In light of recent international events, we need to get ahead of what could be significant price increases and restricted availability of supply for virtually all the products we sell. This week, the U.S. Ambassador to the United Nation’s made a statement to the U.N. that the U.S. will not allow countries doing business with North Korea to continue to do business as usual with the U.S. If this becomes a reality, then we could impose high tariffs on Chinese goods or prohibit altogether the importation of certain products from China.
For Chinese goods, this means prices will go up and supply availability will be affected. The impact on products made in other countries, as well as those made in the U.S, is the same. If we cannot obtain Chinese-made products, the demand for similar products made everywhere else, including the U.S., will rise. This higher demand means higher prices in the U.S. This will not only disrupt the availability of products, but could raise prices by as much as double digit %’s on many of the goods we purchase for you, regardless of where they are made. Add in the additional panic buying by commercial and civilian customers and we know what the impact will be on our products.
Having been in the law enforcement industry for years and with current year Agency budgets ending in the next few months, I believe this is a key time to evaluate our risk in waiting until the last minute to place our fiscal year end purchases, both yours as Agencies and ours as a distributor. You see – we are in this with you.
CMC Government Supply currently, and has historically, held quote pricing for 30 days. As this situation in the global and U.S. economy develops in the coming days, we may need to reduce this time frame. To even consider this is unheard of in our company’s history.
I think of it this way…. The worst case scenario is pricing and availability changes rapidly and without notice, resulting in high prices, long lead times and possibly limited product availability. The best case scenario is this all gets resolved with business as usual. However, it is generally accepted that just the anticipation of increased tariffs will impact prices and availability no matter where our products are made. If this is the case, our industry, like most others, would find it hard to escape the price squeeze. By placing our orders sooner versus later and locking in current pricing and availability, we can mitigate some of the risk. This is not a call for increased spending. It is an appeal for informed decision-making by thinking through the timing of your budgeted purchasing plan.
These are just my thoughts. Please consider this when planning for your upcoming fiscal year end purchases. We are in this with you, and will do our best to continue to support you.
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