To Tariff or Not to Tariff

[William Gladstone]

Dear Members,
I've found the opinions, POV, information of the diverse community of Berserkers has been often times extremely helpful.

So I was very interested to open this question to the members to hear POV outside of my internal dialog.

I've only spoken with a few - a major West Coast retailer, a California and a N.Y. importer distributor - asking what are you planning to do with your prices because of this new Trump Tariff of 25%?

So far we've not made any adjustment, however, from what I hear and what I am beginning to see on-line, I wonder when we should?

When we purchased E.P. and the Euro was 1.42 , and several years later when it was released, the Euro was 1.18, how could we compete.
Now we are in the reverse position - quite by accident. We loaded up on inventory of Fine Bordeaux and Burgundy and our prices are causing clients
from all over the U.S. to contact us.

Should we move our prices up? And when? For now I like attracting new clients.
I looked at Ch. Giscours, 2015- we are offering at $49/btl, and the rest of the U.S. market is at $70, $80, and $90.

[T Klonoski]

I would up prices moderately but offer deeper discounts than normal for large orders.

[William Gladstone]

I would up prices moderately but offer deeper discounts than normal for large orders.

mmmm....
thanks

[Chris Freemott]

Prices are naturally downward sticky. You should look at your current inventory and price to replace it at the market cost. I realize this is harder with wine than, say, gasoline. But, the pump reflects the futures price, not the past price.

You took the risk. You laid out the captial. You hold the inventory and pay for the insurance and space. Get paid for your risk. You needn't take the entire spread, but, take some for sure.

[William Gladstone]

Prices are naturally downward sticky. You should look at your current inventory and price to replace it at the market cost. I realize this is harder with wine than, say, gasoline. But, the pump reflects the futures price, not the past price.

You took the risk. You laid out the captial. You hold the inventory and pay for the insurance and space. Get paid for your risk. You needn't take the entire spread, but, take some for sure.

thank you very much
I wish, that is sound business principal,
so often we sell very expensive bottles at exactly the same price we spend to replace (S Eagles are a perfect example) - I always shudder at that.

I don't know,
My sense is to wait and see, and for now, no one within the business has the time to do this,

I did not think of replacing what we sell, simply because of the vintage issue..
I don't know what we'll do

[Chris Freemott]

Another consideration is to evaluate your own desire for your return on capital. If, as you sell vintage wines, the demand is fickle to the price (and may frankly question and dismiss a price that is significantly lower than others) then price to your return on capital. Evanluate how long you've had to hold the wines and what your turns are.

I sell wine glasses. I work on thin margins b/c I can turn my cash 5x a year. If I could only turn 1x a year, I'd be more price sensitive.

[William Gladstone]

Another consideration is to evaluate your own desire for your return on capital. If, as you sell vintage wines, the demand is fickle to the price (and may frankly question and dismiss a price that is significantly lower than others) then price to your return on capital. Evanluate how long you've had to hold the wines and what your turns are.

I sell wine glasses. I work on thin margins b/c I can turn my cash 5x a year. If I could only turn 1x a year, I'd be more price sensitive.

Yea... we do not turn like that... we sit, for Bordeaux, for a year, 2 years and longer. burgundy we turn in a year, and california we pretty much sell right from the winerys.. complicated by the Euro movements and most of the past 10 vintages a lack of appreciation from E.P. to release..

[alan weinberg]

make some money. But remember, you can cut a man’s hair many times, but can scalp him only once.