Black Friday Uncertainty with New 50% Tariffs on 400+ Product Categories!

What are the implications of newly imposed 50% tariffs on a wide range of consumer goods?  Will it threaten Black Friday sales?  Al Frank & HRG CEO Boyd Evert discuss the market uncertainty and the potential impact on consumer behavior. Boyd emphasizes the need for suppliers to take proactive measures and offers Suppliers a FREE RISK ANALYSIS to help them navigate the challenges posed by these tariffs and market conditions.

Takeaways
50% tariffs are affecting over 400 product categories.
There is significant uncertainty in the market due to tariffs.
Suppliers may need to pass costs onto consumers in the long term.
Retail suppliers face difficult decisions regarding pricing.
The impact of tariffs could affect over $300 billion in imports.
Consumers may choose to buy items early due to uncertainty.
Black Friday sales may be softer than expected this year.
Companies need to prepare for compliance with new regulations.
Risk analysis can help suppliers minimize exposure to tariffs.
Proactive strategies are essential for navigating market challenges.
titles
Navigating the Tariff Landscape: What Suppliers Need to Know
The Uncertain Future of Consumer Goods Amid Tariffs
Sound Bites
"There's a lot of known unknowns"
"I think it's going to be a long year"
"Wiser decisions, fewer deductions"
Chapters
00:00
Impact of Tariffs on Retail Suppliers
04:01
Consumer Behavior and Black Friday Uncertainty
06:15
Risk Analysis and Strategic Moves for Suppliers
06:55

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"Wiser Decisions, Fewer Deductions"

Transcript

Al Frank (00:01.518)

50% tariffs are now in effect on more than 400 product categories that contain steel or aluminum, basically anything shiny or metallic, but also everyday items like plastics, personal care products, appliances, furniture, car parts, baby strollers, and hundreds more could all be subject to these new tariffs. Boyd, what are your immediate thoughts on the impact of all of this?

Boyd Evert (00:28.192)

I think this is throwing a lot more uncertainty than we counted on. I thought after the 90 day window had expired that we were going to start to see how this is going to pan out. But I think we're heading in the opposite direction where I think companies are at a point where, especially CPG suppliers, are in a place where they're not sure where this is going to land. And I'm concerned myself for our clients that they start to prepare for

the long haul because I don't know that we're going to see the end of this anytime soon.

Al Frank (01:03.468)

It was hard for anyone to prepare. There was very little advance warning on these really wide ranging tariffs. It's estimated that it could affect more than $300 billion worth of imports. No doubt this is going to lead to some very difficult decisions for retail suppliers. Can they possibly eat the cost of this or will they have to pass it on to consumers?

Boyd Evert (01:07.199)

Yeah.

Boyd Evert (01:24.084)

I think in the short term, they will, but in the long term or mid to long term, I think they're going to have to find a way to recoup that cost because I think as we've discussed before on savvy supplier podcast that really you have just three different groups of people that could pay for this, either the consumers in the form of a price increase, the businesses, retailers slash or I'm sorry, let me back that up.

There's three groups of people that can pay for this, the consumers, the companies themselves, or the taxpayers that are subsidizing these. So you might have an import country that might be subsidizing it. don't know that you can insulate any, I mean, aside from those three, I don't know who would pay for it aside from those, those three. So in the short term, yes, longterm, no, somebody's going to pay for it.

Al Frank (02:21.774)

I'm thinking there might be retaliatory tariffs added into this.

Boyd Evert (02:26.844)

Right. Absolutely. And so I think we've got lot of known unknowns as the saying goes, right, that we know that there's a lot of things we don't know. And I think one of the things that struck me in looking at the release of all of those different categories of items is it felt very similar to dealing with hazmat requirements that retailers have to comply with.

And one of our clients has, they have over 10,000 items and they're in HBA and a few other categories. And in those areas, they have to manage what ingredients go into those different products. And if there's enough of that particular quantity in a product, they have to flag this Hazmat.

It also is done by state. So California and Vermont have some of the more aggressive regulations around those items. And so I remember talking to this particular supplier a few years ago because we had some issues with compliance fees and what they were being charged. And when I got done talking to them on the phone, I felt like this is a bureaucratic nightmare because they have to

submit these lists to those state agencies, they come back and they say, does it fall within that? And each retailer with stores, let's say operating within California, they have to handle those items differently than, let's say, Nevada. So you go across the state line, you could, if you had a person going to work in California that lived in Nevada, they would, or transferring from one retailer in Nevada to California,

they would have to be trained in on how to handle returned merchandise or defective merchandise because if it, if it qualifies for that, it has to be handled in a specific way and disposed of. You just couldn't put it in the dumpster. You'd expose your company to large fines. So to my mind, that's the level of granularity when you're having to do that. And I don't think any company today is prepared.

Boyd Evert (04:47.594)

to that to track how much metal is in this product or plastic or whatever and where is that sourced? Good night. This is going to be, it's going to be a long year, I think.

Al Frank (05:01.294)

You mentioned that there are a lot of unknowns right now, but even so, can suppliers afford to take a kind of a wait and watch approach or do they need to take action now? You mentioned to me earlier today that maybe Black Friday hangs in the balance at this point.

Boyd Evert (05:17.18)

Absolutely. So I think one of the fallouts from this is that you're going to see consumers that are going to hear about how this could impact certain items that they might be looking at. Let's say it's a large appliance or some other such thing that might be going on sale that people are counting on going on sale on Black Friday. They might just go ahead and buy the item now and forego the potential savings of Black Friday because it might even be a wash or maybe a loss for that consumer.

So you're going to head into Black Friday potentially with a cloud over everyone's head wondering is this going to perform the way we expect it to? then also you've got other inflationary pressures, I'm hearing today, this morning I was talking to a supplier that was in the grocery category and they're preparing to pass on price increases.

from the tariffs. So we're heading into, we're in Q3 with a lot of uncertainty. Q4, I think there's going to be even more. the, have no idea what Black Friday is going to look like this year, but I think it's going to be softer than we expected.

Al Frank (06:36.75)

I know you've been helping a lot of suppliers of late, as you always do, but do you want to share a way for even more suppliers to get their own risk analysis at the moment?

Boyd Evert (06:47.07)

 We're offering a free assessment of your risks surrounding tariffs and other deductions that might grow out of those those tariffs. Just reach out to us here at HRG and we will let you know how to get yourself on a solid footing. There's some things you can do right now before you even know where this is going to land that I think we can help you out with.

and then prepare you so when you do know where this lands, how to position your company where you can minimize that exposure to potential fines and penalties because you didn't implement price changes in the correct fashion and you didn't handle the close off the risk from all of the conversations you have around different price changes.

Al Frank (07:40.664)

That's quite an offer. HRG is offering a Tariffs Risk Analysis for suppliers. And I know that includes guidance on one vitally important strategic move that all suppliers should make immediately. So you should schedule your free risk analysis by going to the HRG website, HRG-audit.com  So you should schedule your risk analysis by going to the HRG website, HRG-audit.com.

or by calling us at 479-616-1600 or by emailing us at info@HRG-Audit.com. HRG is ready and able to help you with your next steps. And our wish for you is this, wiser decisions, fewer deductions. See you next time on the Savvy Supplier.