President Donald Trump announces 5% tariff on all goods from Mexico

Jul 2018
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Trump World! Where the circus is always in town.
I didn't say that my COG was 10%. I'm saying that the initial unit purchase price spent on the sum of units totals only adds up to 10% of total expenditures. The way that the 10% number would change would be based on volume because some expenditures are almost entirely fixed, such as mortgage/rent, property tax on buildings/fixtures, electricity, phone, listings, licensing fees, etc.
I understood, I have never seen anything anywhere near 10%.



As for your second part, I also deal with EU. Unfortunately, much of what is needed to get things made or assembled in the EU also relies on Chinese sourcing. One example is that every UL listed power cord and plug on items coming from the EU originates from China, so the lead time is doubled. There is also an on and off trade war between EU and China that people don't talk about much.
The EU manufacturers something? Anything? lol
All the EU companies I presently rep and have in the past source in Asia.
 
Sep 2017
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Hell
I understood, I have never seen anything anywhere near 10%.





The EU manufacturers something? Anything? lol
All the EU companies I presently rep and have in the past source in Asia.
That is because you are focusing on COG, not unit cost. Tariffs do not impact the cost of the container, the freight, custom brokerage, and trucking it to point of storage. It costs more to get a container from the port than the ocean freight from China to port of entry.

A lot of production has gone to Poland, Hungary, and Czech Republic. Not EU, but Ukraine is also in the mix. Just stay out of anything that was original NATO, and things can be made fairly cheaply. Nice thing is that all those countries are proficient in English so easy to communicate with, and you can actually trust them with not skimping or substituting without your consent. They don't knock off the product and brand it themselves as the Chinese tend to do. And you can have it packaged and branded there without worrying about ending up with the embarrassing Chinglish on your packages.
 
Jul 2018
4,410
1,985
Trump World! Where the circus is always in town.
That is because you are focusing on COG, not unit cost. Tariffs do not impact the cost of the container, the freight, custom brokerage, and trucking it to point of storage. It costs more to get a container from the port than the ocean freight from China to port of entry.

This is not my end, as I said, I am in sales but I hear these numbers all the time in casual conversation. I am now curios, I will pay more attention and ask questions for my own edification. I am having a real hard time swallowing the 10%. I am not disputing, I just need to see particulars as I am intellectually curious on all subjects and need to how and why not just what.

Just last week I asked a pointed question about my treatment from my doctor. Upon rephrasing my question for the second time he replied, "I don't know, it's just that it's protocol." Fair enough but I had to understand the why so I thank him and sourced the info alternatively. Why was it the protocol? I now know. Yeah, I am nuts, :D

Thanks for your time
 
Sep 2017
2,456
1,219
Hell
This is not my end, as I said, I am in sales but I hear these numbers all the time in casual conversation. I am now curios, I will pay more attention and ask questions for my own edification. I am having a real hard time swallowing the 10%. I am not disputing, I just need to see particulars as I am intellectually curious on all subjects and need to how and why not just what.

Just last week I asked a pointed question about my treatment from my doctor. Upon rephrasing my question for the second time he replied, "I don't know, it's just that it's protocol." Fair enough but I had to understand the why so I thank him and sourced the info alternatively. Why was it the protocol? I now know. Yeah, I am nuts, :D

Thanks for your time
No problem, glad to try to explain that unit price of a product before adding all the other expenses associated with COG sold varies according to product/industry/business model.

In my case, because I sell things that no one actually need, that means I have to be found and and seen by lots of people with sizable disposable wallet. That means that I have to be in rather high traffic expensive area. What I sell requires a lot of electricity, water and floor space, and to sell them, it requires many of them to be running a displays. Because off all the heat and humidity, damn air conditioner and dehumidifier running hard pushes electric bill even higher. All that electricity and water in all that space, plus placing them into expensive homes makes insurance companies nervous, so I'm like one of those guys with a medical precondition that are subject to super high premiums. I can't store too many because fear of moisture, so the bulk of it has to be warehoused away, which adds more expenses.

Yes, so it does take $90 dollars to sell something that only cost $10 before it is actually loaded into a shipping container. The tariff only impact the $10, so a 10% tariff makes it an $11 item before all other expenses, which are still more or less constant. The smaller the actual net unit cost of the item in ratio to all expenditures, the more one needs to concentrate on not losing sales, which includes perhaps eating the tariff, at least for the short term if a company wishes to remain viable.

Also, COG do vary depending on the accounting method or form, such as Income Statement, Periodic Inventory System, or Perpetual Inventory System. Put ten accountants in separate rooms with all the numbers, and they'll come up with ten different ways to document it on paper. I am not a practicing accountant, but I did earn an accounting degree more than three decades ago.
 
Dec 2018
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New England
The key distinguishing feature of the 20 year period I was referring to is that it was the last 20 years. That's not cherry picking, that's data.
You're referring to period between 20 and 40 years ago is cherry picking.
No, cherry picking is when one chooses a peak (say, '99) as a starting point in order to show low growth.
 
Dec 2018
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New England
Look at the simple math. If cost of the product is only 10% of total expenses, a 25% tariff will only make the bring the it up to 10.25% at the most, IF ALL your products were hit by said tariff. It does not impact your imaginary 10% margin anything close to your claim. There is an impact, but nothing close to your doomsday imagination. The ones that are truly impacted are the ones that export to China because they face the reciprocating tariffs.
Yes, let's review the simple math.

Your widget costs $90 to make. You sell it at $100. A new 10% tariff is applied to the $100 price, so it's an add of $10 to the per unit cost of widgets sold in that market. So your profit margin on the product in that market can go to zero or you can raise your prices. Which do you do?