A lot of posters on social media today are expressing concern that the recently announced tariffs on goods (including Dice and Games) coming out of China will have an impact on the sale price of dice. Since I've got a bit of a sense of how this business works I thought I'd shed some light on it.

First up as a Canadian company this is actually good for us as our US based competition is about to have to pay a tax that we don't have to pay. We already pay a fraction of their shipping costs internationally and I'm fairly sure we now pay about the same to ship into the US. So the net is this is a win for us but how will it impact US companies and kickstarters. In short - it won't have a huge impact but they will certainly feel a pinch.

To understand the size of the pinch you need to understand the cost breakdown on a set of dice that are sold to a US consumer. Buying in the sorts of volume that even a small shop like ours does an eleven piece resin set is a few dollars from the factory. Simply put things get very cheap when you buy them 1,000 or more at a time. One of the factories we have talked to has a 30,000 set minimum order size to give you a sense of the sorts of volume the big players are moving. The store then needs to pay someone to pack the order and pay for shipping to the end consumer. Both the packing of the order and the shipment to the end consumer actually cost more then the dice themselves.* Because the tariff is only charged on base cost of the dice however a 25% tariff will only net out to a 5-10% price increase depending on how efficient the shop is running.

Now the question is will a small shop pass on a 5-10% cost increase to the end consumer or will they simply lower their margins and hope the tariffs are repealed quickly. My guess is that they will simply eat the cost and hope things are settled quickly. The reason is simply that competition with international resellers will force them to keep the end price competitive. Where I think there might be an impact is on dice kickstarters. If a large kickstarter has funded based on one expected cost structure and now faces a 5-10% cost increase they hadn't budgeted for that will at a minimum reduce their expected return. It likely won't be enough to push anyone over the edge but it does serve as a reminder to do your math ahead of time and insure you have a solid contingency in the budget just in case the world changes on you.

Finally some are speculating about wither this will bring dice manufacturing back to the US. Honestly I highly doubt it. Dice are a simple commodity product and labor makes up the vast majority of their manufactured cost. Making dice in a high wage environment just isn't economically feasible even with a 25% (or higher) tariff in play.

*This is why shops that ship direct from China are able to offer such incredibly low prices because their packing cost is much cheaper and the Chinese government subsidizes international shipping of small packages. We've never gone that route however as we can't find a partner who can deliver the quality we want.



Leave a comment

All blog comments are checked prior to publishing