Billionaire made fortune on $50 chainsaws.

I remember the phone calls years ago. They would call every few weeks and they always had these super deals that they would throw in just to get you to buy something.

webfish said:

http://bloom.bg/2le5olL

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I wonder how this importer of Chinese tools is going to fare under the current presidential administration. Not intended to be any sort of political commentary.

Smidt seems to be a pretty savvy business person, but a big chunk of their profitability will disappear if high tariffs are imposed on Chinese imports, and a highly leveraged company might have problems meeting their debt payments under such a regime.

ED 3000 said:

I wonder how this importer of Chinese tools is going to fare under the current presidential administration. Not intended to be any sort of political commentary.

Smidt seems to be a pretty savvy business person, but a big chunk of their profitability will disappear if high tariffs are imposed on Chinese imports, and a highly leveraged company might have problems meeting their debt payments under such a regime.

Click to expand...

His competitor's costs also go up, assuming Congress and the president agree on a given trade policy.

Sure, there's some higher end saws and other tools at least assembled in the US, but folks buying $50 saws weren't considering US-made gear anyways.

It could actually be the mid-grade producers who are most affected, because their prices will be pushed closer to that of high-end, made-in-US brands, increasing the incentive to buy the best for those who can afford, or buy a lower quality for those with fixed budgets.

iamlucky13 said:

His competitor's costs also go up, assuming Congress and the president agree on a given trade policy.

Sure, there's some higher end saws and other tools at least assembled in the US, but folks buying $50 saws weren't considering US-made gear anyways.

It could actually be the mid-grade producers who are most affected, because their prices will be pushed closer to that of high-end, made-in-US brands, increasing the incentive to buy the best for those who can afford, or buy a lower quality for those with fixed budgets.

Click to expand...

Interesting, hadn't thought of it from that angle.

I've found that a bunch of the stuff at HF is the same as other brands elsewhere, their electric splitter is a good example. Where this is the case, HF seems to have the lowest price, so they either have the lowest profit margins, or are able to get superior pricing somehow. So, will the mid range sellers raise prices to keep their margins, or accept lower margins? If they try to keep the margins, then the higher end brands should pick up those buyers.

Complicated stuff, but in the end, the consumer ends up paying for the increases in any event.