Sad news. MBL has filed for insolvency.

[Rob181]

Tariffs increases (if they even ever take place, which I doubt) on goods of that kind from Europe would not be anything significant that can potentially bankrupt the company. Tariffs are imposed on the declared, or wholesale value of goods imported, thus the company can always lower the wholesale price in proportion, and come out more or less even....

1. Tariffs are already in place.
2. Tariffs destroy any confidence in the product of the receiving country & dry up discretionary spending.
3. Lower wholesale price equals lower returns for the manufacturer - just - how exactly does that equal "come out more or less even"...

 

[AudioLibertarian]

1. Tariffs are already in place.
2. Tariffs destroy any confidence in the product of the receiving country & dry up discretionary spending.
3. Lower wholesale price equals lower returns for the manufacturer - just - how exactly does that equal "come out more or less even"...

By lowering I did not mean to lower it by half, variations on those tariffs are within few percent on goods like audio gear from Europe. I thought Trump gave the EU a pause till July 7 or so. Even then, I would need to look into the details of those afterwards, but doubt it will be anything catastrophic. If there will be a true high rise in the import costs on audio gear from Europe or Japan in the near future, I ll post it here and will eat a proverbial crow

 

[Rob181]

By lowering I did not mean to lower it by half, variations on those tariffs are within few percent on goods like audio gear from Europe. I thought Trump gave the EU a pause till July 7 or so. Even then, I would need to look into the details of those afterwards, but doubt it will be anything catastrophic. If there will be a true high rise in the import costs on audio gear from Europe or Japan in the near future, I ll post it here and will eat a proverbial crow

EU
"The United States has implemented a 10% baseline tariff on most goods imported from the EU, with some goods facing higher reciprocal tariffs."
"a 20% reciprocal tariff on EU goods is in place, and a 25% tariff is applied to automobiles, light trucks, and certain automotive parts,"

Japan
"Japan is being charged a 25% levy on its auto, steel and aluminum exports to the U.S. The key U.S. ally is also subject to the 10% baseline tariffs imposed by Trump on most trade partners. Japanese goods also face "reciprocal" tariffs of 24% which have been temporarily suspended."

 

[AudioLibertarian]

So the rates on audio goods have gone up from 3-4 % to 10 %. Big whoop! You consider a 6 % rate increase catastrophic?! At the prices that customers are being charged in the high end industry?!!! Gimme a break! Most of it can be easily absorbed by a distributor who knows what he is doing, without affecting the final US retail price, which apriori has a 20% cushion, as when distributors & Euro companies claim that their USA prices are the same as in Europe, that is a total BS , as the European retail prices have 19-21% VAT included, which most US distributors conveniently never acknowledge. So I don't see any "catastrophic" consequences from my view. Also, the tariffs on audio goods from the UK have remained the same. Thus , to paraphrase an infamous Soup-Nazi : "NO Crow for you"

 

[Rob181]

So the rates on audio goods have gone up from 3-4 % to 10 %. Big whoop! You consider a 6 % rate increase catastrophic?! At the prices that customers are being charged in the high end industry?!!! Gimme a break! Most of it can be easily absorbed by a distributor who knows what he is doing, without affecting the final US retail price, which apriori has a 20% cushion, as when distributors & Euro companies claim that their USA prices are the same as in Europe, that is a total BS , as the European retail prices have 19-21% VAT included, which most US distributors conveniently never acknowledge. So I don't see any "catastrophic" consequences from my view. Also, the tariffs on audio goods from the UK have remained the same. Thus , to paraphrase an infamous Soup-Nazi : "NO Crow for you

Tell the world you know nothing about economics without telling the world you know nothing about economics.

 

[Porsche]

oh please, whatever is going on it starts on the top, this had to be going on for awhile and they where hoping for things to change maybe with all the shows going on and hoping the next big mega sell will come from them etc. they have payrolls, they can adjust payrolls especially with the top tier management guys to help ease the bleeding, doubtful, they clearly did not scale down the shows and the large rooms etc, this can help, does anyone know if all MBL is made in Germany and that's the only tariffs that effect them? I hope they pull thru but I bet its worse than you think

 

[Elliot G.]

oh please, whatever is going on it starts on the top, this had to be going on for awhile and they where hoping for things to change maybe with all the shows going on and hoping the next big mega sell will come from them etc. they have payrolls, they can adjust payrolls especially with the top tier management guys to help ease the bleeding, doubtful, they clearly did not scale down the shows and the large rooms etc, this can help, does anyone know if all MBL is made in Germany and that's the only tariffs that effect them? I hope they pull thru but I bet its worse than you think

MBL is a German company and there are tarriffs on imports of audio from Germany. I just paid today my first tarrifs on an order that arrived over the weekend. We , meaning my company ate them and will not pass them forward. I did the same thing on tariffs on an a English import last week.
I personally do not like to nickel and dime any customers. I live by my deals and my word.

 

[Porsche]

MBL is a German company and there are tarriffs on imports of audio from Germany. I just paid today my first tarrifs on an order that arrived over the weekend. We , meaning my company ate them and will not pass them forward. I did the same thing on tariffs on an a English import last week.
I personally do not like to nickel and dime any customers. I live by my deals and my word.

im aware they are German, doesn't mean all the products/parts are made in Germany, they may be eating more than one tariff, maybe not, just a question. if you are eating the tariff cost at the moment than that simply means you are taking it our of your profit in and that's awesome, that's kinda my point with MBL, what did the management do to help, did they cut there pay to help, the shows they did are huge, another expensive that could be cut, etc etc, there's more to this than we know because it wasn't all great on Monday and collapse on Friday, this has been in the making

 

[TooCool4]

Call me cynical, not saying it’s true with every single distributor / importer but if they can absorb a tariff hike of 10+%, they have been jacking up the price too much in the first place.

An example of what I am saying is, when the UK had a Spectral distributor / importer the price was £ for $, which I guess it’s fair enough everyones got to make a living / profit.

So when the DMC 30SS was $15K in the US it was £15K in the UK. So at this point of typing $15K is £11K so overall a profit of £4K $5.5K and we all know they did not buy them from Spectral at $15K as the dealer price would be a lot lower.

Now look at the price from the European distributor / importer. Now a Spectral DMC 30SV S2 is $24K US but in Europe it’s €36900, as I type now that is $42879. That is a profit along the line of almost $19000 €16000, yes at the price markup I am sure they can afford to eat the tariff to keep the clients.

 

[Synaxis]

Call me cynical, not saying it’s true with every single distributor / importer but if they can absorb a tariff hike of 10+%, they have been jacking up the price too much in the first place.

How much do you feel is an acceptable net profit % that you feel they should be allowed to make? Net - not gross.

 

[Mike Lavigne]

How much do you feel is an acceptable net profit % that you feel they should be allowed to make? Net - not gross.

in the auto dealership business (high dollar sales, high cost of sales, low gross margins, high expenses) a good job was 6% net to sales. in the software business or the oil business (low dollar sales amounts, high margins, low expenses/low cost of sales) it might be 20-25% net to sales.

for hifi at minimum enough to justify your investment and time plus reinvest in the business to keep it healthy.

really an unanswerable question as in the hifi business as there are huge swings of good and bad times so there is no such thing as a predictable flow of opportunity. you have to bank enough good time margin to survive the lean times.

and net profit might not fuel your expenses if you are not properly capitalized. you can be profitable but insolvent. manufacturers had very strict capitalization requirements for auto dealers, as well as real estate requirements to be a dealer candidate. but that business is very predictable. the hifi business tends to favor small footprint low fixed expense players so they can weather the market swings.

 

[TooCool4]

Synaxis, i don’t know can’t say, but almost double looks like daylight robbery to me.

 

[Elliot G.]

im aware they are German, doesn't mean all the products/parts are made in Germany, they may be eating more than one tariff, maybe not, just a question. if you are eating the tariff cost at the moment than that simply means you are taking it our of your profit in and that's awesome, that's kinda my point with MBL, what did the management do to help, did they cut there pay to help, the shows they did are huge, another expensive that could be cut, etc etc, there's more to this than we know because it wasn't all great on Monday and collapse on Friday, this has been in the making

of course this didn't just happen. These things happen over time and I doubt the Tarriff's really had any effect. I was just saying as a distributor for one line there are a lot of costs that have changed and they may effect the future however for the present I want to keep prices constant if I can.

 

[Elliot G.]

in the auto dealership business (high dollar sales, high cost of sales, low gross margins, high expenses) a good job was 6% net to sales. in the software business or the oil business (low dollar sales amounts, high margins, low expenses/low cost of sales) it might be 20-25% net to sales.

for hifi at minimum enough to justify your investment and time plus reinvest in the business to keep it healthy.

really an unanswerable question as in the hifi business as there are huge swings of good and bad times so there is no such thing as a predictable flow of opportunity. you have to bank enough good time margin to survive the lean times.

and net profit might not fuel your expenses if you are not properly capitalized. you can be profitable but insolvent. manufacturers had very strict capitalization requirements for auto dealers, as well as real estate requirements to be a dealer candidate. but that business is very predictable. the hifi business tends to favor small footprint low fixed expense players so they can weather the market swings.

your car dealership probably did gross more than half the world wide total of high end audio does in a year
Audio is a tiny tiny Industry , they are almost all very small businesses.

 

[Elliot G.]

Call me cynical, not saying it’s true with every single distributor / importer but if they can absorb a tariff hike of 10+%, they have been jacking up the price too much in the first place.

An example of what I am saying is, when the UK had a Spectral distributor / importer the price was £ for $, which I guess it’s fair enough everyones got to make a living / profit.

So when the DMC 30SS was $15K in the US it was £15K in the UK. So at this point of typing $15K is £11K so overall a profit of £4K $5.5K and we all know they did not buy them from Spectral at $15K as the dealer price would be a lot lower.

Now look at the price from the European distributor / importer. Now a Spectral DMC 30SV S2 is $24K US but in Europe it’s €36900, as I type now that is $42879. That is a profit along the line of almost $19000 €16000, yes at the price markup I am sure they can afford to eat the tariff to keep the clients.

I understand your point but I am not sure your numbers work.
Here in the US I am selling the products so they are about the same price as everywhere else in the world. Maybe some places make more than I , I don't concern myself with that. I don't want to raise prices, I want to respect my clients and to be as fair as we can.
The reverse may not work, meaning bring American goods into Europe may be very different as far as tariffs, currency conversion and other costs. From what I see the Tariff going into the UK for example is 20 percent.
I do agree however that the price you wrote does seem high on that specific product.

 

[Porsche]

bottom line, sometimes dealers, reps and distributors and manufactures need to make adjustments to make things work, sad thing is its usually everyman for themselves instead of a group effort

 

[Synaxis]

Synaxis, i don’t know can’t say, but almost double looks like daylight robbery to me.

You are certainly entitled to your opinion, but without having a clue about operating expenses, marketing expenses, the low volume of sales, the cost of. holding inventory, taxes, rent, and the fact here in the US they usually have to PRE-PAY taxes on sales not yet made, payroll, payroll taxes, etc. you chose an arbitrary uninformed number and call it highway robbery.

Doesn't seem like the way to make an informed assessment/declaration of highway robbery to me.

 

[Synaxis]

the oil business (low dollar sales amounts, high margins, low expenses/low cost of sales) it might be 20-25% net to sales.

You think oil is a low expense / high margin business? Interesting.

 

[TooCool4]

Elliot G, like I said I am sure not every importer / distributor are sharks and most I guess are reasonable, but the ones that import Spectral into Europe are sharks.

My numbers do work as far as I know, but not knowing the actual price they get them from Spectral.

Whatever price Spectral sells them to the US distributor for will be the same price they sell them to the European distributor.

Here I am only guessing, in the US DMC 30SV S2 is $24K so at a guess both the US and EU distributor would get each unit for say $8k - $10K. With everyone taking their cut, it get’s to the US retailers for $24K and everyone makes a profit. So how does it get to the European retailers for over $42K, someone is laughing all the way to the bank and it’s not the customer.

 

[TooCool4]

Synaxis, yes, I am. If the UK importer / distributor can get them from US to UK at good prices, why did the price jump up after we lose the UK importer / distributor. Europe is only next door and they work to the same rules as we do.

In the UK we are used to paying silly prices, but the European importer / distributor prices are just daylight robbery.