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| Sure, this could go in the basement baitbuilders forum, but I think everyone should get the heads-up.
I just talked to 2 of suppliers, and things are shocking to say the least.
Petroleum-based products, paint, clearcoat, adhesives...etc...up 15%-25% That's 40% in 2 years.
Wood...up 10%-15%
Ready for this? All components for bucktails and spinnerbaits. Anything made out of stainless or brass and even lead.....up 40%-50% across the board. The manufacturers actually sent out letters in Septemeber warning of the increase.
Manufacturers of petroleum-based products blame oil prices, that's understandable.
Wood prices are still being blamed on Katrina.
The war in Iraq is being blamed for metal prices going through the roof.
And delivery costs have gone up for suppliers, so it all trickles down.
If you build your own, you better order before the first of the year.
Everybody else, be prepared to dig a little deeper, and don't blame the guys making the lures.
You don't want to know what it costs for screw eyes x 1,000. They are expensive now, and are going up 50% January first. Even wire for bucktails and leaders is going up 50%.
No end in sight either. Once they start charging the higher price, it'll never come back down.
Beav
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Location: minocqua, wi. | i work in the global petrochemical market and what you are saying is absolutely true, but the petro market (natural gas derivitaves) that are the feedstock for plastics peaked globally about september of this year and there's been a softening that looks like it's just starting to roll back. if the winter is mild, the softening could pick up some momentum and pay back the consumer for next year. our projections suggest the worst is over and that things are starting to moderate finally. the past 3 years for plastic products has been unprecedented though and for sure supports what you are saying Beav.
i'm sure there are some healthy margins for the guys working the plastic bait market, but competition is the first thing that's going to bring prices more inline. a plastic bait costing $20 - $30.00 with a couple fish in it is a challenge to continue with, but until there is either an alternative or competitive pressure i guess we'll all keep paying for it. i guess i'd like to see some more accountability to quality in some of the baits we support. there is a way to "water-down" the materials and make them less durable which seems to be done at-will without much argument from the customer base.
i wouldn't get away with watering down my products like these guys have and still have the loyalty of customers like these companies have enjoyed. | |
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Location: The Sportsman, home, or out on the water | The price of steel has already jumped like 12% since July. It's gonna be interesting to see how my accounts take a price increase on their nails. | |
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Location: Oregon | I have noticed things going up for about 2 years now Beav....I keep a spreadsheet of all material costs. The cost of lumber has been the biggest change for me. I haven't wanted to pass the prices on to customers tho because musky lures are already pricey, mine included. Although material costs are certainly a factor, for me personally it's the time it takes to build the lure that I have to charge for. There just isn't a fast way to get through all the steps necessary to build a good musky lure.
I think as time goes on prices will come down as a result of more plastic lures and increased overseas production. We are already seeing some big overseas companies that formerly focused on bass fisherman starting to produce "musky sized" lures. We can't compete here in America with an hourly wage of 30 cents in China. There may come a time when basements builders will have to just build lures for friends or jump into the overseas production process like so many musky lure-builders in the USA are already doing.
jed v.
Bikini Bait Co.
Edited by RiverMan 11/18/2006 12:10 PM
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| This wasn't a heads up just for builders, but for buyers also.
The clearcoat that I use went from $35/gallon to $60 gallon in 2 seasons.
Primer/sealer is over $60/gallon.
I just got back from Reinke Brothers here in Milwaukee, and everything is going up. I bought screw eyes, split rings and hooks. Anything made out of metal is up and is going higher. When I add the price of the hardware, the clear coat, the primer and estimate paint usage. If I don't raise my prices, I'm working for a loss. It's only a hobby to begin with, but I'd at least like to break even. I guess when you work for free, you're a slave. When you work for a loss, it's charity. I give to the Church and Childrens Hospital, that's all the charity that I can afford.
My prices are going to go up. I have no choice. I have one credit card that I use for all of my lure making supplies, and I'm more than a few hundred short again this year, and that doesn't include time. The time that it takes to drill, weight, fill, sand and resand is free labor. Add the time to center and screw in 3 screw eyes per lure, then add the time to put on 3 split rings.......all of the steps that it takes to make, balance, paint, clearcoat and assemble a lure is hard to estimate. But think about the time that it takes when you add it up, and you are working for a Chinese wage. So why do it? Because of pictures like the "Rumblefish" and others that guys send to me.
Next time you look at a lure in your box, just think how long it took for that lure to be what it is. Mass produced plastic injected painted by machine lures are obviously going to be cheaper. Now stop at my house where I start with a piece of wood in my hand, put it in a jig and drill the needed holes, add the lead and then the epoxy, let that cure and then add filler, now try your best to sand it to look like there weren't any holes there to begin with. Add screw eyes, primer/sealer...twice, now you finally get to paint it...that's the fun part, but it takes a lot of time depending on how complex the pattern......let it hang for 24 hours, now start the clear coat process that takes 2 coats of a 2 part epoxy resin with 72 hours of cure time in between coats, then drill out the eyes without screwing up the paint job or the clear coat, add split rings and hooks, and there you are, the finished product. How many steps? How much time? At minimum wage, hand made wooden lures would cost a hundred bucks.
This sport is so much different than "fishing". The money invested is up there with golf, maybe more.
I guess that is why I don't feel so bad when I go walleye fishing and lose a crankbait to a wing-dam or a northern, but even crankbaits for walleye are going up to 6-7 bucks. Look at the increase just in Rapalas. I remember $1.99 Rapalas that are $6 now.
I bought my first Suicks for $7-8. My first bucktails were less than $5. Nothing is getting cheaper, including the price of getting to and from the lake and launching your boat that cost what a house did 50 years ago.
I'm beginning to question our sanity....again.
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| I agree with everything said here. I am sure that 95% of all wood baitmakers lose money. You need to invest a good deal to just get started and then if you break even after that than you are doing great. Plus with wood not every bait will run the same so you'll have some repeat customers and others won't because they got a dud. Just part of the biz. But people don't think twice about buying 10 reefhawgs in hopes of getting two that run well.
Then you say well look at Hughes River they sell baits for 40-50$ they must make money. He very well may come out ahead and is the best in the buisness but then you think about it more. Each bait has atleast 3-4 thick clear coats on which is very pricey plus the electricity to turn those baits for atleast around 12 hours per coat!! That is a ton of time when you break it down. Also where is he doing all this, you need to have a well ventilated shop desinged just for making baits. I woulnd't be surprised if the best maker in the business is making less than minimum wage. | |
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| Sorry, I meant every wood bait WONT run the same. | |
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| Plus he's got to sand inbetween each coat which is brutal. Ok i'm done thinking about it, its making me depressed. | |
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Location: Minnesota | RiverMan,
How did you guess my average wage/hour (30 cents) for making baits!?! lol
James
http://www.gruntmuskielures.com
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Location: The Yahara Chain | Sled aren't most of these cost increase do to the fact that China is using so many resources: oil, steel , concrete, wood, ect. We(the United States) are going to take a backseat to the Chinese in the not to distant future. China will be the dominant superpower in the next fifty years. China is modernizing at an incredible rate and they will replace the U.S.A. as the number one consumer in the world. | |
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| we whine and cry. but we drive the asian imports and there cheep knockoffs in the markets. they only substantial reason wooden bait makers havenot been deluged fom the orient is that musky fishing is only 18 per-cent of sportfishing. now as cost have gone up i see other fellow makers in the u.s. and canada, under the gun. 30 cents an hour can i work for you. i think when alls said and done its a way off life for the guys making baits. we buy screws buy the tens of thousands paints in gallons and thinners by the 5 gallon pails. 3 increases in paints. i believe 4 screw price increases. as wood its actually been fairly stable. the unfortunate thing we have to use chinese plastic eyes.. oh well enuff venting the only people that will hear me are fellow baitmakers.
ps. whoever started this thread is right on. prices will increase in 07 | |
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Location: The Sportsman, home, or out on the water | I'm happy that all I do anymore is paint. | |
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Location: minocqua, wi. | the China factor is a complicated one and one that isn't "going to happen" ... it already has. i don't see them as much as consumers as producers and it has and will continue to put pressure against the world for production cost and efficiency. it sounds hard to believe, but it is true that as westerners we have hobbies that require things we "want" vs. things we "need". there are many countries where hobbies just don't exist. it's family time just living or it's time to work and the third dimension isn't even understood.
it's a misnomer that it's "the cost of labor". the labor component of the Cost of Goods Sold is typically in the 6% area, so if you save 100% on labor you've only saved 6% and that's not the number that other factories lag by, it's much larger than that. i won't argue that labor isn't part of it, but it's unique in how it's applied. in China labor replaces capital investment in automation and expensive equipment. while our producing companies started automating to eliminate jobs to reduce high labor and healthcare costs of factories to remain competitive they opened the door for the Chinese. instead of the exhorbanant cost of equipment, the borrowing costs of buying it and it's impact on the bottom line, Chinese factories merely put numbers of people to the task of assembling by hand where U.S. and even European companies engineer automation. the effect is usually quality and reliability but even that is changing as the Chinese companies learn to understand the expectations of the consumers of their products. another major contributing factor of basically inviting the jobs to leave for Asia came with the "instant reward" that resulted in the dotcom era of Wall Street. now, if your money invested in stock with companies that grew over the long haul you were losing against the indexes that were buying the "vegas-style" stocks that provided the instant gratification of the investors and fed the "expectations" of the "new wallstreet". then the bubble bursts and reality sinks in, but not before we all wake up and wonder why no companies invested in equipment and factories for 10 years? ... they had to stay competitive while they lost capital funding from Wall Street, so they went overseas or went away. the other big component is the currency. the Chinese Yuan is weak against the dollar and there is a lot of pressure to increase it's value which will be a direct effect on the cost of goods coming in.
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Location: Rhinelander, Wisconsin | Big Picture! Great job explaining a very complicated issue, Sled.
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Location: Oregon | That is interesting Jonny and I guess for many products we use here in the USA the 6% number makes sense since as you have said so many things are automated. But for a basement builder using saws, drills, and sandpaper, "automated" is hardly part of the equation and 6% is not even close. On a $30 dollar lure for me about 10% of the cost I charge customers is for materials....sometimes a bit higher than that. Another 10% is for taxes, and the remaining 80% is to cover my time.
Now if it were possible to buy a machine that I could drop wood, glue, paint, and screws into and it would spit out musky lures fast enough, then yes I might be able to keep my labor costs at about 6%. Sadly no such machine exists and minimum wage here in my state of Oregon is 7.50 per hour. To put that in perspective, for 7.50 an hour here I could hire one person. In China, I could hire 25 people for the same 7.50 cents an hour (assuming equal dollar value). There's a reason why virtually all the big builders have their baits made overseas and why Wal-Mart, the largest retailer in the World is largely supplied with goods "made in China".
jed v.
Edited by RiverMan 11/18/2006 10:47 PM
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| To add one thing. You can thank those who desire to "even out" the world for these things going on. The goal of world wide equality (socialism) is well on its way to achievement, with American jobs being lost, the dollar continuing to lose its value (which causes inflation), and the support of the Communist countries through corporations going there. This will ultimately lead to the elimination of the middle class, the collapse of the U.S. dollar (fiat currency with no value), and more and more gov't intervention into our lives to become the "savior" of all of our problems. | |
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Location: minocqua, wi. | the economy is and has been a global one going back to our country's origin and trading amongst countries has been one that has "valued" currencies from pelts to now greenbacks, yuan, yen etc... so this isn't anything new. the "world" is a competitive one and global population increases make the pressure more visible and the competition fierce. what is a bit "new" is the strength of the rest of the world vs. the dollar and the "world" currency seems to have shifted from the usd to the euro. i'm not sure there's a worldwide conspiracy against democracy in-fact i think it's the opposite. unfortunately a "model" of democracy might be Palastine .... be careful when you install an elected government and they "choose" to elect Hamas.
we have become a nation of "want" and consequentially our government and our people want things sometimes without regard for how to "pay" for things and so we support with credit what we need without any "regulation" ... so government, companies and individuals are allowed to bankrupt themselves through bad decisions to feed the "entitled want" and go default on the loans supporting the ride and then either carry a deficit, file Chapter 11 with governmental support of the credit owed or maybe in our welfare system so that we (the rest of us) can provide the income to pay for the debt loaded up by our brothers ... insurance, healthcare, social security ... the line gets pretty long. tell me how that isn't and hasn't been "socialism" for a long, long time. there are tarifs that all importers pay ... it's a "field leveler". i often wonder where all of that money goes because it doesn't seem to find it's way to the consumer.
anyway, doesn't it aggrevate you that "capable" people who aren't willing to work to paint your baits and build your business are provided for by you and me through welfare? so where is "socialism" ... it's alive and well here too, unfortunately our form of it pays people to do nothing and elsewhere those choices just don't exist. the custom musky bait business has a pretty small market in relative terms too, so the expectations of it's efficiency and ability to provide a profit might be a bad call on the front end.
i remember a strong statement i got from an owner of a business once ... he said "i don't pay you for your lifestyle, i pay you for what you do" ...
there are always two ways to figure out what to do when things change against you 1) complain about it or 2) try to understand it and then do something about it. there are a couple of things that we provide better than anyone else in the world and the things we are most envied for .... 1) natural resources and 2) ideas and ingenuity. what-if you were to take your ideas, develop them and then have them produced and be able to sell them to a world market. you could be the boss of your own program and sell your products and services to a larger market. i see more opportunity in the globalization paradigm than sadness i guess.
a good question might be, what should a government do when a very large part of it's population don't want to do anything? ... education, work, etc...? i say eliminate the minimum wage, reduce welfare for required work and get back to making things.
we're coming to a season where people feel obligated to "spend" and it's a huge measure of the strength of our economy. so spending numbers are on the watch (not how it's funded) and the measure of what gets spent on things that aren't "needed" find their way to the back of the closet or the garbage can in a month. i don't get it! | |
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| Not to get into a political discussion, but the last thing any country should want is democracy. The United States were not founded as democracies and it is totally incorrect to refer to them as such. As far as the currency and inflation issues go, reference to "The Creature from Jekyll Island" by G. Edward Griffin will open anyone's eyes who is interested in the truth concerning the Fed and the whole banking system. Warning: You didn't learn such information in college. | |
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| I gotta say this about profiblity,uncle sam, welfare, economy etc. I'm a pharmacist, last night I filled an rx that cost us 206.30, it was a medicaid patient, the state reimbursed us 208.50. We made 2.20 $ on a 200$ rx. The Kicker ---The lady says in passing "I don't really need that one anyway". Everyone seems to be thrilled with Walmart's decesion to sell generic rx's for 4 bucks. Well "everyone" better be hope ol' Wally is close by, thats where you may be driving to to get an rx filled. I've never been anti-walmart but I feel they are putting that out there as a loss leader , with no profit, to get people to buy the other stuff they sell. They will make their money on the junk and put lot's of independent pharmacies out of business. Medicare part D (rx's for seniors,disabled) will bankrupt our country in it's current form but thats a whole diff discussion. Thanks for letting me vent ----good idea about getting rid of the min wage --, glad I already own 2 of everything  MD | |
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| all political discussions aside...
in the world of "basement" muskie baits, it seems to me (from an outside, non-builder perspective) that if people are truly making lures as a hobby, then it wouldn't upset them quite so much to have to charge higher prices for their products. raise the prices to cover your higher costs and continue enjoying your hobby. i spend lots of money and time on my hobbies too!
however, i suspect that what's so upsetting to some is that they are trying to sell lures to make money as a business. if you're trying to sell a lot of lures, and make some money, then i can understand it upsetting you. higher prices might mean fewer sales and lower profits.
if that's the case, it's time to ask yourself whether or not getting paid a very low wage/hour is worthwhile to you. if it's not, then stop doing it! if it is, keep going. just don't ask me (the consumer) to feel particularly bad for you about it - it's your choice.
capitalism is vicious and brutal: compete or die basically. many many people in the business realm make that decision every day. if they're not competitive they have to either find a way to be competitive or they find some other way to make money.
obviously, small builders will never be able to compete on cost will mass-production outfits. they have to offer something else in it's place, and i believe quality is the answer. focus on quality in the product and in customer service and people will be willing to pay higher prices for your stuff. i know i'm willing to do so.
my saying this may not be "nice" or what some of you want to hear, but it's the truth...
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Location: lansing, il | as one who is breaking out of the hobbyist basement product maker into the bigger picture, everytime you turn around you get it stuck to ya in one way shape or form...guess what i dont like it but i either, but learn to adapt and deal with it, or get out..one nice thing is having a product that is head and shoulders above the rest so that people will still want it! as far as the rest of the theorys, well all you union guys can jump on me all ya want but unions will eventually force more and more big companies to continue to outsource...at least thats the way i see it...i watch it everyday in the auto industry i watch a guy get paid 25 bucks to put in a bad light bulb...or i see a guy get paid .25 hour of labor to do 2 minutes worth of work, or a hour worth of work to do a 15 minute job...and then have the nerve to comlain about it!!!working 40 hours but booking 80 hours of work...or griping because he worked all week (40 hrs) but only booked 50 instead of his normal 80....diagnostic fees which consist of plugging in a computor and reading what the computor says is wrong with the car cost the comsumer 100.00 gee i wonder why companies constantly look for ways to adapt!
Edited by muskihntr 11/19/2006 9:47 AM
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Location: Oregon | Some great discussion here, way off subject for the most part but interesting nonetheless.
Jonny I like the way you write, it's entertaining.
Lambeau, you hit the nail on the head for me. I have a full-time day job and build baits in my spare time. Do I make money on lures? Yes I do, enough to pay my boat payment each month which is my goal for right now. I don't make much per hour, probably minimum wage, maybe less, but I am at home with my family, it provides some additional income, and most importantly, I enjoy it.
jed v.
Edited by RiverMan 11/19/2006 12:01 PM
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Location: minocqua, wi. | i'll second the hitting of the nail on the head .... good form lambeau
there are some sharp minds on this site and i like seeing some of these debates .... ok, i love it! i had thought about this site and some of the themes that have been shared while i was driving today. i really didn't have any epiphanies from the dashboard time, but i did think about the computer, the internet and the access to markets and the variety of paradigms that it is viewed by. my thought is that in the U.S. it has fed the "consumerism" and continued high-interest debt problem for a lot of people who already have control problems when they are at a store shopping. now if they can't afford the gas to go to the mall, they can sit in the chair with the pc in their lap and shop with their credit card, pay their pc payment online and build an even bigger problem. my friends in China and Thailand talk about how cool it is that they can connect with people around the world so that they can sell more products, connect with more people who might want to access their services so that they can make more money. same "flattening" device, different paradigm of what to do with it. i always love the common question once an asian person finds out that i'm from the U.S.. "why do you buy so many things? ... where do you put all of it? ... you must have a lot of time and money to do such things"
consumers and consumerism drives markets. in the bait business it seems that volume is king, so quality doesn't rate highest ... it's "how many" not "how good" that drive purchases from what i've gleaned. can fewer higher quality baits, rods, reels etc... be as effective as filling as many lakewoods and garage walls as you can or having 5 things instead of one or two "good" ones? .... and that's i guess why i hit some of the chronically failing products, their makers and the products that wouldn't stand a chance to get my money. i've worked for companies in high levels that manage in very similar manners and have become jaded to their marketing style of "let's sell them what we make, drive volume and price instead of making what they want ... with quality. | |
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Location: Burton, Ohio | This thread is very interesting.
It is funny how our society has turned into what it has. I mean by the "instant" gratification thing. Everything has to be done faster and faster. Follow this up with lowering the costs of production or at least maintaining them. Hear in Cleveland we have been hit hard in the steel industry with the loss of jobs and now closing auto plants. So many companies are heading out overseas. I live in a suburb of Cleveland out on the edge of the amish. They just put a Walmart in about 10 months here. Small business are closing up like after the county fair.
We are in the process of adopting a girl from China. We will have to travel there for 2 weeks to get the child. I hate the fact that so many american jobs are being lost to this country but the girls are discarded by the hundreds everyday. The families are only allowed 1 child per household. The boys are preferred because they become the caretakers of the families in later life. The girls get put in an orphanage and when they come to age are placed into the work force.
The baitmaking, I am just starting to make baits and getting more and more depressed when I look at the musky lure catalogs. I can't believe how little the prices are on these quality baits. I think how many you have to build to turn a profit and it depresses me. The other thought being as mentioned earlier. If you build a high quality bait you may loose a share of people but you gain on the higher end with less baits but more money. A friend had mentioned with his bussiness he had to make a decision to raise the price and lose customers. He wound up raising his prices for goods by 10% and lost about 5% of his customers. Came out a little ahead I quess. As river man said Its what you want out of it. I'm just looking to make a boat payment. I give the people alot of credit that chase it full time. So many people that are out there that are looking to jump on someone elses shirt tails and ideas instead of coming up with thier own. Been doing this for only a couple of months but learning fast about the beast. He can chew you up and spit you out in a heartbeat! It just seems that the prices never go down but slowly creep up and up. | |
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| Tigger --Hats off for adopting the little girl --I don't know you but I'm proud of you !!!! Ever come down to Cave run you are welcome in my boat anytime. I'm on the Ky side of the Ohio river about 4 hours South of you. Hope your adoption works out great MD | |
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Location: minocqua, wi. | remember that the 1-child law that started in 1978 came after the "great leap forward" and the "cultural revolution" era of Mau. from the mid 60's to the mid 70's 30 million Chinese lost their lives, more than were killed by the WWII Nazi era. the reform party had a situation after the liberation that was unprecedented and they had a population problem that was so fundamental with people who knew only survival. the country varies so greatly from province to province based on local economy, but the 1-child law has been changed recently due to projections of population "problems" projected by it's impact. now if an only child marries and only child, they are allowed 2, but in so many cases the younger generation has chosen to limit themselves to a single child so that they can both work and continue to gain the better life that it provides ... this is the case mostly in the larger cities in the east which is certainly not a reflection on some of the poorer areas of the west. i've gotten to know many people there who are from some of the poorer areas of the western provinces and north to Mongolia. these young people will leave their families for years at a time sending their money home to their families and then return.
my colleague in Shanghai was a young boy during the cultural revolution when the country was "hidden" behind the veil of Mau. the realities of that country may never be completely known due to the deceit of the hard-line communists that ruled during that time and still to this day many who lived through it don't speak of the details. it's a situation that i think is impossible to understand fully unless you lived through it.
if the 1-child law is broken, it is a cost impact of taxation that comes to the families .... here we pay more government welfare for additional children born into poverty and it's an income generating program for the mothers. in China the poverty line is taxed higher with more responsibility and the option of adoption is often taken by the parents as an out for the children and a relief for them from the added expense. it's probably a good argument either way but what becomes of the children born in poverty in the ghettos of los angeles, chicago or on the delta in mississippi and arkansas?
if you like a good read on the subject grab the book "Life and Death in Shanghai" ... it's awesome and a real depiction of one person's struggle during that era and a great and very real picture of the culture and people of China. | |
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| impoverished in canada. we pay tax on top of taxes. i have seen many baitmakers go directly to china for labor and products to be built. we can thank our countries leaders for borrowing monies from offshore. thats why we are in this fix. seems theres no new bastiens to be conquered for asia.free trade between the u.s. and canada was a good thing but as the world went global trade we are the losers. wall street has their heyday and futures look bleak for north america. our own goverments have introduced the dis-mantelling of our manufacturing industries.. its really weird to get looks when i tell people i only buy products built in north america.. whem i ordered a new truck i was told it may be built in mexico. i told him if its not u.s. built i would not take it. living in canada, i am a firm believer in u.s. or canadian built. i want quality | |
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Location: Hastings, mn, 55033 | as someone just getting into the bait making thing, i could be off, but i dont see how in the world anyone has $25+ into materials for a lure, $25 being on the low end of what hand made lures sell for. i use most of the same techniques that the rest are using as far as construction and assembly. about the only thing different would be i dont use screw eyes but use thru wire with paper clip type hangers, all of which must be made to size, so cost may be a little cheaper but more time consuming. i also use glass eyes which is costlier than plastic stick on eyes. taxes included i wont have over $15 into a lure, so again i dont see how others can have such high material costs.
for those that truly do, maybe its time to ask yourself why. are you having a third party make your wood bodies, and if so could you save cost by doing it yourself? are you using paint thats over the top on cost and is it truly worth the added cost in terms of sales and most importantly in fish caught on the baits? are you using components that are way over the top in terms of strength etc and also more costly.
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| Where's Mikie!?!?!?!  | |
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Location: minocqua, wi. | an interesting note i learned on my october trip to China. the "Wealthiest Person in China" is a woman. she has built an empire worthy of noteable world wealth ... her business? ... she buys scrap paper from the U.S. and sends container loads (50,000 per month!) to China to be recycled into paper products. .... one country's waste has become the richest business in the most productive country in the world.
now that's something to chew on. folks nobody's doing anything "to" us ... we're good enough at it on our own! | |
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Location: Burton, Ohio | Johnnysled, The same with scrap steel in the USA. China buys our scrap steel, pays to have it sent to them, reworks it and sells it back to us cheaper than we can make here in the states. Unbelievable to me.
A side note. Today a friend from work was at a big woodworking sale on saturday. I had mentioned to him that if he sees a good sale on a router bit set to buy it for me. Today he came in and handed me this 24 pc carbide router bit set. The first thing I thought to myself was oh my gosh this had to be about 89 bucks or more. I then asked him how much I owe him, he stated "29 dollars" I was shocked! I looked at the made in China tag and was puzzled. A good carbide bit goes for about 25 bucks apiece. There were 24 of them. Most of them had bearings on them also. They came in a nice case to boot. How is this possible? | |
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Posts: 13688
Location: minocqua, wi. | tariff's and shipping are HUGE ... here's my guess at how they are playing the game. they inflate the value of the goods as used and obtain invoices that reflect a "cost" ... export shipments are about 50% less than imports because they need so many containers returned so they have a huge discount in outbound ocean freight. the chinese government subsidizes the program with capital funding on their side and the product is converted under the structure i stated previously with all the "typical" advantages. the kicker on this is when it's shipped back to the U.S. the factory receives it's export credit of 10% (down from what was 12% prior to a couple months ago) allowing them to basically operate at cost ... when they ship to the U.S. the export invoice is reduced by the value of the import materials component used to make the product and the tariff is applied only to the balance.
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Posts: 17
Location: Puyallup, WA | I guess someone didn't like my comment so they pulled my post???
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Get ready for price increases across the board