Will Brexit affect companies that import lots like Axminster

UKworkshop.co.uk

Help Support UKworkshop.co.uk:

This site may earn a commission from merchant affiliate links, including eBay, Amazon, and others.

Sawdust=manglitter

Established Member
Joined
14 Feb 2016
Messages
863
Reaction score
653
Location
Nr Cross Hands, South Wales
Don't claim to be an expert or anything, but was wondering how much leaving the EU is going to affect the companies, and their prices, that import a lot of their tools etc? Like Brimarc for example, how much would they rely on importing products from the continent?
 
it will affect all imports through the devaluation of sterling. you will see this starting in the coming days and weeks. Fuel willprobably be one of the first.
 
Yeah, I've already filled up my car in anticipation of that :?

I was just wondering what kind of restrictions etc there may be for the companies that import directly from the continent?

The weekends project may be to start digging ready to put in a fallout shelter!! :D
 
there wont be restrictions for a while yet. just price differences because of the currency.
the longer term, who knows...
 
In the short term, ie the the next few years, it will depend on what deals they've negotiated with their suppliers eg whether future deliveries of products manufactured overseas are priced in sterling/US dollars/Chinese Yuan.
As the pound has dropped imported goods will be more expensive (or less profitable for the retailer if they hold their price), even sooner, the expected rises in fuel cost will add to delivery costs of everything.

In the long term; No one knows.

If you're thinking of buying a high value imported item, it's probably wise to get on with it before the price goes up.

Maybe this was a question to know the answer to before voting.
 
I voted remain! I didn't delve too deep into the reality of the conequences of us leaving as I was trying to be positive, but I was so shocked that so many people have voted for us to leave, many just didn't think it through!?

And yes, that's more what I was thinking, I haven't saved enough yet but I had a large purchase in mind in the next year or two and was wondering whether it's worth thinking about it sooner rather than later #-o
 
Sawdust=manglitter":1wak85dr said:
I had a large purchase in mind in the next year or two and was wondering whether it's worth thinking about it sooner rather than later
I share your pain on that.

The problem is that we don't know if companies will react quickly and raise prices soon or wait until things settle down until the political turmoil slows and only raise prices as they have to import new stock at higher prices.
Difficult times for everyone.
 
I'm thinking of drowning my sorrows about the fact that over half the country voted for xenophobia, isolationism. racism and a recession by buying a few festool products before prices soar.
 
Paddy Roxburgh":2v0z2jvv said:
festool products before prices soar.
The price for Festool and other German products won't be as greatly effected as products from outside the Eurozone, for now, because we're damaging the Euro too.
 
If you've got your eye on anything from Lie Nielsen or Veritas then move quickly before current retailer stocks are sold out, because when retailers come to replace those stocks the falling value of the pound means there's sure to be a price increase for the woodworker.
 
' voted for xenophobia, isolationism. racism and a recession '

:shock: What a crock, we voted out because of 40 years of being told what to do, fishing industry gone, heavy industry gone, steel industry going. When free movement was allowed estimates were 15K coming to Britain the real figure was 300k. It had nothing to do with xenophobia or racism and we are already in a recession. :D
 
This is a complicated issue and it's probably not helpful to simplify it to a headline. My own thoughts (for what they're worth):

1. Companies with significant import or export businesses hedge currencies, and the way accounts are kept varies widely (I mean what they do with the dosh rather than how they write it down). They will hold significant foreign currency accounts, and move funds into and out of Sterling when the exchange rate and other issues like taxes and transaction costs and specific deals make it favourable or necessary. They usually take a medium term view, and buy currency ahead of time at the best rate, and so on. Outside the organisation's "treasury" department it's very hard to know what their situation is.

2. Companies that do a lot of business with suppliers are able to exert leverage. Either the supplier drops their price when the Forex rate makes them too expensive, or they don't make the sale. Obviously there is limited leeway, but prices are rarely inflexible. It cuts both ways, obviously.

This entails forecasting. If you look at the Forex graph for Sterling:USD the Pound has been on a slide since the middle of last year. The vote has triggered a jump, true, but it's not that much away from the trend line. So it's reasonable to expect the present rate has been expected at some time soon, if not at this exact moment.

The exchange rate is affected by many things, not least a circular mechanism along the lines of, "I can see he's buying Rupees, so I should too." Other significant things are the relative performance of the two economies in play, the return on their bond issues, etc.

It is likely the euro will tank in the late summer when Greek debt and Grexit (from the euro) come up again. The eurozone is 'twixt the Devil and the deep blue' on this - Greece can't service its present debt, and the 'structural reforms' required by Germany and the ECB have trashed its economy so there's little hope of it being able to do so in the near future. Grexit essentially means default, but staying in probably means default too. Either way investors (and people with large euro holdings) get a crew cut. And so the euro will tank...

China? In general, Chinese manufactured goods have been getting more expensive, as their labour costs have risen dramatically in recent years (they weren't significant before; now they are). Chinese products ARE becoming more expensive. The morticer I bought five years ago from Axminster now costs 28% more (approx.). That's WAY more than inflation increase, and it's common across all importers, so Axminster aren't being greedy.

I have no doubt that Axminster will be committing to volume purchases, and may even use a bonded warehouse somewhere, with a view to calling off stock as & when. I'm sure they operate so as to be as Forex-efficient as possible. It's impossible to say right now if prices will be better or worse in a few months' time, nor which direction of travel they'll have long term. There's no evidence that Forex changes are reflected in their pricing, except for two things: they do build forex risk into their annual "catalogue" pricing (or they did - no paper catalogue now means that may no longer be the case), and they have always responded competitively when forex makes lower prices possible. I've not ever seen them saying that a forex change has forced them to suddenly increase prices, although other suppliers have. But then I don't spend all day every day looking at their prices!

Bear in mind too that they have a vested interest in you getting a decent deal: you do well; you buy more; you might recommend them too. Nobody ever wants to kill off a good customer (the eurozone probably worries about this more than most, presently).

. . .

I often travel to a bottom corner of Somerset. It's about 120 miles round-trip, so I often also need petrol. My wife fills up at Asda during the weekly shop, but it's in the wrong direction. I can divert past it if I want, but that adds about 15 miles, and corresponding lost time. I drive past several filling stations. The value of not diverting usually far outweighs the two or three pence per litre saving.

I mention the fuel because it's similar to making a big tool or equipment purchase - if I could save by waiting, that's got to be by a significant amount, otherwise the value of having the whatever is early, and being able to get value from using it wins. And that does vary. A track saw was a big purchase for me. I bought in January, IIRC, having discovered it was going up in price significantly in the coming year. I probably saved 5-10% overall, but against that the funds became tied up and inflexible, and I had the track saw (and had to justify it to the Domestic Controller!) long before I could put it to productive use. That didn't go down well!

If it's going to make your life better, economically better, I mean, then go for it. I wouldn't borrow to do it, for all sorts of reasons: additional cost, funds tied up, inflexibility (if it's HP you don't own it, etc.). Only you know what's best for your business at the end of the day. But honestly, there are so many other variables in play than just forex, that I wouldn't give it much thought.

For what it's worth, my expectation is that Sterling will rise against the euro long-term and stay there, and/or the euro will finally collapse. Timescale? No idea right now. But it's unstable as things are and there has to be a big 'adjustment' at some point.

Will that really help us? Probably not, actually. A high pound favours importers, and importing is easy compared to exporting. A low pound for a while would be a good thing, as it would help exporters, which in turn means more jobs and apprenticeships in high-tech industries, etc. That's got to be a good thing. We could learn a great deal from the German "Mittelstand" manufacturers, who have prospered despite the high Mark and euro. But their success has a lot more to it than just hedging forex.

And I write that as someone wholly in favour of Brexit, too.

E.
 
Thanks guys. Maybe see how thing pan out over the next week or two before the credit card takes a hit!

How about the European hardwoods... aswell as being affected by exchange rates I assume importing these will be drastically affected?
 
Sawdust=manglitter":15xln1al said:
How about the European hardwoods... aswell as being affected by exchange rates I assume importing these will be drastically affected?
As above; anything from the Eurozone will be more lightly hit than American and tropical woods. The pound slid badly against S America and African currencies yesterday, so they'll be more expensive when stocks are renewed.
 
As a very small importer from Europe I'm worried but have no real answers. I just know everything is going to be unstable for a long time. I make a range of vetinary operating room equipment for a local vetinary wholesaler. Most of it makes good money but the main reason I get any of this work is the top of the range operating table which sells in small numbers but around which the rest of the stuff I make is designed. This table uses medical grade castors from Germany, hydraulics from Holland and gas struts from Norway. At the moment the drop in the value of the pound has made the small profit I make on this item even smaller. I can't put the price up as it is already much more expensive than the other ones my customer sells which he imports from China. I can't not make it as I make most of my living from the ancillary stuff which sells on the back of it. No one in the UK makes the bits I import and if they did it would mean having to go through the whole design process again if there was the slightest difference compared to the parts I am using now. I'm just going to have to tighten my belt, accept a smaller income and hope that things settle down soon but I'm not optimistic.
 
Paddy Roxburgh":1dnqqa30 said:
over half the country voted for xenophobia, isolationism. racism and a recession.


Stay in the EU or leave the EU was on my ballot paper. I didn't see any other options. :roll:




Keep on saving and keep on buying, one thing's for sure business' will keep on selling.
 
Sawdust=manglitter":103qo3b1 said:
Thanks guys. Maybe see how thing pan out over the next week or two before the credit card takes a hit!

How about the European hardwoods... aswell as being affected by exchange rates I assume importing these will be drastically affected?
It'll be affected by however the exchange rate changes between the two currencies (in the short term). In the long term things might change based on the trade deals that the UK (eventually) manages to negotiate with other trading blocks (i.e. if there are any punitive charges or costs that might add a premium to prices).

Looking at eBay buys from US sellers, those prices have obviously gone up immediately because the purchase is in pounds and converted at today's rate. It could of course go back down tomorrow.

It's possible things will just settle down to pretty much back where they were in time - mostly because you won't actually get any of the things the Leave campaign insinuated (the £350m/week figure has already disappeared, and Dan Hannan (pro-Leave MEP) has already commented of their immigration claims "...never said there is going to be some radical decline, that we're going to shut the door"). On the latter, they couldn't anyway, as they'd never get a trade deal with the EU.

So, it's probable that we'll end up with a similar (or likely slightly worse) trade deal with the EU, still free movement of people, and still have to pay for said deal (t wouldn't be in either party's interest to have really punitive charges - but we'll certainly be the weaker party in the negotiations). The actual changes will be that we won't get any say in EU rules, and that we've handed unprecedented power to reshape UK laws to a cabal of economically far right wing Tories (who, let's face it, don't exactly have a history of favouring the "common man"). In short - people voted to reject a powerful elite in the EU who they felt didn't care about them, by handing over control to a powerful elite in the UK who don't care about them.

The irony is that one of the demographics that voted strongly for Leave (lower educated working class) will likely be the ones hit hardest by ideologically right wing attacks on the NHS, public services, and worker's rights (now that they can change all that pesky stuff right wingers hate, such as the European Working Time Directive).
 
n0legs":2kz0rk0s said:
Paddy Roxburgh":2kz0rk0s said:
over half the country voted for xenophobia, isolationism. racism and a recession.


Stay in the EU or leave the EU was on my ballot paper. I didn't see any other options. :roll:
It was in the small print on the back :wink:
 
Back
Top