Life is full of change. Some changes are welcome, and others, well, not so much. As we mature, we learn that some change is inevitable. Our kids grow up and leave the house, new neighbors can be less friendly than the previous neighbors, gasoline costs more today than it did last week, etc. Those changes cause small ripples in the fabric of our lives, and a bit of time usually irons them out without lasting impact.
In business — and seemingly especially in the MI business — we often have changes looming that may or may not have a measurable impact on our business lives. There was an old Greek guy named Heraclitus. He once famously said, right after finding out that the price of a flask of wine had gone up again, “The only constant in life is change.” Had Heraclitus run a lute and lute accessories store back in ancient Greece, he might instead have said, “The only constant in life is uncertainty.”
As I’m writing this month’s column, the specter of trade tariffs is dominating every news channel. For several months, the trade and tariff disputes between the U.S. and China have probably inspired some insomnia episodes among MI importers, as well as tension headaches among manufacturers who have to figure out pricing plans in the midst of widespread tariff uncertainties. Retailers are having to deal with weekly emails from their suppliers announcing the news that, due to tariffs, their costs are about to go up. The angst finally trickles down to the retail consumer, who raises an eyebrow when he/she notices his/her favorite bottle of cymbal cleaner is now 20-percent higher in price than it was this time last year.
Retailers not only have to deal with new pricing plans, they have to re-mark their instore product, update their websites, fix their pricing on eBay and Reverb (or Amazon), and contend with the MAP-violation emails that result from missing one link in the chain of pricing updates.
And all of this joy is the result of just one prong of uncertainty: the level and tenure of tariffs on Chinese goods.
If tariffs compose just one prong of uncertainty, thinking about the whole fork can be downright scary. And there is a lot to be uncertain about. If your lease has to be renegotiated in the near future, your landlord might decide to use that new lease to pad his/ her retirement account. How much more the internet will encroach on your walk-in traffic is another prong of uncertainty. And if you sell online, the uncertainties of how and when sales tax will have to be collected and remitted might remind you that your ulcer isn’t quite healed yet.
The list of uncertainties we deal with day in and day out can be a long one, but it doesn’t have to make our days dark and full of gloom. Bono once said, “Perspective is the cure for depression.” I’m going to suggest perspective is also the way to deal with the uncertainties of today’s MI retail environment.
First, let’s put tariffs into perspective. Yes, tariffs will cause some of your costs to go up, but the exact same thing is happening to every retailer who carries those same products. So, you are not at any more of a disadvantage in the marketplace than you were before tariffs kicked in. All retailers who stock that tariffed product will see their costs go up by the same percentage, so it’s not like tariffs will make your product line more expensive than some other retailer. Tariffs are a rising tide, and they float all boats equally.
Need to renew your lease pretty soon, and you’re concerned that your landlord is going to raise the rent? Consider this your notice to look for a place to buy. Yes, buying is a big commitment, but unless you’re planning to fold up your tent in five years, you’re already making big commitments all the time. Interest rates are still fairly low for commercial property, so go take a look and see what’s out there. If you can’t come up with a place to buy right now, then you’ll know you looked for options before renewing the lease, and you’ll feel better about signing it. If you need more time to set up a building purchase, ask for a shorter lease. That alone may prompt the landlord to leave your lease rate the same as before. Either way, you aren’t trapped and forced to do what you’ve been doing so far; you’re in control, and you can make changes that could put you in a much better place financially.
The whole sales tax thing is really nothing to worry about, either. If you’re a small online seller, chances are you’ll be exempt from collecting/remitting sales tax in most cases. If you’re a big online seller, you’ve got people you pay to stay on top of the sales tax thing; just have them keep you updated on what you need to know. If you sell on Reverb, just relax. So far it looks like Reverb will do most of the collecting/remitting for you, and at no extra charge to you, the seller. That’s kind of like having a free employee to handle your out-of-state sales tax.
We’ve all got some uncertainties that nag at our minds, and they can become overwhelming if left unchecked. So let’s boil life down to a few questions: Is there any real chance you won’t have a dry place to sleep tomorrow night? No? OK. Is there any real chance you’ll go involuntarily hungry this week? No? OK. How about this: Is there any real chance you’ll be kidnapped or shot on your way home this week? No? OK. Since all three answers (I hope) are ‘no,’ then you’re already way ahead of most of the world’s population. Just knowing those three answers, a huge part of the world would swap places with you right now. You’ve actually got it pretty good. If your health is in reasonably good condition, then you’ve really got it made.
Step back from the details of your daily world and take a look at your situation from the position of some distant third party. You’ve got food, housing and you’re relatively safe. Your health looks like it will hold up (maybe you could lay off the doughnuts and the mashed potatoes a bit, but still…). So, what real concerns do you have? Your business is not unique in the uncertainties it faces. Every MI retailer in America is dealing with the same uncertainties at one level or another.
And, if you’re feeling better about retail and life right now, here’s another tip to improve your life: If watching the news or scrolling through Facebook makes you angry, then stop watching the news, and change the pages you follow on Facebook. It’s OK to stop watching the news. If something you really need to know about happens, I guarantee someone will let you know about it.
So, set your uncertainties aside. As Heraclitus almost said, “The only constant in life is uncertainty.” There’s nothing you can do to avoid uncertainty, and every other retailer has the same concerns you have. You’re not alone, and your life is really pretty good. Go get a good night’s sleep, get up early tomorrow and get a fresh start on winning at MI retail.
Happy trails.