As I’m sure you are aware, the new Tariffs soon to go into effect will have an impact on the costs of products coming from China, and therefore their price to the end consumer.
Leaving all politics aside, considering the enormous amount of products we consume imported from China, it is safe to say that there will be price increases across many types of products.
Since a good portion of branded merchandise comes from China, tariffs have been the most talked about topic in the promotional products world ever since they were announced. For starters, our major industry association quickly sent a delegation to Washington to communicate their concerns on how these tariffs would impact the small businesses that conform our industry.
We have not talked much about price increases with our clients up to this point, mostly because there was too much back and forth, and it was even put on hold for a brief while, but now it’s real, as of June 1st.
Will Promotional Products Prices Go Up?
Chances are, if you use branded merchandise, your costs will go up. But not across the board, at least not as a direct result of the tariffs in the short term.
In terms of products, we can expect to see price increases in electronic items, most bags, and some drinkware, as well as lanyards, desk and office products, among the most popular items. But we have to keep in mind that the tariff is applied at the cost in China, and not to our final price here in the US.
Our supplier partners have been working on ways to mitigate their cost increase. Some will not be affected because their production factories are located in other countries not subject to tariffs. Others only buy a small percentage of imported raw materials to use in their domestic factories, therefore their costs increase will be minimal. Others are 100% made in the USA.
But there are factories that are direct importers from China, who will be impacted.
How Can I Prepare?
There is no doubt there are adjustments to be made in our approach. This is what we’re recommending.
1. Review your marketing initiatives for the rest of the year.
This is a good time to put all your upcoming events and promotions on the table and take a look at the branded merchandise you were looking to incorporate, what you have at hand, and even be prepared to adjust your budget to set realistic branded merchandise expectations.
2. Combine branded merchandise purchases
Consider using the same giveaway for as many events as possible. This can work especially well for your lower-priced giveaways, but you might be able to use the same item for both your staff internal use and some of your events. By making a larger purchase you will lower the unit cost and therefore make your budget go farther.
3. Order larger quantities
If there are branded products you use internally and order regularly, check on pricing for ordering a larger quantity. It might be worth the savings to stock up a bit.
4. Consider domestic options.
I must admit that we at KSM, didn’t use to specifically look for domestic options before, even though we do work regularly with some very reputable domestic factories. There are, in fact, quite a few American manufacturers and there will probably be more popping up over time. Going forward, however, we will be taking a closer look at their products, every time, to see what can we include in the mix for our clients’ consideration.
One Last Thought On Tariffs
Although this is a big issue for the promotional products industry, we think this should not be a big issue for you and your company, long term. Even though price increases are likely unavoidable, in the end, it comes down to meeting your budget.
We are encouraging our clients to meet with us for project reviews, so we can find creative ways to minimize their impact on your marketing, and stay within budget.
I hope this information was valuable. We at KSM Promotions want to be the best resource when it comes to all things promotional products, not only to talk trends and ideas but also on keeping you informed when situations like these arise.
If you have any questions or want to review your upcoming promotions, we are always here to help, please get in touch with us at your convenience.