CMACC Jourmal for Sep

Just curious about the talk related to the tariffs in this magazine.

If August 25th was some kind of deadline, what is going on now for the dealers that list their models at a fixed price for delivery later this year? Does this mean we will pay tariffs as an extra sale tax over the advertised price before our purchase will be shipped?

As stated in the LA Times article I poster earlier and consistent with the commentary in the newsletter above, the various postal authorities in many countries ARE NOT now shipping any packages to the US until they get a handle on "how" to do so. Collection of tariffs is the issue.

I think the short answer is yes, you will pay "someone" extra money to get your package. I was lucky until my last shipment, and DHL requested $60.00 for delivery. That was the tariff they paid. 

Some eBay pages speak to this issue. It is on the right side of the page, just under the sellers "location". 

I have stopped purchases until it is worked out. To me, this is only a hobby (one of several). I have many other things competing for my time. I will get back to purchases in due time. 

@lloyd-mecca I don't buy overseas not even in Canada since a long time. I just have one model on order from a US dealer. This will be interesting to see what will go on.

I just received a shipment from China that has a 30% tariff to be paid before delivery. The carriers seem to have worked out the collection issue. Payment goes directly to them, or they will not deliver the package. Our dealers will be paying similar fees. 

Posted by: @nickies

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Just curious about the talk related to the tariffs in this magazine.

If August 25th was some kind of deadline, what is going on now for the dealers that list their models at a fixed price for delivery later this year? Does this mean we will pay tariffs as an extra sale tax over the advertised price before our purchase will be shipped?

 

Dealers are in a real pickle right now. The way it normally works is that dealers place their pre-orders with the manufacturer or wholesaler as soon as a new model is announced. Typically, this is about four to six months in advance of the actual release. Some popular models sell out within a few days of being announced, so the dealer has to act fast.

For the last 8 months, the dealers have been completely in the dark about what the models are actually going to cost them upon arrival. It is tough to forecast profits when the tariffs are changed on a whim, with no logic or warning whatsoever. They just have to wing it.

The only sure-fire way to avoid tariffs is to not order any new product at all. Not exactly a good solution if your goal is to stay in business. So, dealers have the choice of going out of business, or paying tariffs. This is extortion, plain and simple. Customers can choose not to buy an item with a tariff; the dealers do not have that luxury.

Another option is for the dealer to place an order with the factory, and set the retail price after the goods are delivered. It is hard to pre-sell goods that have no price, so pre-sales plummet. Pre-sales are an important part of cash flow for dealers; reducing that can have a major impact on profitability. The customers that DO place pre-orders may or may not cancel the order once the tariff is added.

Dealers could set a price with a disclaimer that the cost of tariffs will be added as soon as they are known. Same problem as above...pre-orders will be fewer, and cancellations will be more common. Another issue is that most out-of-the-box eCommerce software simply has no way to add a line item for tariffs. The sales tax is automatically calculated, so the tariffs cannot just be added to that line. It wouldn't work anyway; that would cause absolute mayhem with sales tax reporting to the department of revenue. 

Dealers could increase the price of the goods by however much they think will cover the tariffs, but that is a crap shoot. If you guess too low, your profit goes away. If you guess too high, you run the risk of losing sales. At this point I want to give kudos to @goldvarg for absorbing a majority of the tariffs on his latest batch of models. His price increase DID NOT cover the entire cost of tariffs, the rest came out of his pocket. This is a very classy move on Sergio's part, and shows that he is in this business because he is passionate about it, not for the money. He may or may not be able to continue this practice indefinitely, but I assure you that he will not raise prices again unless he absolutely has to.

There is just no good solution for dealers right now. I don't blame any collector for not wanting to buy a product with a tariff attached, so now might be a good time to shop for older models that you may have missed when they came out. Right now, you can still find a lot of brand new models at pre-tariff prices. This is a good way to support the dealers you buy from, without having to throw money away on extortion.

Another thing to keep in mind is that some of the smaller manufacturers are really hurting right now. The US is a huge market for some of them, so the reduction in orders from dealers is causing layoffs and production delays. For those who are still shipping to the US, anyway.

Dear Dave Gilbert, you know from first hand my decision of absorbing the majority of the tariffs from my last shipment, and help the collectors pockets.

But is not only that. 

I also have a serious disadvantage as my direct competition that comes to the United States, they do it without paying any Royalty Fees to any of "the big three",

which I must do as I am based here.

The Licensor for Chrysler has been asking me for a ridiculous amount of Royalty fees, thinking that I am Mattel or something like that. 

The worst part of that is that he still denies to me the Licensing Agreement due to the low amount of money that they will do with me.

But he don't care about all the other brands that make Chrysler models, being based overseas and selling freely their scale models in US territory.

Seems that the Chrysler Licensor don't care about the small manufacturers of 1950's to 1970's Chryslers models that are being imported without paying a dime in royalty

fees.

This is the reason why I don't manufacture Chrysler models.

And everyone knows the scale car brands I'm talking about...

We all owe a deep debt of gratitude to Sergio. His commitment to the hobby is unparalleled. Thank you, Sergio!

Very kind of you, dear John!

Posted by: @goldvarg

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I also have a serious disadvantage as my direct competition that comes to the United States, they do it without paying any Royalty Fees to any of "the big three",

which I must do as I am based here.

Very good point, Sergio...many thanks for responding!

Posted by: @jkuvakas

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We all owe a deep debt of gratitude to Sergio. His commitment to the hobby is unparalleled. Thank you, Sergio!

X 100!

Posted by: @daveg

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I am confident that the tariffs will be abolished at some point; they are simply unsustainable. The only question is how many honest businesses it will destroy in the meantime. 

 

This is the sad reality that our country needs a serious cash influx to continue to pay for all the programs we are entitled. Income tax increase is not possible but tariffs are not perceptible directly to the average consumer.

At the risk of sounding overly simplistic, the tariff issues we face currently seem to me to be extremely high stakes poker being played by world leaders.  All in order to restore some valid historical trade imbalances, force certain long unaddressed NATO financial compliances, battle international organized drug crime/cartels from killing/abusing hundreds of thousands of people annually and impacting/upsetting international economies, stabilize illegal immigration, bringing some manufacturing base and related domestic trade and good jobs back to North America, setting the stage for upcoming trade agreements, just to name a few. There are many more reasons for recent tariffs, some valid and some less so IMHO.  Tariffs are an extremely complex issue that obviously and understandably is causing extreme consumer/retailer upset.  The counter however is to do nothing and continue to see our North American powerbase, quality of domestic and professional life and world influence eroded at the hands of certain foreign powers; whose ultimate long game goal is to destroy what we have achieved in the past several hundred years.  

Just one persons opinion and food for thought....not a request for debate on this forum.  Thank you.

@jkuvakas +1  Thank you so much Sergio!