“We had a fair amount,” Hen said, referring to the ingredients. “It gave us more time to know that we could manufacture and sell a lot of things without customs costs.”
Hen said it was an advantage of his company’s workflow, not a customs strategy.
But they knew that the leeway would not last forever. Finally, it was time for Heritage Steel to order more ingredients. That first tariff bill is around $75,000, and Hen expects it to be more than doubled next.
Who will pay?
In the case of Heritage Steel, there was no doubt that the prices would need to be raised due to customs costs. The question was how high they had to go?
“We are delighted to be a provider of very high quality cookware, but it’s more affordable than some of the others on the market,” Henn said. “We want to continue to offer the best possible price given the constraints.”
As of Friday, the company had increased prices by around 15% on all products. Heritage Steel explains the increase in announcements on its website, calling the adjustment “very modest” considering the price of the company’s input material at least 50%.
“Obviously, we can’t have a full impact on these rising costs,” Henn said.
He expects these changes to have a negative impact on the company’s profit margins, but for now it is unclear. Henn believes that Heritage Steel is more flexible than many of its competitors, as it imports only raw materials and is manufactured in the US. Therefore, we hope that the disruption of the entire market will be good for the company.
“They may have to do something close to a 50% price increase,” he said of their competitors.
On the other hand, with Heritage Steel, the price of parts only increases by 50%, and is not a complete product. Henn said it’s all about finding sweet spots. It’s a substantial amount of money that charges customers to compensate for new costs while still being the market price leader.
