A common debate among the editors and reporters in our company surrounds how to cover on-again, off-again, delayed-again, on-again, really-on-this-time, ok-maybe-not-as-harsh-as-before, tariff policies...in a meaningful way. More importantly, how can we do it so business leaders can actually use such information to take meaningful action (or non-action)?
My tactic has been to generally ignore it…well, come to think of it, ignore is not the correct characterization. I have been paying attention but pushing it aside until something concrete (without backpedaling) actually happens. Many security integration business owners were doing something similar.
Manufacturers and distributors in our industry have no such luxury. And just like the supply chain crisis before it, new price increases are flowing downward in the channel, reaching integrators and, unfortunately, customers.
“The challenge with the tariffs is that it changes every day,” admitted Nico Delvaux, ASSA ABLOY CEO, during an April 23 earnings call.
Recently, I have begun receiving email notifications about pending price increases. It doesn’t matter that the tariffs – on goods from China for sure, but also from the EU, UK, Canada and more – change by the day or even hour. At this point, companies need to act.
Jason Winkler, CFO of Motorola Solutions, said in their May 1 earnings call that they estimate costs from the current tariff environment to be “up to $100 million this year.”
In an emailed letter to partners, Sielox CEO Karen Evans wrote: “Several suppliers have already issued not one, but two price increases in just the last few weeks. Unfortunately, we have increased the price of the controller for the first time in more than two years due to tariff surcharges on components and connectors.”
While distributors grace our cover this month, they are perhaps the most affected. According to Wesco CFO Dave Schulz’s May 1 earnings call report, “In the first quarter, price increases were down 11% vs. prior year, but it is up 150% in the second quarter to date.”
ADI has also addressed the concerns: “ADI has communicated a phased price increase to our customers to offset tariff impact,” said Resideo CEO Jay Geldmacher during a May 6 earnings call.
What should integrators do? Just as it was with the supply chain meltdowns, the key is to be transparent and to communicate.
Stone Security recently communicated an Axis camera price increase directly with customers, writing via email that “We are committed to helping you navigate this change smoothly and minimize the impact on upcoming projects.”
The company was completely transparent about the pending increase, how it would honor already issued proposals and their pricing, and the timeline for honoring them. “As a valued customer, we want to ensure you are fully aware of the timing and your available options before these changes take place,” the email reads.
People like to say the security industry is recession-proof, but it certainly is not tariff-proof. Use the lessons of the past to guide your business through this uncertainty, and this too shall pass.
