The US Tariffs & Mayday Games in the USA

The US Tariffs

As all of you who aren't living in a cave somewhere know, the US government has been steadily increasing tariffs on all products coming in from China to the USA.  About 70% of our business is in the USA and roughly 100% of our production is done in China.  Since the beginning of the year the tariffs on our board games, card sleeves and other accessories has gone from 0% in December 2024 to 10% in January 2025 to 20% in February 2025 to 54% just a couple of weeks ago to 104% earlier this week to 125% today. 

If we get a shipment in from China to the USA for say $50,000 USD we now have to pay $62,500 in tariffs at the port.  This is a payment we have to make to the US Federal Government from our company in order to get the product out of port and to our warehouse.  As you can image, more than doubling the direct cost of our products is NOT something we EVER anticipated and we have tried hard to keep our prices low since we started the company way back in 2018.  

Our Pricing Problem

Let me explain with a simple example as to the pricing problem we are facing.  Let's assume we sell a board game for $50 retail price in the USA and that game costs us $10 from the factory, a pretty typical case in our industry.  That game we can sell to customers at $50 and we make a nice profit on it, although we have to pay shipping from the factory to our warehouse in Utah of around $2/copy and of course we have the overhead cost of running our warehouse, paying our employees, advertising, attending conventions, game development, artwork, licensing, insurance, other taxes and a host of other expenses.  

(Our warehouse in Spanish Fork Utah)

The major issue is that we sell to distributors at 60% off MSRP and those distributors turn around and sell to stores at 50% off MSRP.  So this $50 game we sell to distributors for $20 and they sell it for $25 to stores who then sell it to consumers for $50.  Everyone takes a little chunk and as you can imagine we only get a very small profit as we have to pay for the shipping from our warehouse to the distributor and often wait 4-6 weeks to get paid by the distributor.  Pretty narrow margins already right?

Now throw in a 125% tariff on this $10 game.  It suddenly went from $10 to $22.50 in direct cost.  Sure for a customer buying directly from us we could probably just eat that extra $12.50 in tariffs ourselves and still make a profit, or we could pass that $12.50 on to the customer and mark our game up from $50 to $62.50, an increase of 25% on the MSRP.  But the distributor will only pay us $25.00 (60% off $62.50) for the game now and we buy it for $22.50 now, so we have less then $3 to get it shipped from China to us, from us to the distributor AND cover all our overhead.

For the vast majority of board game publishers about 75% of sales come from selling to distributors and not directly to customers.  I'd venture to say it is even higher than that in most cases.  For us to make the same percentage from the distributor then we need them to pay double our direct cost.  In other words, that $10 direct cost for a $50 game means with a $22.50 direct cost we need that game to be $112.50.  Then the distributor will pay $45.00 per copy (60% off).  Of course we don't need $22.50 per game to make enough profit to stay open, or at least we didn't.  

So what if we want to make the same $8 difference from the $20 we used to get from the distributor and the $12 ($10 direct cost + $2 shipping from China to the USA) we used to get?  Then our cost + profit would need to be $22.50 + $8 = $30.50.  So our MSRP would need to be $76.25 to get a 60% off price of $30.50.  We would then need to raise our prices by 52.5% (from $50 to $76.25) to keep the same margin on the distributor price.

Still, raising the price by 52.5% to cover a 125% tariff isn't too bad right?  

Our Path Forward

We don't WANT to increase our prices at all for any of you, but we are going to have to.  We will be increasing our prices by 50% across the board to cover this tariff, but only for the USA.  In other countries like in the EU and UK, when we make a sale we have to charge a VAT tax upfront and remit that to the proper authorities.  With this tariff we have to pay it even before we sell the goods, which is even worse for us of course.  

So what can we do?  We are looking at ways to charge US customers a +50% tariff surcharge on every item on our website in the near future.  We already sell our products on Maydaygames.eu so you can order there if you are in the UK or EU and avoid those tariffs completely, and rightly so.  

We have distribution in Canada through a distributor called Universal Distribution who provides our products to stores in Canada.  We are working with them to get them new stock directly from China rather than from our US warehouse as they used to do.  We are also working on an Canadian website that we will likely be launching soon to help you Canadians avoid all of this mess too.  We want to keep our prices as low as we can for all of you.

Our Current Situation

We luckily got a decent sized restock just before the 54% tariff would have taken effect and we have a good amount of product on hand right now.   We are going to keep our existing prices and are not going to start collecting this Tariff Surcharge of +50% on all of our items until it is absolutely necessary.  Once we get low/out of a lot of our existing stock we are going to have to implement this though. 

What Can Our Customers Do?

So what can you do? Contact your elected representatives and let them know you aren't happy about having to pay much more for everything you buy that isn't make exclusively in the USA.  The American consumer is going to face this across all facets of life in the very near future, make your voices heard.

But for the short term the best thing you can do for both yourself and for us is to buy a decent supply of sleeves and any of our games you have been thinking about buying, because they are going to go up and dramatically sometime in the very near future.  We aren't going to run any more discounts and are going to hope something changes before our inventory runs out.  We aren't shipping ANYTHING from our factories to the USA for now.  

We would also encourage you to run over to SleeveKings.com and consider picking up some of the sleeves or other games/accessories over there too as this sister company of ours is in the exact same situation.  To the extent we can sell a little more to customers now at current prices, we will be in a better position financially to pay for the tariffs for new products.  

Crowdfunding

Both Sleeve Kings / Imperial Publishing and Mayday Games have run a LOT of kickstarters and other crowdfunding projects over the years and we intend to continue to do so.  We have a Kickstarter scheduled for May 1 and we are hoping to launch Lifeboats on time AND offer it on Kickstarter at a reasonable price.  The final retail price will need to be 50% more than we anticipated but since the margins on direct-to-customer crowdfunding is better than to distributors, we are going to be leave the price at around $40 for the Kickstarter.  We may well do some Kickstarter-only games in the future or look for ways to sell more directly to customers.  We will have to see how this project goes.  Please consider signing up to be notified of the launch HERE or check out the preview page HERE.