With tariffs as predictable as meteorology, now is not a good time to be trying to forecast what’s going to happen over the next 12-18 months.

Like meteorology, the only thing reliably predictable is even more uncertainty ahead.

That doesn’t make for bell curve graphics when it comes to predicting revenues. It’s nigh on to impossible if you’re trying to determine margins.

Companies are frantically trying to right-size staffing, cut unnecessary expenses, reduce inventories, clear out slow-moving SKUs and lay in raw goods should the uncertainty disrupt a supply chain that’s still not fully-recovered from COVID.

Some outdoor companies have quietly eliminated “down-line” products. Those are the products you normally see in blister packs hanging in big box retailers. The products that may carry “limited” warranties or come packed with value-added additional products.

The reasons for the elimination is simple: products without “Made in the USA” labeling are candidates for tariffs that range from minor to major. The administration may be unpredictable in their application, but they’re not reluctant to use tariffs to compel American companies to bring manufacturing home or to price consumers out of their addiction to “cheap imported goods.” Cheap is the primary motivation for many of those products.

Down-line elimination, however, has major impacts on profitability. Offshore goods often have better profit margins than the more expensive-to-make American made up-lines.

That profitability impact is something that directly impacts manufacturers and retailers. It’s especially impactful for big-box stores. They know their customers at a granular level. And those customers in most instances aren’t looking for American prestige; they’re shopping price.

More than one outdoor manufacturer has approached big boxes customers with news they’re discontinuing their cheaper lines.

And they’re learning a hard lesson. The big boxes aren’t blithely agreeing to carry the higher-priced products, even when the higher prices are only slightly higher.

Instead, they’re canceling orders. Big orders.The kind that have major impact on annual sales numbers.

Big boxes don’t make piddling orders on proven product. They make big buys.

More than one company that has made the philosophical decision to drop cheaper products find “their spots” reallocated to companies still bringing in cheaper goods. Those companies are finding the big boxes are forcing them to eat the tariff costs.

Walmart, Target, Macys, and Kohl’s are only a few of the major retailers that have cancelled billions of dollars in orders. The reasons range from “inventory balancing” to lagging sales.

Woodland Hills, California’s Picnic Time makes exactly what its name implies: baskets, coolers and folding chairs for picnics, among other products ranging from Oniva outdoor gear to Toscana table goods and Legacy barware. Their major customers include Target and Williams-Sonoma.

It’s no picnic for Picnic Time right now. According to their corporate officers, sales are down“as much as 40% this summer.” And they cite consumer and retailer uncertainty about pricing as a major reason. They also attribute that uncertainty to on-again/off-again tariffs.

Roughly 80% of Picnic Time products are made in China; the rest in India and Vietnam. And there’s the problem they, and other offshore manufacturers are facing.

Picnic Time couldn’t tell some retailers exactly what prices would be this year- after raising prices an average of 11-14% for this summer selling season. Not conducive to confident stocking.

“Shoppers,” their CEO explains, “are very price sensitive.” Smart ones grabbed their picnic supplies before price increases. Others, the "nervous consumers” are playing the waiting game.

Consequently, Picnic Time faces the virtual certainty of rising costs. That’s evidenced by tariff costs already over $1 million for this year, triple the same time last year. That’s now coupled with sales uncertainty. Consequently, there’s a hiring freeze in place to try and fix costs wherever possible.

They are not alone. Companies whose primary products are imported are all riding in the same boats. They’re not sure what the landed costs of their goods on those boats will eventually be.

We don’t know either, but we’ll keep you posted.

— Jim Shepherd