URGENT: SEPTEMBER TARIFF IMPACT
Last week, the Trump administration announced that it had concluded its hearings and finalized tariffs affecting finished lighting products and lighting components for products to be assembled in the US. This creates a great deal of turmoil for our Industry as you await action taken by each and every Supplier, all of which affects your daily business. As this is a situation that continues to develop, we are taking a strong stance to support our dealers. Primarily, we decided against a general price increase in favor of sharing the cost of this new tax with you in the form of a reduced surcharge. Our intention is to minimize disruption to your business and the real cost of the tariff that would be further compounded to your customers under a price increase.
Here’s the hard truth: Percentage margins don’t mean anything if we sell less. There is a limited amount of money available for construction and we all have to recognize that project budgets are not likely to grow proportionally to the taxes imposed. So instead of protecting imaginary percentages, there is an opportunity for us to work together to keep the dollars needed to buy a light as reasonable as possible and sell more lights.
Beginning Tuesday, October 16th, there will be 2 prongs to our approach.
Our product prices will remain the same so that your product prices can remain the same.
Instead, we will co-op the tax and absorb as much as we can. While the aggregate impact of the additional 10% import tax is much more (around six-and-a-half percent), we will only pass on a 3.5% portion of the tax on affected products as a Surcharge clearly marked at the bottom of your invoices.
No gamey pricing, no irregular adjustment of price tags or salesperson confusion. Should a resolution be reached and the tariffs eliminated, we will simply remove the surcharge from the invoices and continue doing business as we always have. This avoids the greatest amount of hassle and makes calculating any pricing/quotes simple. We can still provide you with a price sheet in excel form with the 3.5% surcharge added should you choose to incorporate it into your pricing, however purchase orders made to us should be indicated at current pricing.
Our Smart Fans, Controls, Lightbulbs/Lamps, and Wires are NOT affected by the recent hike and will not incur a surcharge. To help you to conduct business as usual, we will also honor surcharge-free invoicing on all orders received prior to 10/16/2018, regardless of whether we presently have inventory. Hold-for-release orders will be subject to surcharge invoicing. Please use this as an opportunity to follow up with your customers on any open quotations or project estimates that you have out with your customers to avoid any unwelcome surprises.
For our customers in Canada, we have been actively putting in place a plan to get your money back for all qualified product crossing the border less third-party administration fees. Early next year, you can expect a rebate check from us for tariff surcharges incurred between now and the end of the year.
In these uncertain times, it is necessary as your partner for us to be as transparent with you as possible. It is hard to know for certain what will happen next year. Following January 1st, we will reevaluate our ability to sustain the tariff co-sharing alongside other labor cost and ancillary cost increases we are all facing. But for now, by sharing this burden, we want to clearly communicate that as always, we are in it together. And together we will weather this too.
The W Group Lighting Companies