# Shars Price Increase



## macardoso (Aug 10, 2018)

I case any of you are as avid fans of Shars tool company as I am, they have announced impending price increases due to the US/China tarriffs. The price increases have not yet taken effect, so now might be a good time to pick up that new tool you have been looking at. See their announcement below:

To Our Valued Customers: 
As you are undoubtedly aware, the Trump administration has imposed a 25% tariff on certain products brought into the United States including steel and aluminum, and there are upcoming new rounds of tariffs being put in place later this year.  Under these circumstances we have to increase our prices on certain product groups to anticipate the cost increase.  We have tried to absorb the manufacturing cost increase as much as we could in the past but this year circumstances are more complicated and could take some time to reach a beneficial agreement.

Most of our price increases fall under indexable cutting tools, workholding, tool holding and some measuring tools.  The current price increase will not affect Aventor, ZCC USA, Ultra-Dex, Edge Technology, Kurt, Haimer, Carvesmart, Mitutoyo, Starrett or USA made solid carbide end mills.

This price increase will be effective September 17th, 2018 and go through the remainder of 2018. 


Ps: Per the forum rules, please keep this from becoming political


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## savarin (Aug 10, 2018)

So they are increasing the retail prices before the supply price increases.
Sounds like an excuse for a money grab to me.


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## Janderso (Aug 10, 2018)

This may be a stupid question but what the heck.
When I go down to my local metal supply, is the steel I purchase made in China?
I have a great local source, I never questioned where it came from.


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## higgite (Aug 10, 2018)

savarin, I agree. Nice of them to raise prices "to anticipate the cost increase". Reckon if the time ever comes that tariffs are reduced, they will lower their prices "to anticipate the cost decrease"? Rhetorical question. I'm pretty sure we all know the answer already.

Tom


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## Cadillac (Aug 10, 2018)

Janderso said:


> This may be a stupid question but what the heck.
> When I go down to my local metal supply, is the steel I purchase made in China?
> I have a great local source, I never questioned where it came from.


Yep or canada which is also affected by these tariffs. Very little made in America. Hopefully with the tariffs it will bring companies back!


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## ddickey (Aug 10, 2018)

Hmm,
I don't remember a price drop when their corporate tax got slashed recently.


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## chip maker (Aug 11, 2018)

Another thing that is funny with Shars is that some items on their web site charge shipping but if you go to E Bay the shipping is free. I'm sure it isn't everything because they don't seem to sell everything on E Bay that they have. I still use them as they have a lot of things with good prices but wait till all the price increases hit.


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## blaser.306 (Aug 11, 2018)

Non issue for those of us here in Canada, While there are tools I would like to buy from the aforementioned company, their shipping out of the us is absurd... $47.00 USD ( roughly $65.00 CAD ) for a single axa size qc tool holder! They can keep it.


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## Bob Korves (Aug 11, 2018)

savarin said:


> So they are increasing the retail prices before the supply price increases.
> Sounds like an excuse for a money grab to me.


Well, at least Shars is giving a warning of the price hike in advance so purchases can be made in advance of it at the current prices.  Of course, that may be a sales ploy as well...


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## RJSakowski (Aug 11, 2018)

The questions that I have are, is the tariff based on the cost of the steel content in the product or on the total cost of the finished good?  If the latter, how much steel must a product contain before it is considered a steel product?

An AXA tool holder, for example, may have $1 worth of steel but $20 worth of value added as machining.


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## Winegrower (Aug 11, 2018)

We can see the future from here...


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## JimDawson (Aug 11, 2018)

RJSakowski said:


> The questions that I have are, is the tariff based on the cost of the steel content in the product or on the total cost of the finished good?  If the latter, how much steel must a product contain before it is considered a steel product?
> 
> An AXA tool holder, for example, may have $1 worth of steel but $20 worth of value added as machining.



While what you say is correct as far as material content of the tool, the tariff list specifically includes machine tools and tooling.  I saw the whole list somewhere but I can't find it now.  Includes both CNC and manual machines.  Not sure what the tariff rates are.

To comment any further on this would require to getting into the politics of it, so I'm not going there.


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## projectnut (Aug 11, 2018)

savarin said:


> So they are increasing the retail prices before the supply price increases.
> Sounds like an excuse for a money grab to me.



This is quite common.  Rather than have to dig deeper in their own pockets to pay for price increases companies raise their prices in advance so the cash is in hand when it comes time for them to make the next purchase.  Keep in mind they probably order $100,000.00 worth of parts at a time.  Having to come up with another $25,000.00 out of pocket would seriously impact cash flow.


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## higgite (Aug 11, 2018)

projectnut said:


> This is quite common.  Rather than have to dig deeper in their own pockets to pay for price increases companies raise their prices in advance so the cash is in hand when it comes time for them to make the next purchase.  Keep in mind they probably order $100,000.00 worth of parts at a time.  Having to come up with another $25,000.00 out of pocket would seriously impact cash flow.


And they figure it's better to impact my cash flow than their own. 

Tom


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## macardoso (Aug 11, 2018)

RJSakowski said:


> The questions that I have are, is the tariff based on the cost of the steel content in the product or on the total cost of the finished good?  If the latter, how much steel must a product contain before it is considered a steel product?
> 
> An AXA tool holder, for example, may have $1 worth of steel but $20 worth of value added as machining.



I believe that Shars buys a portion of their finished goods directly from China, so the tariff affects the purchase price of the goods directly.


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## RJSakowski (Aug 12, 2018)

The latest harmonized tariff schedule is here. https://hts.usitc.gov/current 
It is effective August 1, 2018.  Sections of interest to machinists would be found in Section XVI, Chapter 84, pp 67 and later.  For reference, here is the schedule for 2017.  https://hts.usitc.gov/view/release?release=basicCorrections2


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## middle.road (Aug 12, 2018)

Actually you have to admit that it was a decent move to notify their customer base of the anticipated increases. 
I haven't received any messages or seen any notifications from other suppliers...

In early July the cargo ships were racing to get loaded in China and underway before the tariffs took affect. So the September time frame makes perfect sense. This would coincide with the next shipment coming in and as noted by ProjectNut in post #13 above, the cost increase due to the tariffs will amount to a rather substantial amount of money.

It is not a 'money grab' by any stretch of the imagination, it is standard business practice. 
If you had a business that sold a great deal of imported goods would you absorb the cost of the tariffs?
The cost of these tariffs are going to be borne by the end users, large and small, and ultimately the end consumer will absorb the final costs.
It is basic economics 101, costs are always passed on.

It is a global economy now, the time has come to adapt and change, even though change is difficult.


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