As an interior designer, workroom or anyone else in the trade, have you recently received a notice from your fabric sources about needing to raise the prices of goods due to the new tariffs on imported textiles? What was your immediate reaction? Did your mind go straight to how your bottom line would be affected? Did you worry how to charge that much more to your clients?
On September 26th, I received the email from Lee Silberman CEO of the Robert Allen Duralee group:
As you may have seen in the news, beginning on Monday, September 24, 2018, the US Trade Representative’s office imposed a 10% tariff on virtually all Chinese textiles coming into the US. If no agreement between the US and China is reached by January 1, it has been stated by our government that the tariff will go up to 25%. As a result, effective September 24, 2018, The Robert Allen Duralee Group has raised prices on those items impacted by this tariff…
It is important to note that our price adjustments are dollar for dollar the same amount as the actual cost of the government-imposed tariff to us. It is possible in the future that some drapery hardware from Paris Texas Hardware and The Finial Company may be affected by the tariff as well.
(sigh….) And so it starts. Who gets the ultimate tax increase? Our customers do, most likely. Change is pain but it can be other things as well. It could be the beginning of a do-over stating that, yes, we have given the Chinese the opportunity and the technology and the responsibility and American jobs and billions of dollars to supply us with manufactured goods, but it has backfired on us. In many cases, they have abused the opportunity by stealing technology that we haven’t given them, ignored our patent rights and bullied us with it. We have taken employment for Americans and given the jobs to Chinese. In the meantime, we have been losing the training and knowledge our people used to have to manufacture textiles as well as facilities and machinery to keep up. Maybe we need to figure out how to get it back.
Summer interior jobs can slow down in this season of sea, sand and vacations. But it can also be the best time for many home improvements to get done. Homeowners typically don’t think about calling on their designer when windows need replacing, plumbing needs repair or appliances have become worn out. Allying yourself with contractors whom you have vetted for insurance, references and credentials will strengthen your client relationships in ways that will pay off for years. Knowing the sources of as many products as possible as well as quality and price could put you in a different league in their eyes. How is this done? Put your organizer’s hat on and follow these steps:
As professional designers and decorators, no one is impervious to the client you have taken on shopping on their own, checking the validity of your prices, coming up with new products etc. etc. Here are some guidelines you may consider when this dilemma arises.
1 – First really zeroing in on the clients you are about to deal with is crucial. Using confidence and discernment, ask the right questions in the first appointment. This goes a long way in seeing whether they are your ideal client.
Many creative types that pursue a career in designing or art manage to keep the mathematical area of the world at arms length – until it inserts itself into their lives in order to calculate pretty much anything or run a business without making all the mistakes first.
In the last post we described the limitations of what a gross profit, gross profit margin and net sales are. But we also explained our businesses have more “bags” that hold more figures that need to be factored into a financial report.
In business, we are all about not just doing a great job for our clients and building our reputation, but at the end of the day, we want to see profit also.
There are so many ways to justify a personal expenditure of a new suit, new bag or briefcase when you are in the design field. After all appearances mean so much don’t they? Our work is judged by how we look and come across, isn’t it?? Especially when we “know” we made profits on our last couple of jobs we should be able to allow for a splurge, right? Don’t we need to celebrate a new contract with a delicious lunch after an appointment?? Isn’t that what return on investment is? Or was that petty cash or owner’s capital – a tax deduction? Whatever!!