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Thread: Chinese Tariffs and how they are affecting furniture

  1. #1
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    Default Chinese Tariffs and how they are affecting furniture

    The Chinese tariff policy is making pricing items very difficult for every store, and every manufacturer. I know I have slowed way down on the speed at which I can do quotes because I have to be more careful to not give out an incorrect price. Plus, I am asking customers to be more specific in what they are looking for, because (for example) a GR 2 leather is no longer a GR 2 leather. If that GR 2 leather comes from China is has a 7% surcharge on it (Hancock and Moore) vs a different GR 2 leather that comes out of Argentina.

    To make it more confusing, some leathers that originate from Italy are sent to China to be cut and sewn, so now they are subject to the tariff. HOWEVER, if the same leather is cut and sewn in the USA, its not. So it's a minefield on pricing correctly. The more specific you are in your requests for quotes, the more accurate it will be.

    To make matters worse, none of the companies are re-printing their price books. So one company will say "Add 7% just to the Chinese covers", another company will say "Add 4% to everything in our line, regardless of where it comes from", another will change all the grades of their covers (was a GR 22, now will be a GR 30). Still others will say "go to the web site for updates at your dealer portal". What used to take a couple of minutes to do price quotes can now take half an hour.

    And of course, a lot of stores will make mistakes and not see the surcharges until the order ships and its on their invoices. Can't really go back to the customer and say "oops, we forgot to add in the tariff surcharge, we have to charge you more on delivery". So it's a bit of a nightmare on the price quote end.

    I won't get into the politics of all this tariff business, but I for sure can tell you it has caused a lot of confusion and angst in the industry, and I hope it resolved soon so they all go away.
    Duane Collie
    Straight answers from thirty years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum
    I ask that you do NOT call my store with general furniture questions, that is what the forum is for

  2. #2
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    Default Re: Chinese Tariffs and how they are affecting furniture

    Here's something to share as well. I have someone interested in Piazza Ruby for two sofas, and that's a GR2 leather from China which carriers a 7% Tariff on it. I know Columbia Berry is very close to Piazza Ruby (and is a GR 1 leather from South America) with a very nice hand to the hide. My suggestion is to consider the Columbia and I send him these two side-by-side photos of the swatches - can you even see a difference? This will save him $ 1,758 on two sofas in this leather vs the Piazza (during the Sale Period which ends Sept 2).

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    A good dealer will help you work through the choices and know where your best bang for the buck is. Myself, I'd be buying the Columbia all day long over the Piazza and with that extra $ 1,758 go and get myself a new 65" Ultra HD Flat Panel TV !
    Duane Collie
    Straight answers from thirty years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum
    I ask that you do NOT call my store with general furniture questions, that is what the forum is for

  3. #3

    Default Re: Chinese Tariffs and how they are affecting furniture

    Quote Originally Posted by drcollie View Post
    Here's something to share as well. I have someone interested in Piazza Ruby for two sofas, and that's a GR2 leather from China which carriers a 7% Tariff on it. I know Columbia Berry is very close to Piazza Ruby (and is a GR 1 leather from South America) with a very nice hand to the hide. My suggestion is to consider the Columbia and I send him these two side-by-side photos of the swatches - can you even see a difference? This will save him $ 1,758 on two sofas in this leather vs the Piazza (during the Sale Period which ends Sept 2).
    I'm curious. Was the entire price difference due to the tariff, or was it because a GR1 leather is less money than a GR2 leather?

  4. #4
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    Default Re: Chinese Tariffs and how they are affecting furniture

    in Hancock & Moore, GR 1 is the base leather and GR 2 is appx 15% higher in price.

    Federal tariffs are actually 25% on leather from China, and that computes to 7% on the overall price of the goods if using a Chinese cover.
    Duane Collie
    Straight answers from thirty years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum
    I ask that you do NOT call my store with general furniture questions, that is what the forum is for

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