PPB July 2019

about the tariffs. “I added this line to my SAGE website: Please confirm pricing with your AAAA Designs representative due to new tariff implementations as of May 10, 2019. Prices shown on our website may not reflect these new changes and are therefore subject to change at any time,” he says, adding that he also included the line to his default presentation template in SAGE, just to be safe. When communicating with her customers, Janie Holbrook, co-owner of distributor Tee It Up Promotions in Oakton, Virginia, says, “I often send out quotes that do not become firm orders for days, weeks or months while customers wait for internal purchase orders, work with committees, etc. Since last September, I have been adding notifications that read: ‘Pricing subject to change as a result of tariffs on Chinese imports. Pricing will be confirmed when order is finalized.’” Jo-an Lantz, MAS, CIL, president and CEO of distributor Geiger in Lewiston, Maine, says the company has had to address the ongoing issue of tariffs and pricing uncertainty for quite some time, so it has implemented several measures relating to communicating with clients. “When sending a client a quote, we state the price is only valid for X days (it depends on the product) due to tariffs. If the client orders after that time period, we double-check to make sure pricing is valid, and if there is an increase we go back and explain,” she says. “There is so much in the media about tariffs, clients truly understand.” Geiger took a proactive approach beginning last year by providing an explanation of what the tariffs are and preparing clients for what they could mean for prices. “In many cases, we urged clients to order earlier, and some did,” she says. Although Geiger has absorbed some of the tariff increases and has seen a decline in margins on some products, she says that “overall, the suppliers have been terrific in communicating, our sales partners have done a really fine job in communicating and our customers understand.” “We have been really proactive about this issue with our clients,” says Larry Cohen, CAS, president of distributor Axis Promotions in New York City, adding that the company is including the following clause in all customer quotes: “Due to the impending tariff increases, all pricing must be confirmed at time of order. Pricing is subject to change.” On sales orders, this copy is included: “Please note that on May 10, U.S. Customs Border and Protection implemented the additional 25% tariff. This item is currently NOT subjected to the additional tariff. However, please note that there is a potential for duty rates to increase an additional [X percent] for this item prior to shipping.” In addition, prior to the announcement of the tariff escalation, Axis Promotions emailed a nearly 500-word letter to all clients explaining the tariffs and their impact on pricing, the product categories included and how the new trade regulations, along with spikes in gas and freight costs, are affecting the cost of rawmaterials. The letter noted that Axis Promotions would keep clients updated and fully aware of the impact on the promotional products industry despite the uncertainty of the situation at present. “Once you know what the tariffs are going to be, you have some options,” says Cohen. “Everybody is going to adjust. Once you know what’s going to happen, you just adjust. If it costs more money, the impact will be maybe choosing items that aren’t subject to a tariff or trying to find another location to get them from.” One thing he has not heard from customers, fortunately, is that they won’t buy promotional products because of the tariffs. “We’ve not heard that at all,” he says. “One thing I have not heard fromcustomers, fortunately, is that they won’t buy promotional products because of the tariffs. We’ve not heard that at all.” Larry Cohen, CAS, president of distributor Axis Promotions in New York City While the majority of imported promotional products come from China , a percentage are imported from other countries, including India, Vietnam and Mexico. The Tariff Effect | FEATURE | JULY 2019 | 57