re: So, about that tariff: Just got hit with $11K adder notice

quote:

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He's incurring $132,000 in additional costs, but you're saying that that will only cut his margin by 10% of that or $13,200.

His gross profit will only be $396,000 not $514,800. I don't even know what you're thinking.

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Why the frick would he (the retail dealer) be incurring $132,000 in additional costs?

This isn't how manufacturing and retail sales works.

A ton of steel costs ~$2,100 right now. And the transportation costs are around .15 cents per pound. So the manufacturer's cost is about $2,400 per ton to acquire steel (pre-tariffs).

He said each machine uses about 50,000 lbs (25 tons) of steel. So about $60,000.

$11,000 surcharge equates to about an 18% upcharge in material costs pre-fabrication. This means materials per unit are costing $71,000.

But they're selling the finished product for $440,000. This finished product includes that $11,000 additional material costs.

Why the frick would the DEALER pay the additional material costs and not the end-customer?

It makes ZERO sense that he would be taking this directly off his profits.


This is basically like telling us that a car dealership is absorbing the added costs to build a car rather than the added costs being incorporated into the price of the car.

That's a crock of shite and not how any of this works.


As I said, this is a BS story by the OP.