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thatsGSki industry starting to comment on tariffs.
What are the materials "only" available via imports?
Also cheap pivots from Canada still cheaper than USA shops
We make all our skis here. But even our US-made materials are going to be effected because many use raw materials sourced overseas.
In really rough terms:
- All edges are from Europe. We have already been told our pricing will increase in June.
- All topsheets are from Europe. We have already been told our pricing will increase in July.
- We source our base/sidewalls/tipspacer out of Ohio. I am sure there are raw components going into them that are from overseas. So those pricing will go up.
- Our epoxy is made in Oregon. I am sure there are raw components going into it from overseas. So those pricing will go up.
- Our composites are made in Alabama. I am sure there are raw components going into it from overseas. So those pricing will go up.
- All VDS is from Europe. So expect the same there.
- We get bamboo from China (the only place we can source) and already had a 25% tariff put in place by Trump in 2018 (never removed by Biden). That is now 35%. I believe it is going to go to 45%.
Then get to the consumable. Pick one. None are made here. We use something like 10,000 gloves per year. Made overseas. Repeat that with all sorts of things and this gets fucked pretty quick.
This is on top of the price increases that we all went through during covid.
Some top line changes from that. Here are just a sample of a few material price increases over time from then.
- Between August 2019 and April 2022, tipspacer increased 106%.
- Between Jan 2020 and Sept 2024, epoxy increased 81%.
- Between March 2021 and Dec 2023, our fiberglass/carbon composite increased 56%.
Repeat that on basically everything for every business. Not going to end well.
iggyskierWe make all our skis here. But even our US-made materials are going to be effected because many use raw materials sourced overseas.
In really rough terms:
- All edges are from Europe. We have already been told our pricing will increase in June.
- All topsheets are from Europe. We have already been told our pricing will increase in July.
- We source our base/sidewalls/tipspacer out of Ohio. I am sure there are raw components going into them that are from overseas. So those pricing will go up.
- Our epoxy is made in Oregon. I am sure there are raw components going into it from overseas. So those pricing will go up.
- Our composites are made in Alabama. I am sure there are raw components going into it from overseas. So those pricing will go up.
- All VDS is from Europe. So expect the same there.
- We get bamboo from China (the only place we can source) and already had a 25% tariff put in place by Trump in 2018 (never removed by Biden). That is now 35%. I believe it is going to go to 45%.
Then get to the consumable. Pick one. None are made here. We use something like 10,000 gloves per year. Made overseas. Repeat that with all sorts of things and this gets fucked pretty quick.
This is on top of the price increases that we all went through during covid.
Some top line changes from that. Here are just a sample of a few material price increases over time from then.
- Between August 2019 and April 2022, tipspacer increased 106%.
- Between Jan 2020 and Sept 2024, epoxy increased 81%.
- Between March 2021 and Dec 2023, our fiberglass/carbon composite increased 56%.
Repeat that on basically everything for every business. Not going to end well.
Great insight. Thanks for sharing.
One of my closest friends is a well-known surfboard shaper (makes all his boards by hand) and he's getting hit hard too.
This is really good for a handful of people and fucked for everyone else.
iggyskier- We get bamboo from China (the only place we can source) and already had a 25% tariff put in place by Trump in 2018 (never removed by Biden). That is now 35%. I believe it is going to go to 45%.
idealistically, tariffs are supposed to encourage domestic production. But bamboo is a ubiquitous with China, WHO TF GROWS BAMBOO OUTSIDE OF CHINA, it's a very small industry, but surely the government aren't that fucking braindead to not put an exception on bloody bamboo
IT'S FUCKING BAMBOO OF COURSE IT'S FROM CHINA YOU STUPID CUNTS
bamboo, man, come on
iggyskierWe make all our skis here. But even our US-made materials are going to be effected because many use raw materials sourced overseas.
In really rough terms:
- All edges are from Europe. We have already been told our pricing will increase in June.
- All topsheets are from Europe. We have already been told our pricing will increase in July.
- We source our base/sidewalls/tipspacer out of Ohio. I am sure there are raw components going into them that are from overseas. So those pricing will go up.
- Our epoxy is made in Oregon. I am sure there are raw components going into it from overseas. So those pricing will go up.
- Our composites are made in Alabama. I am sure there are raw components going into it from overseas. So those pricing will go up.
- All VDS is from Europe. So expect the same there.
- We get bamboo from China (the only place we can source) and already had a 25% tariff put in place by Trump in 2018 (never removed by Biden). That is now 35%. I believe it is going to go to 45%.
Then get to the consumable. Pick one. None are made here. We use something like 10,000 gloves per year. Made overseas. Repeat that with all sorts of things and this gets fucked pretty quick.
This is on top of the price increases that we all went through during covid.
Some top line changes from that. Here are just a sample of a few material price increases over time from then.
- Between August 2019 and April 2022, tipspacer increased 106%.
- Between Jan 2020 and Sept 2024, epoxy increased 81%.
- Between March 2021 and Dec 2023, our fiberglass/carbon composite increased 56%.
Repeat that on basically everything for every business. Not going to end well.
thanks for sharing.
On an optimistic note, IF the full plan of increased tariffs + reduced corporate income tax goes from 21% to 15%, you might still end up having a higher profit margin. Bonus of possible reduced regulations and new equipment deductions. This is a rough estimate and I don't really have full insight on current ski costs and other factors going into the business.
If anyone wants to look themselves, this is just a Claude analysis of increasing costs by 25% and reducing corp income based on what Trump has proposed.
_______________________________________
Current Scenario (Original costs, 21% tax rate)
100% Markup:
$200 skis: Selling price $400, net profit $158 (39.5% margin)
$300 skis: Selling price $600, net profit $237 (39.5% margin)
$400 skis: Selling price $800, net profit $316 (39.5% margin)
200% Markup:
$200 skis: Selling price $600, net profit $316 (52.7% margin)
$300 skis: Selling price $900, net profit $474 (52.7% margin)
$400 skis: Selling price $1,200, net profit $632 (52.7% margin)
New Scenario (25% increased costs, 15% tax rate)
100% Markup:
Key Findings
Despite the 25% increase in costs, all scenarios show a 34.5% increase in net profit due to the lower tax rate (15% vs 21%). The profit margin percentage also improves in all cases.
This indicates that the tax reduction more than compensates for the increased manufacturing costs, resulting in substantially higher profitability across all price points and markup scenarios.
______________________________________
**This post was edited on Mar 6th 2025 at 9:57:50am
On an optimistic note, IF the full plan of increased tariffs + reduced corporate income tax goes from 21% to 15%, you might still end up having a higher profit margin. Bonus of possible reduced regulations and new equipment deductions. This is a rough estimate and I don't really have full insight on current ski costs and other factors going into the business.
If anyone wants to look themselves, this is just a Claude analysis of increasing costs by 25% and reducing corp income based on what Trump has proposed.
_______________________________________
Current Scenario (Original costs, 21% tax rate)
100% Markup:
$200 skis: Selling price $400, net profit $158 (39.5% margin)
$300 skis: Selling price $600, net profit $237 (39.5% margin)
$400 skis: Selling price $800, net profit $316 (39.5% margin)
200% Markup:
$200 skis: Selling price $600, net profit $316 (52.7% margin)
$300 skis: Selling price $900, net profit $474 (52.7% margin)
$400 skis: Selling price $1,200, net profit $632 (52.7% margin)
New Scenario (25% increased costs, 15% tax rate)
100% Markup:
Key Findings
Despite the 25% increase in costs, all scenarios show a 34.5% increase in net profit due to the lower tax rate (15% vs 21%). The profit margin percentage also improves in all cases.
This indicates that the tax reduction more than compensates for the increased manufacturing costs, resulting in substantially higher profitability across all price points and markup scenarios.
______________________________________
**This post was edited on Mar 6th 2025 at 9:57:50am
^^ in this example the consumer does end up footing some of the cost increase (25% blanket increase on everything was kinda excessive). If you don't want to increase costs for consumer, these would be the breakevens. 7-14% cost increase does seem fair given labor and other factors from manufacturing process isn't directly effected from tariffs
100% Markup Products:
Manufacturing costs can increase by 7.06% without affecting net profits
At your proposed 25% cost increase, profits would decrease by 19.30%
200% Markup Products:
Manufacturing costs can increase by 14.12% without affecting net profits
At your proposed 25% cost increase, profits would decrease by 5.85%
thatsGOn an optimistic note, IF the full plan of increased tariffs + reduced corporate income tax goes from 21% to 15%, you might still end up having a higher profit margin.
The reality is that the trade war is here, now. China's retaliatory policy will go into effect on the 10th -- I believe.
No-one knows what the fuck is going to happen day-to-day with the Trump/Elon administration. None of this was ever rolled out as a cohesive plan. Until we see some actual traction on this, instead of just words, it seems like an empty promise.
Your Claude analysis also fails to account for the privatization of government services which will in turn costs businesses, especially smaller ones, more money (healthcare, utilities, transportation, etc).
The biggest negative on this is the uncertainty. Just look at $VIX. How are businesses supposed to plan for anything when tomorrow Trump could turn around and do something radically different.
March 3 – Speaking at the White House, Trump reiterated plans to move forward with a fresh round of tariffs the following day. Within minutes, the stock market tumbled. The S&P 500 closed down 1.7%, its worst trading day since December.
March 4 – Tariffs on goods from Canada, Mexico and China took effect at 12:01 a.m. ET. A near-instant trade war broke out. China and Canada each responded with retaliatory tariffs, vowing additional measures. Mexican President Claudia Sheinbaum slammed Trump's tariffs but said she would hold off on retaliatory measures until after a conversation with him. U.S. stocks extended their losses from the previous day.
March 5 – Trump ordered a one-month delay of auto tariffs after a request from the "Big 3" U.S. automakers: Ford, General Motors and Stellantis, the parent company of Jeep and Chrysler. The reprieve triggered a stock market surge, resulting in gains for each of the major indexes by the end of the trading day.
March 6 – Trump signed executive orders temporarily pausing tariffs on Canadian and Mexican goods compliant with the United States-Mexico-Canada Agreement, or USMCA, a free trade agreement. Despite the easing of tariffs, U.S. stocks resumed their previous plunge. The S&P 500 dropped about 2%, while the tech-heavy Nasdaq fell 2.5%
This seems like a coherent and thought out strategy /s
thatsGactual cost of wood likely small % of cost of ski*
*source idk but probably
But ya gotta add it all up. Look at one of the above posts, steel from Europe (I'm sure some brands is from Canada), topsheets from Europe, aluminum etc. The majority of raw materials for skis are imported even if the ski is "Made in Canada/US"
JuviticusBut ya gotta add it all up. Look at one of the above posts, steel from Europe (I'm sure some brands is from Canada), topsheets from Europe, aluminum etc. The majority of raw materials for skis are imported even if the ski is "Made in Canada/US"
Labor, storage, marketing, design, shipping, sponsors... gotta assume that is bulk of overhead on these companies.
Just saying even at 25% increase in cost of materials doesn't mean 25% increase in retail cost.
thatsGJust saying even at 25% increase in cost of materials doesn't mean 25% increase in retail cost.
Based on the assumption that some lunatic in DC, that can't stay cogent day-to-day with his fiscal and economic policies, is going to follow through on business tax cuts.
thatsGJust saying even at 25% increase in cost of materials doesn't mean 25% increase in retail cost.
And for the sake of accuracy, the interplay between
1) Trump's,
2) Canada's [25% tariffs affecting steel, aluminum, and other goods that went into effect today],
3) EU's tariffs [two-part: first, April 1st, and the second part at some later date]
is kind of far beyond where we were at when this thread started.
Things will probably only escalate further until reaching a resolution so good luck to small businesses out there. But do not cry, Donnie promised tax cuts at some point.
abjectwoeAnd for the sake of accuracy, the interplay between
1) Trump's,
2) Canada's [25% tariffs affecting steel, aluminum, and other goods that went into effect today],
3) EU's tariffs [two-part: first, April 1st, and the second part at some later date]
is kind of far beyond where we were at when this thread started.
Things will probably only escalate further until reaching a resolution so good luck to small businesses out there. But do not cry, Donnie promised tax cuts at some point.
Without tax cuts, a 25% increase in cost of materials doesn't mean 25% increase in retail cost. tbh it feels like a good way to raise prices at higher margin and not be looked at as the bad guy.
Also the tax cuts and jobs act from 2017 expires at eoy, we're going to get a new proposal and new tax plan in that time, which will likely pass, or the existing one gets extended.
Orange man was elected and we knew he wanted manufacturing jobs back in the states and was going to do this through tariffs. So either wait it out, or adapt.
thatsGWithout tax cuts, a 25% increase in cost of materials doesn't mean 25% increase in retail cost. tbh it feels like a good way to raise prices at higher margin and not be looked at as the bad guy.
Also the tax cuts and jobs act from 2017 expires at eoy, we're going to get a new proposal and new tax plan in that time, which will likely pass, or the existing one gets extended.
Orange man was elected and we knew he wanted manufacturing jobs back in the states and was going to do this through tariffs. So either wait it out, or adapt.
Wait it out, or adapt yes but you forget the 3rd option, going out of business. Tbh I doubt any major brand will actually be worried about going out of business, it's the small brands we love on this site that I'd get concerned about. Margins are damn thin for those guys post-covid and this won't help
Imported or not, the tariffs cause price increases on domestic production as well. If make steel bolts in Pennsylvania and my competitor makes the same thing in Ontario, we both charge 1 dollar each in this made up example. Now his are $1.25. Why would I charge anything less than $1.24? Especially since the tariff pushes all the buyers my direction anyway which increases demand, which increases price until it inevitably levels out after the short term chaos settles we are exactly where we started except everyone is magically stuck paying 25 percent more than they were before the tariff.
CaseyImported or not, the tariffs cause price increases on domestic production as well. If make steel bolts in Pennsylvania and my competitor makes the same thing in Ontario, we both charge 1 dollar each in this made up example. Now his are $1.25. Why would I charge anything less than $1.24? Especially since the tariff pushes all the buyers my direction anyway which increases demand, which increases price until it inevitably levels out after the short term chaos settles we are exactly where we started except everyone is magically stuck paying 25 percent more than they were before the tariff.
Yes at first this is the case if US co decides to hike up price. The underlying idea that the current admin is poorly trying to promote is that now there is a product that can be made in the US, employing US citizens, supporting local factories instead of being reliant on importing goods from a country that isn't respecting them. New entrants then come in and compete with you at $1.24 and lower... or the Ontario company shifts manufacturing to the states. Like it or not, it's what US citizens voted for.
@hot.pocket since you guys import beech from europe and edges from Europe (not sure what other materials you guys source from out of country) how is this all likely affecting you guys production cost wise?
