Waiting for the Dust to Settle

Back in February I wrote a blog post explaining why we weren't going to make it to Transworld. You can read that here.

I wanted to expand a little on what the plans for IgorBox are in the face of all the uncertainty in the United States manufacturing and trade climate. Like a lot of small electronics businesses, our supply chain reaches overseas, and the recent tariff changes are squeezing us in ways we have to plan around.

To start, I want to give a small break down of how the tariffs affect us and our products.

Firstly, the manufacture and assembly of our PCBs makes up a large share of the underlying cost of our devices. With the current tariff rates, the effective import cost of a finished PCB can be more than double what we pay our manufacturer for it. Our margins aren't large enough to absorb that, so without changes we'd have to raise prices in ways we're not comfortable with.

Based on this, it's clear that we need to revisit where our manufacturing is done if tariffs stay where they are. That's a real challenge for us — we recently finished tooling and stocking up at our existing manufacturing partner, and shifting takes time and money. We've paused new production while we evaluate alternative partners and run samples and test builds with them.

The second issue is the components themselves. A lot of the parts we use are subject to the same tariffs no matter where the boards are assembled. To reduce that exposure, we've launched a full review of our schematics to identify alternative parts for the most expensive items where we can do so without compromising quality.

With all this said, I am sure we are not the only electronics company in this situation and I know that many of our friends, colleagues, partners, and competitors also face this same dilemma. I'm also positive that we are all looking at similar options and avenues to ease the retail costs while delivering quality products. I know that paying more for the same thing is not something anyone is interested in doing, and I certainly don't want to raise prices either.

Beyond all of this work we are doing internally to mitigate cost spikes to our customers caused by these tariffs, we are also hopeful that deals will be made and the overall tariff burden from China will go down. We just need the dust to settle out to see where we need to further invest in the short and mid term. Our goal is to provide the best value to our customers, and we will continue to work towards this.