54% Cumulative Tariffs from China announced Today
What will you do? Will you be able to pay for these tariffs?
Will you limit your imports?
Will you increase your prices?
Will you go out of business as a 3rd party seller?
0 replies
Seller_pNjOVnF8a0aBi
I sell a lot of Chinese made stuff, but not much on Amazon. For me the big deal is the rest of the world. I'm the US distributor for a German line that has no equivalent anywhere. Time will tell if it will hold up to a substantial price increase.
Seller_DdmPiA1p1S2Wu
The items I import come from Taiwan, so they now have a 32% tariff, up from around 2.7%. It's a crazy high jump. On some products that I have less margin for and have buyers who purchase them regularly, I am having to raise the price on the products by the additional tariff amount. (With the additional tariff I would be selling them at a loss if I kept the price the same.) For other items where my margin is better, I'm taking a wait and see attitude at the moment, but unless something happens and these tariff amounts go down, I'll likely need to raise the prices on them as well. Not really sure what to do, kind of in shock.
Seller_HP0CuTSNvJvu9
For the brands we sell but don't own, I will increase my prices on products subject to tariffs and look for more competitive American made products. All of the brands my company owns are American made from American materials anyway. No, I'm not going to go out of business as my competitors are paying the same price increases.
Life will continue on.
What will you do? Will you be able to pay for these tariffs?
Will you limit your imports?
Will you increase your prices?
Will you go out of business as a 3rd party seller?
Seller_r9wMm8LrE5iKj
Popcorn is at the ready!
I think the story that's getting buried is dropping the de minimus on small packages shipped in; that plus the asymmetry in international postal rates was driving a LOT of non-Amazon/non-FBA sales of junk, and that will likely all go away as DTC stuff means somebody has to start paying something/a lot when previously they paid almost nothing. [Renegotiating the postal agreements would have had much of the same effect, and saved the USPS from attempts to strangle it]
On the FBA front. I suspect Amazon has a few weeks of inventory, on average, of pre-tarriff Chinese garbage, so there will be a lag before we see a LOT of cheap items disappearing from the site. Ditto for people who will have to raise prices on FBA items, but maybe not on the stuff already in transit/warehoused. After that, the product mix (and prices) will change a LOT, and I think you'll be looking at a very different site, due to the attitude from a lot of buyers that the cheapest option presented to them is the best (yes, that's not a universal attitude, but it does drives Amazon's contribution to tempering inflation).
The calcs for the tariffs are absurd (based on trade deficit, which is not the same as reciprocal tariffs), as they most punish American companies that were already making products that Americans bought/wanted more than foreigners did. But if Our Orange Overlord doesn't do a 180 in a few days, which is not impossible, I think this site will be one of the ones most affected, due to their massive onboarding of Chinese sellers in recent years, and their p-poor attitude toward domestic sellers.
Another prediction: we're already expected to have negative GDP growth this quarter, and that's with a lot of business activity due to people trying to get ahead of tariffs. I think business spend will drop off a cliff, which will have broad implications that I don't see being addressed ... most of what I'm reading is presuming businesses will buy as much stuff, and just pay more for it (which is not how supply-demand works).
Almost all our brand-registered goods have an international component (but not Chinese), and this will finish destroying us. But Amazon long ago permanently damaged our brand, so this will simply push us into retirement. Although we're in a minority there, I think there will be some of this, and some businesses that were struggling for which this will be the last straw. Another driver of negative GDP.
Could Trump finally get his long-promised 4% GDP change? If you don't pay attention to the sign (+/-), I think so. Hold on, this is going to be chaotic.
Seller_PCshC7t8gZjqm
My advice to people is to try to keep your margin % the same, not just margin $. E.g.: if the tariff adds $10 to your product cost, don't just raise the price $10 or you'll start falling behind. You're going to pay Amazon fees on the additional $10 selling price, which means you really only increased your cut by ~$8.50 (depending on category), but still have to pay the extra $10. When you factor in costs of returns, etc., those higher costs will further eat into the price increase.
Keep your mark-up % the same wherever possible and invest in tighter pricing / promotions / whatever where you NEED to do it.
Seller_Ggt6s7zXEwLbA
Amazon stock currently down 9% for the day and 20% since Jan 1st.
As someone else noted: that's what you get for "massive onboarding of Chinese sellers in recent years, and their p-poor attitude toward domestic sellers."
There's a famous 2022 memo about Amazon needing to readjust its p-poor approach to domestic employees or it was going to run out of people in the US willing to meet its labor needs.
IMHO a similar readjustment needs to be made in the approach to sellers or it's going to be a bloodbath when China blockades Taiwan.
Seller_qMgi7qxvEo7f1
I don't even know what's going on. There are new tariffs every day, I'm not an expert. I just buy and sell stuff, barely make a living. If it's a tariff on everything, and not limit, then it means I'm going to bankrupt and that's about it. Then what? The government is setting up a welfare program for those who lose their business because of the government's nonsense actions? I have no idea what's going on at this point. I'm just depressed because of all these things are happening. I was expecting a relaxing 4 years, not this. I can't increase prices, that's for sure. I barely have any customers now, just enough to survive. If I raise prices I lose them and I get zero income.
Seller_VypIP38Skxj6e
I sell toys. I don't see toy production shifting to the USA.. I sell gloves made in Pakistan. Pakistan understandably as a poor small country hardly buys stuff from the USA so they got hit with a large tariff. Where can I get gloves made? There are not workers in the USA willing to sew gloves and other clothes. Currently these products are made in Asia, india etc... all hit with large tariffs.
Seller_P0yemOBQAaYOb
The question that needs an answer:
Will Amazon let the sellers raise their prices accordingly?
Seller_pNjOVnF8a0aBi
Hit or miss. I've been playing with it, increasing by the amount I expect to see plus 15% of that amount to cover fees. About 25% of the buy boxes go away. Only seller, no competitive price. Generally on the more expensive items, but even there it is scattered. The first container I will get with the new tariff is likely to hit in about a month, but I need the additional revenue to pay for it.
Seller_oEw5wUNHgJxxP
Your stats show you have not been here long.
For us you should have asked "What have you done?"
We have been in this game for 35 years. We have always looked to keep our suppliers on shore right here in the USA. We make products right here in America. And raw materials made in America. We buy materials as local as we can, some within the same state, some in the region, and others in the Great United States of America.
Out of one of our brands, we only use one component from China, it is now about 1.1% of our CoGS on one of our brands. About 0.4% of all of the products we manufacture.
Even our shipping supplies are sourced and made within our region.
You can do this and solve your problem.
Though we have clearly been working on this path for a few decades.
Seller_BQgZAEuoAe5oc
hey, just out of curiosity, why didnt you guys apply for a trademark during 35 years of manufacturing and selling
Seller_V0hze4HocU3cp
Good for you, but I can almost guarantee that NO ONE here in the US wants to work in a factory making what we sell at minimum wage. It is simply not feasible for the majority of importers. Especially small businesses that simply do no have the capital nor resources to "build a factory" here. The materials here are expensive and the labor is even more expensive. Plus not all the materials can even be sourced here. Some of our materials would come from Canada which also has a huge tariff levied on them. Reshoring simply does not make sense for many industries.
Seller_4mtlGtoHN5tIN
You make a valid point however, what our president is doing is for your children and future of America. If we continue to rely on China and other countries for our goods and resources than they ultimately control our country. Covid was an unfortunate example of what can happen when a country does not have their own resources readily available, has everyone already forgotten?
As some sellers have pointed out, it definitely not impossible to source and manufacture in America. Once upon a time during WW2, just about everything was made here and the job market was booming. It may be a difficult adjustment at first, but anyone who produces in the U.S will be the winner long term.
Seller_pixSY1g97J4aL
Good luck trying to source USA grown coffee, or perhaps you might venture into French Wine or Belgian Chocolates. These are quite simply not produced in the USA. Maybe you would like to start making toasters. Am pretty sure US consumers will be rushing to buy them at $125 rather than $29.
Like it or not US companies have been exploiting poorer countries for years to make the products they sell for less than they could do at a US factory. Whilst China has openly built up its infrastructure to be the world's factory you cannot blame them for simply supplying a need.
If US companies had not focussed on bigger and bigger margins by finding the cheapest place to make their product China would have never set up manufacturing in the first place.
I would gladly use a US manufacturer if I could get the product made at a price consumers are willing to pay
The system of trade that has evolved over 80 years is not about other countries ripping of the US it has primarily been fuelled by meeting consumer demand. I am not a fan of the throw away society that we have become but the fact of the matter is that market places like Amazon are greedy and have conditioned consumers that cheap is best. They simply want to process as many sales as they can and believe that driving prices down is the best way to do that. If you want to blame anyone blame Amazon and it's greed.
Have a look at their newly proposed fee structure. Greed Greed Greed
Seller_4mtlGtoHN5tIN
You are correct about Amazon being a very greedy company and pushing the cheap crap first, they are indeed one of the biggest reasons why China has grown exponentially in the last several years. Amazon drastically favors the Chinese sellers and products over U.S based sellers. However allowing complete CCP run companies like Shein and Temu to freely enter the U.S market was just absolute stupidity by the U.S government.
I would much rather pay a few bucks more for a quality American made toaster over Chinese garbage, it won't be double but you ca expect 20 - 30% more in the beginning. Once the ball gets rolling, they will only get cheaper over time, it's a process. Samsung and LG both making big moves already for Television manufacturing in the U.S.
You have to remember one thing, it is going to be mostly newer Ai powered robotics doing the manufacturing in the U.S, not so much humans. They will however be working on the robots and monitoring/maintaining/programming etc..
We already have many appliance manufacturers here in the U.S for example GE, Wolf, Frigidaire, etc.. who use both robotics and humans.
All I can say is it is going to be an awesome time in history for the United States and its citizens, I am very excited and almost everyone I talk to weather be a blue collar worker or entrepreneur feel the same way.
My father who was born and lived in a different country always tell me in the 50's 60's era, American goods were king anywhere you went in Europe for example. The hoover vacuums were highly sought after, Chevy, Dodge, Ford. etc.. were all highly recognized due to the American made with American parts quality of the era.
Seller_AJxxLujbGDqaW
I suspect that you are in the 1% of businesses in the U.S that have this model.
Seller_oupwive05mS0C
I was shopping at a flea market and handed a $20 bill to a high school student to get change — but she didn’t know how to give the correct amount back. Why aren’t we fixing the education system first, instead of imposing massive tariffs that hurt the U.S. economy? In America, who can truly live well during an economic downturn?
Seller_4mtlGtoHN5tIN
K-12 Education is another big issue and is going to be overhauled drastically which is way overdue. This will be quite challenging given how bad it has gotten in the passed decade or so. There are so many kids self-educating nowadays due to the very poor education systems that are currently in place especially in large population areas like Los Angeles and New York City.
Almost all the kids I knew of more recently in my home state of California who were attending public schools either started home schooling or taking the exit exams to go directly to community college.
The don't teach the core principles (Math, English, History) anymore apparently. The focus is DEI and crazy non-sense theories/agendas from what I have been told by many kids.
Ai also has also caused problems, there is no more critical thinking. When I was in grade school, we had to cite anything used off the internet for the teacher to look up and make sure it is not being directly copied. The teachers are overwhelmed and don't even try anymore to make kids work hard.
Seller_wM0nLLkM8WJfx
It amazes me that IMO - most of you making comments about Tariffs are MAGA and you went to the rallies and he said "tariffs are a beautiful thing". Did you not believe him?
Seller_xo4Akj7FBBnfC
Our products are made with approximately 96% U.S.-sourced content. However, every one of our suppliers still relies on some raw materials from overseas.
Unless you're building wooden furniture from trees in your backyard and making the glue from your own horses, your supply chain is likely more dependent on imports than you think.
Seller_Sram36TnVt73c
yes.
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Seller_g7PbGX1YRsgM8
People DO not panic like the slanted news media. Just understand this. Vietnam has just signed a contract with the USA for no tariffs from each country. What does that mean? Well they will be our biggest importer of rubber. That will lower prices on many many products. They are also becoming a force in the medical glove area. Prices will go down on ALL gloves if other countries like CHINA and Pakistan etc. that make gloves will also have to lower there prices in order to compete. IN the end USA hospitals and doctors will save on gloves purchasing. Fifty other countries are now talking about getting rid of there tariffs on USA products. BE PATIENT.
Seller_Y4Ggqoi1ip87c
It could be as high as 89% cumulative. There is still alot to be open for interpretation
So we have the 25% Section 301 Tariffs that have been in effect for a few years now|
20% Tariffs for the fentanyl thing
34% reciprocal Tariffs
10% base line reciprocal tariffs on all countries (we still dont know if this will be part of the 34% or in addition to)
Best case 79%. Worse Case 89%
The question is, is Amazon going to remove the buy box when all the sellers have to jack up their prices on the next import. I know the answer will most likely be.
P.S.: Trump just announced that if China doesnt remove their retaliatory tariffs, we could see another 50% tariffs effectively knocking the cumulative over 100%!
