While the suspension will no doubt come as a shock to some buyers who routinely like to purchase items from Hong Kong sellers because of cheaper prices than their US counterparts, it will almost certainly harm Chinese sellers too who rely upon the service to get their products into the hands of US buyers. Needless to say savvy sellers will find ways around this obstruction such as first shipping their wares to Singapore and then on to the US, but the added cost of trans shipping may be enough to discourage their US customers from making further purchasing moves.
Earlier this week, we heard from our principal distributor who stocks several key lines, among them the Hobby Master range of diecast military products. Hobby Master, as it turns out, is made in Bangladesh, which isn’t subjected to the same abnormally high tariffs the Trump administration plans to impose upon China in early May. Unfortunately, this doesn’t mean that Bangladesh has dodged a bullet — far from it. According to the latest tariff plans, Bangladesh will be subject to a 37% tariff, making any products we import from the country exceedingly expensive.
According to our distributor, both the April and May shipments of Hobby Master products are not subject to the tariffs. However, both the June and July shipments will have a 10% tariff tacked on to their existing prices, meaning we’ve had to adjust the retail prices for said items by approximately the same margin. But here’s where it gets dicey. Shipments that do not clear customs by July 8th will be subjected to the 37% tariff already discussed. As a result, our distributor plans to delay the arrival of both the August and September shipments until such time as the tariff picture comes into greater focus. In other words, if the current crisis is not averted and the tariffs do, in fact, get imposed it’s likely that we could see a pause in shipments from Hobby Master, perhaps indefinitely or at least until everything has been straightened out. Lines such as Corgi, Oxford, JC Wings, Panzerkampf and Dragon will almost certainly face the same dilemma since they are manufactured in the PRC, where the current proposed tariff has been pegged at 145%, making them far too expensive to even consider importing. Politics aside, this is clearly a recipe for disaster for a great many industries, not just ours.
Needless to say, we’re hoping that the current trade war is settled to everyone’s satisfaction in the coming weeks to prevent this scenario from occurring. If it should happen, there’s a good bet that product already in stock will go up in price too, since demand will likely remain strong and supply won’t be able to keep pace. As it stands right now, we have ample supplies of each line but cannot predict our stock situation towards the later part of the year should we experience a run on the brands. The same holds true for virtually every segment of the toy industry, so what you see available on store shelves may become scarce at a later date or see their prices jacked up well beyond the norm. You can bet that manufacturers, distributors and retailers are lobbying the Trump administration to re-consider its stance on tariffs, or at least roll them back to acceptable levels so that the holiday season isn’t a lost cause. Thus far its not clear if the proposed tariffs will have an adverse effect on new product announcements since product will still be manufactured for other regions around the world but perhaps in lesser quantities.
If the trade war does goes on for much longer, additional problems could creep into the overall equation that would almost certainly affect the retail sector. For instance, right about now is when most Asian manufacturers are beginning to produce toys and other related products for the upcoming holiday season. If these manufacturers are forced to wait and delay their manufacture, a situation could occur where our US ports are clogged with an abundance of late shipments, a scenario very reminiscent of what occurred during COVID. So even if the green light is issued to make and ship holiday-related products, it isn’t certain if they’ll make it in time to be of much value. Food for thought in today’s economic climate where events seem to be changing on an almost daily basis.
With the Trump Administration’s April 2nd deadline for imposing tariffs fast approaching, it appears as if several manufacturers and distributors are taking a wait-and-see stance when it comes to importing their goods into the US. Presently its not clear how much of a tariff will be applied to product being imported from such countries as China, one of the principal makers of diecast models, and a longtime target of the current administration. Indeed, one of our distributors has already indicated that they plan to increase prices on several lines that they import from China weeks ahead of the looming deadline. Another has thus far decided to delay the import of several lines for the foreseeable future until the matter has been settled one way or the other. Should the tariffs go into effect next month, its possible that these lines will be held up at the ports for several months until a decision has been reached regarding their cost to consumers.
As it stands right now, it may be a rather dry summer and fall in terms of new product making it to market, or at least until a trade agreement has been reached that satisfies both nations. To date, we’ve had to adjust the prices on new product coming in from Air Force 1, Luft-X, Wings of the Great War and Armor Collection. Other companies — most notably Panzerkampf, Legion, Corgi, Dragon and JC Wings — may soon have to be cost adjusted if the trade negotiations fail and pressure builds to import these lines to prevent them from languishing in limbo. Still other key manufacturers — Hobby Master, among them — are made in Bangladesh, may or may not be affected by tariffs since talk seems to change on a week-by-week basis based upon the mood and climate in Washington. To be fair, the president has said that he is “flexible” regarding the imposition of across-the-boards tariffs but as we all know by now flexibility can have different meanings depending upon who we are talking about and when the conversation takes place. In any event, we hope to have further updates regarding the tariffs and, in so doing, discuss possible delays in receiving certain lines as trade negotiations progress.
We’ve been overwhelmed by the ground swell of support we’ve received since announcing our inventory liquidation sale on Monday. We thought we would close up shop due to an illness in the family — to be more specific my wife was diagnosed with Normal Pressure Hydrocephalus (NPH). Naturally, I was overcome with grief and worried about our future when I heard the news, unsure what this sudden and potentially dire medical condition would mean to us.
Fortunately, we have a doctor in the family who immediately came to our rescue. She spirited my wife off to Dallas, Texas, where she lives and works and admitted her to Parkland Memorial Hospital, where my wife has been receiving extraordinary care. At its core, NPH means there is a build up of fluid in both the spine and brain, which can lead to all sorts of complications, from loss of balance to delirium and then some. To combat this, two procedures need to be performed – the first, draining of any fluid that has built up in the spine by performing a lumbar puncture, which was successfully done earlier this week. A second procedure involves inserting a shunt into the cranium, which then drains the head of any remaining fluid. The follow-on procedure is scheduled for early March and I’ll be flying to Dallas next week to be with my wife prior to and after the procedure has been performed.
Despite having a great 2024, I decided to announce my retirement and intended closure of our shop in 2025 after hearing the news. When I made that decision, several people indicated that it might be best to see how the second procedure turns out before going any further. That said, I reluctantly agreed, although I will eventually move our business, home and belongings to Dallas to be closer to our immediate family should anything else be required. I don’t know exactly when this will occur since this whole episode was unexpected and unplanned. I doubt it will happen in 2025 since there’s lots of moving parts and people to consider. Frankly, it isn’t the best time to either buy or sell a home. Our goal, therefore, is to change locales sometime next year, when I believe conditions will be more conducive to making a cross-country move. So, for now, our business will remain open and run as usual, even if it means having to fly back-and-forth to Dallas to see and be with my wife.
In the mean time, I thank you for your support and thought it made sense to share with you our present situation and how it may impact our business for the balance of the year. Its been a harrowing few weeks and hope we can finally see the light at the end of the tunnel when this crisis is behind us.
With the recent imposition of a 10% tariff on goods coming from China, it remains to be seen how both manufacturers and distributors decide to pass along these cost increases to the trade as well as the consumer in both the near- and long-term. In my opinion, most will take a wait and see attitude over the next few weeks to see if these tariffs will either be rolled back or remain in place based upon China’s reaction. Bear in mind, its entirely possible that not only will the tariffs remain in place but they could increase further should the Administration feel it necessary to raise the stakes even higher if China doesn’t get the subtle message or decides to retaliate in kind. During his presidential campaign, Trump had threatened a 60% tariff so now that he’s in office anything and everything is on the table. Presently, its not clear if certain manufacturers — among them Hobby Master, Panzerkampf and a few others — will be affected by the tariff and whether or not companies operating outside China will pick up sales by being located outside the PRC.
Its entirely possibly that the new Administration will up the stakes even further by placing an across-the-board tariff on every country that currently does business with the US, all in an effort to demonstrate to the world that we mean business when it comes to concessions. Over the weekend, both Canada and Mexico, our nearest neighbors and close allies, saw a 25% tariff imposed upon them, so it isn’t a stretch that even more allies will get the same treatment should Trump feel its within his rights to push the bounds even further.
So, as we start 2025, things aren’t looking especially great in the commercial space unless something substantial occurs by one or both parties. Geo-political events being what they are, it could be a situation where one side is waiting for the other to blink before they can formulate a response to the US initiatives. It isn’t a pretty scenario and one that will undoubtedly lead to a scarcity of product and higher prices for what does come into the country.
At this year’s Consumer Electronic Show (CES) held in Las Vegas last week, Meta (a.k.a. Facebook) indicated that they had struck an agreement with eBay to host their listings on its Facebook Marketplace. Here’s a brief synopsis of the announcement.
“Shares of eBay closed up 9% on Wednesday as Meta said it will allow some listings to show up on Facebook Marketplace, its popular platform connecting consumers for local item pickups and more.
EBay stock reached its highest level since November 2021.
The rollout will begin with a test in Germany, France and the United States, where buyers will be able to view listings directly on Marketplace and complete the rest of their transactions on eBay, Meta said in a release.
The partnership could provide a boost to eBay’s marketplace business, which has struggled to compete with e-commerce rivals like Amazon, Walmart, Temu and even Facebook’s own marketplace platform that lets users buy and sell items.
EBay has recently embraced niche categories like collectibles and luxury goods to try and keep buyers and sellers returning to its site. CEO Jamie Iannone told CNBC in an October interview that shoppers were coming to the site, known for its used and refurbished goods, as they sought out discounts amid a rocky macroeconomic environment.
Meta’s move is an attempt to appease the European Commission, the executive body of the European Union, after the regulator fined the company 797 million euros ($821 million) in November for tying its Marketplace product to the main Facebook app.”
Curiously its not clear when this arrangement will take effect, whether or not eBay will share part of its commission with Meta and which listings will be shown on Meta’s far-reaching platform. Thus far, we are awaiting information from both companies concerning further details that will undoubtedly impact our business. According to the announcement, a test phase will be introduced that will enable buyers from the US, Germany and France to be able to view and purchase our products, although its not clear if special overseas shipping rates will be integrated into the system. We are assuming that parcels bound for international destinations will first be sent to eBay and then on to the customer. Its highly doubtful that anything will be sent to Meta. Moreover, arbitration and returns will likely be handled by eBay should a problem develop and messaging between the parties will almost certainly be handled through eBay rather than have Meta get involved.
With the announcement, rumors began circulating online that Meta was interested in purchasing eBay outright as a means of keeping up with certain dominant players in the e-commerce sector. If so, this would have a dramatic impact on the reach and selling capabilities Facebook has long sought to bring to its platform. It would also create a viable revenue stream that made use of both Instagram and What’s App in increasing their overall appeal, reach and marketing power.
With President-Elect Trump set to take office later this month, its unclear how his assumption of power will affect certain segments of the business world that currently import products from China. As part of his electioneering and political campaign, Trump had repeatedly promised to place a tariff on certain countries that he believes take advantage of the United States. China is one such country Trump has targeted, claiming they are ripping off our intellectual properties and underselling US-based companies for years on end.
Many of the companies that we do business with are located in mainland China so it doesn’t take a genius to realize that said companies will undoubtedly be adversely affected by tariffs. Many companies could see as much as a 60% charge levied against them unless the Chinese government decides to play ball with the US. Other companies we do business with are located in Bangladesh and Mexico so its unclear if these companies will be affected by tariffs or by how much.
One of our distributors has already indicated that they will be passing along any additional charges they may incur to their clientele until the tariffs have either been scaled back or removed entirely. If this occurs, we will make an announcement indicating that the pre-order price for such-and-such line will be increased, then pass along these costs to our own clientele in line with the revised MAP. We’re sorry to have to make this announcement and/or increase the price for certain lines but hope you understand that we play no role in these potential cost increases which could take effect later this month.
Astute customers may have noticed that our checkout process has changed dramatically over the past couple of weeks thanks in part to an update rolled out by our web hosting solution as well as some follow-up calls from yours truly explaining why the update broke some important features, most notably shipping. In any event, after spending some time on the phone with various technicians, the shipping options are now integrated into one drop down menu and includes all three major carriers we use along with different delivery options.
In hindsight, I’ve learned a long time ago that while technicians are great at performing functions such as rolling out highly technical updates, they need to be reminded of the fact that certain commercially important factors — such as making available differing shipping options — need to be present at checkout, particularly at this time of year when some customers may need to receive their parcels in quicker fashion to avoid holiday-related delays.
Now, on to a separate matter that has mushroomed over the past year or so. We’ve decided that after twenty-five years of doing business in the ether we can no longer accept pre-orders without accepting payment first. In the past, we typically had to contact the customer to obtain their billing information so that we could obtain a new authorization code, which then allowed us to get paid for the transaction. We’ve found that sometimes the customer was unwilling to provide their CC information either by phone or via messaging protocol, so we were, in effect, stuck with laying out money for an item(s) without getting paid. Now, I can understand a customer’s trepidation with giving out their information outside of a secure means of payment but from our vantage point, this issue was becoming problematic and was no longer sustainable from a financial standpoint. So, going forward, customers will be billed at the time their order is being placed not upon the date it is being shipped out. We recognize this could be an issue for some but hope you also understand that we can no longer lay out money for a customer in the hopeful event that we will one day get paid for the transaction. Other dealers may feel differently, so we fully understand if you can no longer place your pre-orders with us.
Ebay will soon be expanding their international shipping service to those countries we may not have serviced in the past. While we may not ship to certain countries around the globe, eBay feels that they have more clout when it comes to international shipping and is willing to protect both the seller and the buyer should problems arise, thereby reducing the so-called “friction” that can occur with an international sale.
Essentially, after the buyer has made a purchase, we are responsible for boxing up the item then shipping it to their international shipping hub in Chicago. Upon its arrival, the parcel may get inspected by eBay to ensure that it doesn’t contain hazardous material and that the item arrives intact and without any damage. Afterwards, it is then sent on to its final destination with tracking information provided to both the buyer and seller. Naturally, it may take a bit of time before it actually arrives at the buyer’s stated location. Please note that this service will begin on November 11th. The accompanying video, prepared by eBay, does a fine job of explaining the service in greater detail.
Please note that we have no hand in either the production nor the distribution of the products we sell. While we may offer advice to several of the model makers we work with so that they have a better understanding of what our clientele may be requesting, our affiliation goes no further and we have no financial stake in any of the companies we deal with. Moreover, anticipated dates of delivery are just that — anticipated. Release dates are subject to change and can oftentimes lag far behind the original intended date of release projected by either the manufacturer or distributor. Vagaries in the supply chain can and, on many occasions, slow the arrival of shipments by lengthy periods of time.
In summation, the companies we work with are relatively small as compared with far larger corporations in the toy industry yet are looking to serve a global if niche marketplace that continues to grow both here and abroad. So, while product may show up in eastern and southern Asia where many of these manufacturers are located, it may and oftentimes can take longer before said product makes it to our shores and is then available for general sale. As a result, it may take us several months (and in certain cases years) before we can fill a pre-order. Please bear this in mind if you have your heart set on a newly introduced item and choose to pay us up front for an order using debit payments such as PayPal or AmazonPay.
