5 years ago, Japan was suffering from deflation. Today they have inflation and the country is making different economic decisions.
It is likely that only part (perhaps the largest part) is due to tariffs. Also remember parts costs for out of production cars tend to increase in price as the cars age.
Huh? Have prices gone up or down? They’ve gone up. Will they go up further? For consumer goods, probably not, but it’s eating into our margins. What about other types of goods?
Part prices are contingent upon supply/demand, condition as well as inflation. If an older car is still popular, the parts won’t automatically go higher simply because it is out of production.
Based upon my experience, the converse is true more often than not - perhaps especially-so once the industrial tools, jigs, & dies are discarded (to save storage/maintenance costs, and/or to free up space for newer tools, jigs, and dies, in most instances of which I’m aware).
We’ve got our fingers in a lot of pies (not in the automotive marketplace, although we’ve long had maintenance/repair contacts in the process controller marketplace for those who produce parts & components for it), and I’ll make no bones about the fact that we’re quite “mercenary” in leveraging profit when we’re the best (or only) game in town.
There is somewhat of a ‘buffer’ now since so many of the ‘junkyards’ and auto recycling places are now on the internet and exchange parts from all over the country. They have a network that will do a search for your parts.
“Back in the day” when my father got tired of paying for replacement transmissions (in my defense, it was only the third time) I had to go to three or four ‘junkyards’ to find one for the 1953 Chevy I was driving. Apparently my mother (who was no longer driving at that point) never learned that it could lay rubber for almost 1/2 a block if it was revved up enough. I did…
Not only predictable but viewed as desirable by the proponents of tariffs as a motivator or increasing domestic manufacturing.
There is a fundamental difference in the interests of proponents and opponents of tariffs.
So far, other than some court actions and still to be resolved issues with some countries, none of the tangible results has been other than what is predictable.
The conflict is whose self-interest is being served. Not whether the tariffs are effective or not.
There have been a long list of commitments by companies to build or expand manufacturing facilities in the US.
Whether you or I might be skeptical of whether they will actually happen, they are more likely to happen than the number of deals OpenAI has announced for data centers and chip purchases.
There have been a long list of PR stunts to this effect yes. But name something and highlight their domestic infrastructure plans outside of Ai and how is that supposed to spur domestic production in almost everything?
The fab and energy requirement to do this don’t exist. Again domestic infrastructure plans: missing.
This highlights how one of the largest “donors” in that list is faring:
My state inspection is expiring this month on my 37 year old car and my 29 year old car. Both needed some work (just maintenance), that involved parts. Very cheap. American cars - (Mustang / Impala)
The subaru though… Same parts that were $600 in 2020 were over $1100 yesterday.
I wouldn’t call a 2015 out of production, especially since Subaru doesn’t change things very much. Their 2.5 Boxer (Naturally Aspirated / Turbo) has been used for decades, essentially unchanged.
This price hike I just experienced has a tariff component + ordinary inflation - call it 12.5%.
Not sure where the other 70% came from. Greed? The tariff is only 15%. Was 25%.
I could see a lot of these posts on this thread heading right for the
I don’t think they can move this thread as the drawer now costs 50% more, because fentanyl.. no wait… Russian oil… no wait, immigration… no wait, Taiwan… no wait, to distract from time with pedophiles… no, wait for foreign governments to buy my meme coin… Or whatever I call a “national security threat”.
This would be the supply demand component. Once factories see demand decrease, they stop producing focusing on more in demand products, the prices rise. Greed only has a component as much as all capitalism does where ‘greed is good’ - if the competition were selling your parts for cheaper, it would drive prices down - unless we track supply and demand for a particular sku that is very hard to pinpoint. Overall commodity prices are still higher than 2020 but I would imagine parts/components are additionally tied to commodity prices - so if all commodity prices have risen (metals) - so too shall prices. Again ball parking unless we look at specifics.
And there is probably a lot of the following going on …
Current item (on hand) cost $0.25 when bought and has been selling with a keystone market up to make $0.25 (so has been selling at $0.50). But the business knows the price to replace and have on hand will be some where around $1.00 (an estimate because of all the unknown variables). Therefore the new selling price of the item bought at $0.25 becomes $1.25 (instead of the original $0.50) so that the purchase of the new stock is covered and the $0.25 market up is still obtained.
We don’t think all of it is supply and demand right now. We think a lot is jockeying positions to stay in business as the variables change.
Inventory is all over the place for various supply chains as distributors and wholesalers are either full or empty depending on how the production cycle hit the tariff landing dates. We have products we will not see through distribution channels till January because all production halted when the announcement of 120% came out months ago. In the mean time all the on-hand inventory was gobbled up by retailers, and all the inventory that was inbound was sold or allocated before it even hit the shores. Now we get to wait and see what the tariffs will be like when our India competitors get TACO’ed, or if we go back to 100 with China, then TACO’ed in a few more months.
The only thing that is certain, is that ZERO of these goods are going to be made here, as Jack Welsh taught us decades ago, it will just move the next cheapest source of labor.
In the Amazon Seller arena, Sellers based in China have even more of an advantage right now, whether other Sellers are using Chinese suppliers or not (i.e., regardless of where other Sellers source their products or even whether their products are superior to those sourced from/manufactured in China). Even if the made-in-China product is inferior to similar products made/designed/manufactured elsewhere.
Remember: Handmakers, Sellers who customize, and Sellers (whether Handmade or not) who offer off-Amazon (or any sales channel) in-person services (like design and installation) in addition to e-commerce are only a very small number.
Perhaps your personal opportunity is in all of the services your specific business offers beyond selling a finished product on Amazon.
But even Sellers who don’t source products or supplies from China are seeing other costs increase while simultaneously struggling with their non-China based suppliers closing or scaling back what they offer at this time.
I can think of two Handmakers off the top of my head who recently posted that they are struggling with being able to find specific items from their non-Chinese suppliers, and even one whose primary non-Chinese supplier is shutting down, all due to non-Chinese based overall cost increases for those non-China-based suppliers.
Back in the bad old days of the Amazon Seller Forum, when arguments between scanner jockey booksellers and other booksellers were commonplace, it was common to point out that being called a bookseller conveyed little meaning in terms of what your business was.
The term, handmaker or handmade can be said to be suitably useless. Many online handmade sellers bear little resemblance in what they make, what materials they use, and how they run their business to artisans who sell through crafts galleries or in person shows.
In many cases the difference spans the entire process from materials suppliers to design to process to selling and to concerns for IP protection.
And although some sellers attempt to span multiple types of sales channels, most cannot succeed in more than one.
My daughter who sells at crafts shows has experienced new highs in sales, and no difficulty in finding supplies. Whether it lasts is not my place to speculate on. She has been able to move up in the class of show she sells at which clearly is part of the increase in sales.
She has also been selected for exhibitions in other types of retail venues with limited success. Like a one month show/sale of her work in a restaurant.
The tariffs spawn winner and losers, and many people are still not being affected. It is understandable that some feel the rug has been pulled out from under them, but that is always the case in times of change.
When a PC went from about $3K with a 25% margin to under $1k with an 8% margin, ccmputer resellers, large and small went under and mass merchants became the major sales channel.
Does anyone doubt that we are living in times of change?
Maybe, but that doesn’t make what Sellers on Amazon Handmade, Etsy, eBay, etc who call themselves “handmade” any less valid and is a mostly useless quibbling here.
In the private Amazon Handmade parts of SellersAskSellers, the struggle is real, the consequences are significant, and the problems are valid, for many in our SAS community who would indeed meet even the strictest definition of the term.