Swivl is hit with new tariffs
Update 1/14/2019: A lot has happened in the last several months with respect to trade and tariffs. One just have to Google "China Trade" to get an idea on the ever changing landscape. The trade negotiations between China and the US are continuing and every day new data emerges. At this point it can go either way -- either the additional tariffs are removed completely or new harsher tariffs are imposed. On December 1st, 2018 a "trade truce" was declared by the President Trump -- a 90-day moratorium on any new tariffs. It delayed the implementation of the 2.5X tariff increase planned for January 1st. We do not have a concrete conclusions to the tariff situation and have decided to continue absorbing the additional October tariffs for the time being without changing prices until the situation settles. We are planning to increase Swivl prices if the situation continues to point towards preservation of the increased tariffs or addition of new ones. We'll keep everyone posted as the situation can change at any time.
Original Post from 10/17/2018:
Last week we found out that Swivl unfortunately has been included in the latest round of international tariffs created by the U.S. International Trade Commission. All Swivl robots are subject to the new tariffs -- 5x more than our previous duties. It is expected that the tariffs will be increased again as of January 1st, 2019 by another 2.5X increase.
For a small company like Swivl, these tariffs add significant costs and create a substantial operational challenge. Our unique products require a variety of specialized components that are only available in China. We have spent years creating the supply chain that brings the best value for our customers. Since the tariffs are immediate, we are already facing costs that affect our operations -- reduced hiring, product development, and new initiatives.
We’ve investigated it, but shifting production of Swivl elsewhere will raise the price of each robot significantly -- even more than the price with tariff increases. Consumer electronics industries shifted manufacturing to China more than 20 years ago. At that time, multi-billion dollar corporations forced the shift of the supply chain, manufacturing know-how, facilities, etc. to China as well.
Unless the situation changes, we will be forced to raise our prices to cover the additional tariffs. Since we know that a lot of educational budgets are approved in advance, we will absorb the additional costs in order to keep our current prices until January 1st, 2019. At that time, our prices will increase. So make sure that all your purchases are completed as soon as possible before we are forced to this.
We truly appreciate your business and we remain committed to creating innovative educational products. We hope that a reasonable solution will be found to the trade dispute and the tariffs will be removed. Please do not hesitate to reach out to me, our sales team, or our customer support if you have any questions.
Why can’t Swivl absorb the tariffs and not raise prices?
Swivl is a small US based company with limited ability to absorb additional costs. We do not have large cash reserves like big corporations. And we have to invest into our people and new product development. Trying to absorb the extra cost will negatively impact both.
Why can’t Swivl manufacture in the US?
Consumer electronics industries shifted manufacturing to China more than 20 years ago. At that time, multi-billion dollar corporations forced the shift of the supply chain, manufacturing know-how, facilities, etc. to China as well. Currently, shifting production of Swivl elsewhere will raise the price of each robot significantly -- even more than the price with tariff increases.
When will Swivl raise US prices?
We are working hard to find a way to get an exclusion or reclassification. We don’t know if that is going to be possible. We are already absorbing increased tariffs as of September. In January the tariffs will increase even more. Unless something changes, we will be changing the US prices in January 2019.
How much more will the Swivl prices be? How about international customers?
Assuming there are no changes to the current proposed tariffs, we expect the US prices to go up by about 10%. There will be no price changes for international customers.
What Swivl products are affected?
All Swivl robots, markers, and accessories. Swivl Cloud is not affected.
For how long is my quote valid?
Normally quotes are valid for 30 days. But any quotes issued in December 2018 will only be valid through the end of 2018. Unless the situation changes, Swivl will be forced to increase US prices January 2019.
Where can I find out more about tariffs?
You can simply Google “China tariffs” and read the published news articles as well as the analysis by various experts.
Full list of affected products: https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List_09.17.18.pdf
Official US Trade announcement: