Earlier this month I was concerned to see the news on tariffs for import/export with the US.
As I export low-margin goods wholesale to the US from the EU, to have a 20% tariff is not good. I have a higher gross margin than that, but not some fantastic margin.
I was relieved to see the 90 day pause, but aware that the 10% universal remains in place and it may become 20%.
Now that I have had time to think, I see several ways to deal with this, and I am no longer so negative.
In fact, I think despite the tariffs, I can grow my business and export more to the US. How is this possible?
1. My competition outside the US is also affected by tariffs.
2. I contacted my US customers if they are willing to pay the tariff or split it with me.
3. I can use customs brokers and certificates, like a US 'country of origin' to reduce the tariff-able part of shipment value, as some component of my products are in fact made in the US originally.
4. As the US has most of my customers I tend to spend most of my focus on it. This means I probably neglected to improve my sales to other countries where I already sell, like the UK and Asia.
5. I can focus on higher-margin products or increase volume, or both.
6. I can have a second company in the US to do imports, to lower tariff and move profits into the US.
7. By understanding how the tariff is collected, I will be able to avoid the tariff somehow. Maybe some mode of transport or shipping carrier will lag behind in having the tariffs implemented in reality.
Thoughts on my strategies? Even if not all of them will work, I feel it's good to have ideas ready, because otherwise you stagnate.
As I export low-margin goods wholesale to the US from the EU, to have a 20% tariff is not good. I have a higher gross margin than that, but not some fantastic margin.
I was relieved to see the 90 day pause, but aware that the 10% universal remains in place and it may become 20%.
Now that I have had time to think, I see several ways to deal with this, and I am no longer so negative.
In fact, I think despite the tariffs, I can grow my business and export more to the US. How is this possible?
1. My competition outside the US is also affected by tariffs.
2. I contacted my US customers if they are willing to pay the tariff or split it with me.
3. I can use customs brokers and certificates, like a US 'country of origin' to reduce the tariff-able part of shipment value, as some component of my products are in fact made in the US originally.
4. As the US has most of my customers I tend to spend most of my focus on it. This means I probably neglected to improve my sales to other countries where I already sell, like the UK and Asia.
5. I can focus on higher-margin products or increase volume, or both.
6. I can have a second company in the US to do imports, to lower tariff and move profits into the US.
7. By understanding how the tariff is collected, I will be able to avoid the tariff somehow. Maybe some mode of transport or shipping carrier will lag behind in having the tariffs implemented in reality.
Thoughts on my strategies? Even if not all of them will work, I feel it's good to have ideas ready, because otherwise you stagnate.
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