the tariff, WITH the price bump as
above, they will have paid a total of $220 and received $22 gross margin
If they bump the price of the in stock, upon which they have not paid
the tariff, but are pricing it as if they had, they end up with $24.00
gross margin dollars or the same gross margin of 9%.
On the face of it (figures lie and liars figure) the profit margin has
not changed but there is an extra two dollars coming out of the
consumers pocket on those two items and going right into the Grizzly's
Simple example, small amounts. Who cares? Well, increase the cost,
markup % and sales volume and you or I would be quite happy to accept it
as a bonus. As additional out of pocket expense for us? Not so much.
Those same consumers who's confidence is at a near record high?
Like I said, it had to be done. The Chinese were and still are playing
the game at a huge (yuuuuge) unfair advantage.
But American consumers don't care as long as they can buy their $7.99
lawn chairs and other crap that would be impossible to manufacture that
cheap without near-slave wages absolutely no environmental regulations.
In the big picture, you see European nations starting to drop their
tariffs on our exports.
If it's allowed to be played out, it will be much, much better for our
economy and workers in the long run.
"Playing is not something I do at night, it's my function in life"
On Wednesday, September 26, 2018 at 10:54:02 AM UTC-4, -MIKE- wrote:
Unless we are experiencing a feedback loop where bull markets feed
consumer confidence which keeps the bull running which increases consumer
confidence which keeps the bull running, etc. etc.
Shiller's "Irrational Exuberance" phrase comes to mind. Former Fed Chair
Greenspan used it in a speech to describe the dot com bubble in 1996, a few
years before the bubble burst.
Earnings spiked with the tax cuts early this year, so P/E's aren't out of
line - yet. Let's hope this tariff game plays out before the market is
so overvalued that it all comes crashing down.
On Wed, 26 Sep 2018 11:28:46 -0700 (PDT), DerbyDad03
Yes, positive feedback always has its risks.
...and so did GWB, before the housing collapse, in fact. It didn't
take a genius to see what was coming. People buying houses they have
no business buying and using their houses as ATMs can't end well.
OTOH, perhaps tariffs will be a better brake on the economy than the
Fed could dream of being. ...to long-term gain, as well.
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