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We want to
assure our Customers that we are still making models during this uncertain time.
We are not slowing down.
Currently the Tariff for Scale Models is 154% of
the factory invoice. The factory invoice is only a fraction of the total cost of
making our models and even smaller fraction of the Retail price. It's a lot, but
not the end of this world. 154%
is prohibitive to receiving our models, and we expect this rate to be reduced
when the US and China finally come to the table. This rediculously high rate
will do exactly that. We get it. We are willing to wait a few months for the
deal to be made as it's good for the future of our Country.
While many
other importing companies are letting their suppliers in China suffer and go out
of business, we have been working with 2, small, family run businesses that
build the models you love. It's not a big business, it's very small. We plan and
will continue to pay them to produce our models as they have done for the past
20 years for us. When the Tariffs come down, below 54%, we will ship any models
that are finished and things will go back to normal quickly.
We are also
looking into the possiblity of moving the final assembly process to Korea which
can reduce the Tariff hit. After all, many of the parts of our models are
produced in Korea, Germany and the US. The factory in China is painting and
lettering, assembly, testing and packing, the finished product. While we really
like our current crews, we also are able to shift production to Korea if needed,
where we produced models from 1980s to 2012. Time will tell.
We have already baked in slightly higher prices assuming the initial 20% Tariff.
If the settled rate is similar then there will be no further adjustments. If we
are at 54% in Tariffs, it would add about $30 - $50 to each Diesel and $20 to
each car. Not a huge amount.
Rest Assured, we are planning to continue
production for the forseable future.
We thank you for your continued support
and hope you don't worry too much about this, as this is Your Hobby, the place
where you can relax and enjoy your life.
Thanks for Listening,
Scott Mann - CEO Sunset Models Inc. / Golden Gate Depot Co. Ltd. / Electric
Railroad
EMAIL
sdmann@3rdrail.com
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