Bulk Chemical Tariffs
When purchasing anything from a chemical distributor, it is expected that the more you order will lower the price per unit.
For example, if you buy 1 apple, you might pay 50c. If you buy 2, you would pay $1. If you buy 2000 from an orchard, you would hope to negotiate a price of less than $1000, as due to economies of scale you would expect a better deal.
This is exactly how it should work in the chemical industry, but unfortunately another factor comes into play – tariffs and tariffs are an important factor when working with a chemical distributor.
Tariffs are all around
An import tariff is the most common type of tariff, and is used by a governing body to protect the interests of local businesses. For example, an import tariff may be applied to goods from China when they are imported into the US, in order to help minimize the use of these imports and maximize the use of a local chemical distributor.
Tariffs can also work within countries (even between states).
In earlier times, tariffs became a necessity to ensure that the country was able to continue to run in a financially effective manner. While this is still partially the case, the opening up of the global economy has pushed the matter of tariffs further into the spotlight, and has had a strong knock-on effect on consumers.
Any product that is now produced including components from a foreign country may cost more to the consumer, due to the effects of import tariffs on the manufacturer.
Unfortunately, the more of a product that is imported, the higher the cost of the tariff.
The Effect on Bulk Chemical Prices
In some cases, chemical distributor products are imported. While the tariffs involved may not have a major effect on the pricing of the compounds that are sold on, when it comes to bulk orders, these tariffs will have a great effect on the price.
It won’t make the product more expensive to buy in bulk than in smaller amounts, but the level of reduction possible is limited due to the cost of manufacture. Where a 25% discount may have been possible previously, if the company is faced with a 20% import tariff, a 25% discount may sell the product being sold at a loss.
Tariffs come into place and are modified and changed all the time, depending on a vast array of factors. Wherever discounts are available, you can be sure that import tariffs have already been taken into account, and you are being offered the best price possible at that time. We at RightPath Industries do our best to stay ahead of the tariff dilemma and work with our suppliers to offer you not only best in class pricing, but pricing that that rarely fluctuates.