Learn to math.
In your example 72.5% of the higher amount is the same as 145% of the smaller amount (cbf actually mathing it, but you obviously don’t grasp the concept of maths very well).
Retailers will NOT be happy to make the same $100 profit, if they have to outlay 145% MORE cash to achieve it. Realistically, for many retailers, that extra 145% cash comes from an overdraft, and will have it’s own costs associated with it. No-one will use 2 1/2 times more cash to generate the same profit, and be happy with that.
Another way to look at it. In your example, $100 item from China generates 100% of cost price, to sell at $200. If that same item now costs $245 but sells at $345 only, then the cost price generated is more like 40% (shipping/handling costs are excluded, for simplicity). Most businesses would lose their bankers if they take such a hit.
At the border you pay tariffs on all the costs up to that point, because they are all considered to be part of the value of the shipment as it crosses the border. So the price of good, plus the price of packaging (as far as it was packaged in China), plus the price of the freight shipping are tariffed together, which makes the result of the calculation a little worse, but fundamentally you’re right.
I’m thinking more your staff, your shipping from your warehouse to your customers, your retail store and rent, etc.
Which all of course varies depending on the business you are. A small retail store would be affected much less by this than a much larger, more efficient operation that might not have retail locations at all.
There are also non finished goods, like car components. Components from other tariff regions and US labor costs won’t have that much, but there finished product will have a price hike
Less if anything.
You buy something from China for $100. Add packing, staff costs and delivery and you sell it retail for say $200. A nice healthy profit margin.
Now you add the 145%, so it costs $245 from China. None of the rest of it will cost you more. Still an extra $100, for $345 total.
The retail customer pays an extra (345/200=) 72.5% instead.
It’s a lot, but not 145%.
So if your retail price goes up by 145% or more, they either weren’t making a lot of profit before, or they’re greedy bastards.
Learn to math. In your example 72.5% of the higher amount is the same as 145% of the smaller amount (cbf actually mathing it, but you obviously don’t grasp the concept of maths very well). Retailers will NOT be happy to make the same $100 profit, if they have to outlay 145% MORE cash to achieve it. Realistically, for many retailers, that extra 145% cash comes from an overdraft, and will have it’s own costs associated with it. No-one will use 2 1/2 times more cash to generate the same profit, and be happy with that. Another way to look at it. In your example, $100 item from China generates 100% of cost price, to sell at $200. If that same item now costs $245 but sells at $345 only, then the cost price generated is more like 40% (shipping/handling costs are excluded, for simplicity). Most businesses would lose their bankers if they take such a hit.
At the border you pay tariffs on all the costs up to that point, because they are all considered to be part of the value of the shipment as it crosses the border. So the price of good, plus the price of packaging (as far as it was packaged in China), plus the price of the freight shipping are tariffed together, which makes the result of the calculation a little worse, but fundamentally you’re right.
It depends on if it is something like a powder that comes raw in a 200 lb jar and you package it yourself into small containers.
I’m thinking more your staff, your shipping from your warehouse to your customers, your retail store and rent, etc.
Which all of course varies depending on the business you are. A small retail store would be affected much less by this than a much larger, more efficient operation that might not have retail locations at all.
There are also non finished goods, like car components. Components from other tariff regions and US labor costs won’t have that much, but there finished product will have a price hike