Staying Ahead Of The Curve, The Tariff Curve That Is
So where are we? U.S. demands tariffs on Chinese goods, and now China is imposing tariffs on U.S. goods, got it. Well this could be both good and bad for our economy. On one hand, U.S. economy can see improved growth, by adding a new source of tariffs payable to the government that if really dug down deep, can be a huge eye-opening number of U.S. money lost in trade tariffs over the years.
How does this affect online sales?
Well if your business sells products through a third party or a dropshipping service, you may need to revisit every product you have listed for sale and find out what regions your sellers are from. Some online retailers are considering whether it makes sense to slightly raise the price on consumer goods or just carry fewer products. The main thing to keep in mind here is who your customers are, their loyalty and how much of a hit can you afford to take. Companies like Apple can afford to not raise the price on products despite tariffs for some time but this may affect them in the long run.
What products are being taxed by China?
Previously a 10% tariff had been added to all imported products and goods from China. The new 25% tariff will be added to products in the following industries: food, alcoholic beverages, auto parts, construction textiles, tech products like: smartwatches, TVs, microwaves, printers, others like oil and gas.
A number tariffs were already imposed on a number of products and consumer goods last year. According to the USTR, a new list of tariffed products are available, check out the full list.
So How Can You Stay Ahead Of The Curve As A Business Owner?
Well grab your team, spreadsheets, and inventory of products and take a detailed look of how your P&L will be affected. If you have high profits on a product for example such as kid toys, you may want to consider if your customers trust you enough to raise your price to reduce losses or at least find a middle ground to justify the new tax and retail price.
This also may be a great time to cut your losses (literally) with low selling products or products that may not have the longevity say as your "best-seller" or "popular" product. It may be worth it to audit your own inventory and see if you can remove some items and rearrange those funds to your digital marketing or online efforts to grow your business.
Also if you are collecting sales both online and from a physical storefront, you may need to reassess your profit margins for your physical storefront. After all, online merchant service fees as annoying as they can be, are far less costly than maintaining a storefront, rent, employees, cash-point systems and all the other associated costs with running a physical location. If your business can grow its brand online, you may want to take advantage of these new imposed tariffs and look at the bright side of how you can further along your business online. For help growing your brand, creating an online storefront, digital marketing, advertising and social media outreach, reach out today. Our experts stay in the know so you can prosper and grow.
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