How Tariffs & Taxes Affect the Furniture Business

No one likes more taxes and higher prices. We wrote this article so everyone can understand that things may sound much worse then they really are. Being in the Wicker business we will use our own products as an example and also use simple round numbered math so it is easy to follow along.

EG—let us say that a particular wicker chair costs $100 in the country it was made in.

We call that the first cost.

That is not the final cost to the people selling these chairs.

It costs money to ship them into our country.

Furniture travels on steamship lines in containers.

Eg—if the total cost to ship a container from the country of origin costs $4,000 and the container holds 400 of chairs we divide the $4,000 by 400. This comes out to $10 per chair for shipping costs.

We also have costs to have our shipments cleared by Customs so our furniture is allowed to enter the USA and more costs to have our truckers go to the piers, pickup our container and bring it to our facility to be unloaded.

After we have the chairs, we have the cost to make a cushion for them.

We only use American Made Cushions as we find the quality is much better. Then the chair/s have to be boxed for shipment. The boxes cost money. The labor charges to prepare the order cost money. The tape & labels we use on the boxes costs money. The cost to ship the chairs to our customers cost money.

Everyone pays with a credit card.

The credit card companies charge about 3% of the total sale to process your order.

EG--$1,000 Sale. The credit card companies charge about $30.

Fyi—if we charge a $1,000 order they charge the $30 fee and if you cancel before we ship –not all items are allowed to be canceled—

When we credit you the $1,000 they do not refund the $30 fees. That $30 is gone with no sale to offset it.

So now you get an idea of most of the costs involved, but back to the point.

Where do the tariffs come in?

They are only charged on the initial first cost. In this case it is the $100 we started with. So you now know that a 25% tariff may only increase the final selling price by about 10%. No, we do not want our government to tax us more and take the extra 10%, but a lot of people think it is 25%.

We at Wicker Warehouse being in business Since 1978 have a large pre tariff inventory so we held our prices in hopes of our country reaching a trade agreement.

If one is reached it will mean really good things for our country. If not, next season you will see prices rise by about 10%.

We believe free trade is a wonderful thing. It allows our American businesses to send our products all over the world.

And allows our USA population to enjoy products from all over the world. Wines, olive oils, cheeses and yes furniture.

Free trade means people worldwide can enjoy and experience a wide variety of the best products.

We hope that this was interesting and informative.