Tariffs

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zenako
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Re: Tariffs

Post by zenako » Sat May 18, 2019 8:19 am

Yup szabbran, we are on the same wavelength. My main point was that the magnitude of the impact was being overblown, not that there wouldn't be an impact. And if for example the final margin for DF after all non-dutiable costs are rolled in was something like 10% ( I really hope it is higher - given the risks presented by unsold inventory and the cost of money, etc), then taking 2/3 of that would hurt a lot. I know that many KS are scaled to hopefully break even and end up with a product line and molds for future product already built, helping to ensure healthy margins for future sales.

However, there is never a great pain-free time to get things like the overall trade situation squared up with China. I am convinced that while previous folks talked about doing something, they always knew there would be some sort of short term pain, and none of them wanted to deal with the political fallout from that pain, and thus we have gone decades with a bad situation.

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Re: Tariffs

Post by szabbran » Fri May 17, 2019 10:14 pm

And for the record, I think I'm agreeing with Zenako here. But while the immediate impacts may be sensationalized, I don't want to diminish the fact that this can have a serious impact on small businesses with low profit margins.

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Re: Tariffs

Post by szabbran » Fri May 17, 2019 9:58 pm

I don't want to be contentious here, and honestly I'd be happy to be proven wrong, but there is some misinformation in this thread. Profits (to American businesses) are not "undutiable". The 25% tariff inevitably comes out of the DF profit margin as they are manufacturing outside the US (factory profits would not have the duty imposed, but DF profits would). So, as you said, there are some costs (manufacturing, foreign warehousing, shipping) that are unaffected by the tariff, but these are sunk costs to DF. There is still a 25% tariff that impacts their profit margin on what is being declared coming in. They can choose to eat this cost (thus reducing their profit) or pass it on to their consumer (thus increasing retail prices).

It is absolutely true that the price increase in either case is not 25% of the retail value, BUT it is still impacting either DFs margins or their retail prices. This is a direct impact on us, the consumer, or DF, the producer, and these costs are not covered by the Chinese manufacturers.

The impact to us is not a 25% increase on retail prices, but it absolutely impacts either DFs bottom line or the cost to consumers, and that cost is not absorbed by a foreign entity unless DF chooses to produce domestically, which is clearly not feasible.

I'm not against an approach to bring our trade with China to a more beneficial situation, but let's not ignore the impact on small U.S. businesses. Again, I totally agree this is sensationalized and often misunderstood, but the impact to small businesses can be real.

zenako
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Re: Tariffs

Post by zenako » Fri May 17, 2019 9:45 pm

Thanks for finding that post. Basically supports what I was saying based on what I do know about production costs vs retail pricing for items like this.

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Re: Tariffs

Post by ced1106 » Fri May 17, 2019 8:54 pm

Agreed. This sort of "journalism" is entirely irresponsible. :x This was posted on r/boardgames. Obviously, most of you here reading this pay much more than $60 for your DF tiles but, assuming similar costs, most of you can afford a few bucks.

From Reddit: "I am a licensed Customs Broker in the US. I literally deal with these tariffs ALL day long. People sit here and complain that "Well a 25% price increase is going to kill businesses".

Here is some news for you to get a better perspective on this situation: So let's say a game publisher has a game with an MSRP of $60.00. The actual cost they declare to Customs is around $8-$11, on average. The rest of the cost goes to paying for things like ocean freight charges (which are non-dutiable and thus, the tariffs do not impact), and warehousing and trucking and profit and labor costs and other local charges, none of which are dutiable and thus the tariffs do not affect. That means, on a game that has an import cost of $8.00, the tariff adds $2 to the price of importation of that copy of the game. $2 to a $60 game is a total increase of 3.33%. That sort of cost can be absorbed with barely any notice to the consumer.

And if you think I making things up, these tariffs have been in place for virtually everything from China since September. How many things have you noticed huge cost hikes on? Anything that jumped 25%? Any small businesses that were thriving prior to Sep 4 that are now out of business? Most people here seem to think of this like a VAT, or a Value Added Tax, which is a flat tax added at the time of sales tax, which means you are taxed on all the freight and trucking and warehousing and whatever charges. That is not how tariffs work. So that $95 copy of Gloomhaven, were it imported from China after these tariffs, would (assuming the cost was fully passed on) cost about $98-100. Again, not a 25% cost increase. And the reality of this is that the additional tariffs they take in from China and a few other countries help offset the ridiculous runaway spending that Congress does so that it offsets some of the money we end up borrowing from China to pay for their nonsense."

https://www.reddit.com/r/boardgames/com ... d/enhgp0r/
https://www.reddit.com/r/boardgames/com ... 25_tariff/

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Re: Tariffs

Post by zenako » Wed May 15, 2019 5:40 pm

A couple of things to keep in mind. As far as I know and understand about tariffs is that they are based on the cost of goods. So what is the actual cost of those DF parts? That $2000 pledge obviously did not cost DF $2000, but in fact far far less than that amount, since many other costs are incurred in the production of those items. They are not importing any of the molds, or other sunken costs, like artist and developer time. I would be surprised if the actual cost DF is paying at the docks for those items from China that are being shipped here is much more than 25% of retail. That would, in turn, mean the actual dollar impact of a "25% Tariff" on the final price should only increase by a far smaller number. In my hypothetical case, 25% of $500 would be $125. Which would only make the final price increase by something like that, not 25% of the Retail price. In addition, there might already be some level of tariff already in place, like 6.25% that exists for some products and RAISING the tariff to 25% is then just an increase of 18.75% on the tariff.

Getting actual non-scare tactic news on this issue is a real challenge.

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NiandoBG
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Re: Tariffs

Post by NiandoBG » Wed May 15, 2019 5:37 pm

Hi folks,

Just some thoughts concerning the tariffs.

I hope that DF has calculated the tariffs already in their KS last year. There where enough? hints already last year that this (tariffs) will happen. And maybe the pricing of the CD reflects not only the higher costs for “complex” tiles but some expected tariffs as well. :?:
Otherwise it get very ugly for either DF or us as backers...

Concerning +25% or x% however it will be calculated. European customers pay already roughly 25% more than US customers today :cry: . I’m not sure if a lot of Europeans can pledge big sums if it goes up even more.

And finally I assume, that more customers will turn away from DF and Wizkids and will buy cheap stl files and will do more 3D printing.. :|

I hope that the negations will be successful and we just discuss about a footnote in the DF history.

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AnimeSensei
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Re: Tariffs

Post by AnimeSensei » Wed May 15, 2019 3:32 pm

Pizzabagel wrote:
Wed May 15, 2019 3:18 pm
I’d be willing to pay a little more for Dwarven Forge made in the USA.
Here's the issue:

In 2016 the average cost of a US manufacturing worker was $39.03 per hour
https://www.conference-board.org/ilcpro ... m?id=38269

In 2016 the average cost of a Chinese manufacturing worker was $4.99 per hour.
https://www.statista.com/statistics/744 ... am-mexico/

If they move production, it would likely be to India, Vietnam, etc. Another country close to China with lower wages.
102 Resin and 212 Dwarvenite Sets/Packs Owned

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Re: Tariffs

Post by Pizzabagel » Wed May 15, 2019 3:18 pm

I’d be willing to pay a little more for Dwarven Forge made in the USA.

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lerathel
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Re: Tariffs

Post by lerathel » Wed May 15, 2019 12:34 pm

All hope is not lost!
First, there are gaming companies in Us And Canada that do the production in house. so no tarif for those.
Second, The tariff is imposed on bulk price to the importer so lets say DF import 10 skid in US they will pay the 25% tariff on the bulk price/production cost not the retail price. it may cut the tariff in half or even reduce it to 1/3.
Still a raise in price but by 8 to 12 % insted of 25%.

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