What Tariffs Really Mean for Fence Contractors with Sasha

Hey,

Hey.

Sash, what's going on, man? What's going I was rocking out to a bit of reggae, man. I liked it. I know. We Wednesday, March 5th. Man, I we we didn't go live last uh last week. I think we played a recap of something else, but uh I saw you last week. Yes, sir. You did. I'm surprised you didn't go live, but you were a pretty busy man last week. I did a lot of recordings and stuff, but it was rough, man. Uh we were fence tech, man. It was a fence tech week, man. It was just everywhere you went, there was somebody else you knew, and you were just uh kind of bouncing in. I know. I spent a lot of time in your booth, though. It's a fun booth. We try to have fun in our shows, you know, in our booth. It's all about uh connecting with everyone but have a good time at the same time, you know. Yeah. Who blows all them balloons up, man? Dude, definitely it's not me. Let me tell you now. 100%. My lungs cannot take that capacity. Y you got like a balloon person. And the beer was flowing. The beer was flowing. So, thanks for that beer, man. Yep. That's what we're good at. Hey, but you know, um by the way, introduce yourself. I mean, I I feel like everybody knows who you are. We've had you on a few times. Uh, you know, I'm I'm Brian with uh Fence Show and Security Expo, uh, My Fence Life, Fence, you know, Fence University and so on. But tell us a little bit about Sasha. So, those you don't know me, um, you could tell my accent's from the deep south of Alabama. Um, outside of that, you're GM at the Riverside location for Lime Fence and Steel Supply, and we specialize in iron products, um, panels, welder, wire, temp fencing. That's really our baby um that we focus on here. Yep. Yeah. Michaela, if you don't know her, she says, "Hey, what's up?" Do Michaela. She's awesome. But um anyway, today I want to talk about something more serious, though. You know, I we do a lot of You and I do I mean, if anybody knew us well, you'd know you and I do a lot of joking around, man. I say 90% of what we talk about is just joking and having a good time. But, um let's talk about tariffs, man. what's uh you know I mean it's it's it's a subject that is coming up almost if you go on any social media feeds you talk to anybody everybody's nervous we're you know and maybe we're nervous because we're having flashbacks of uh co 2021 so maybe we're not and you're not being paranoid if it feels like everybody's actually out to get you yeah so tell me a little bit how's this ter you you have a pretty big insight on the tariffs because you are what I like to call a hybrid model of manufacturer uh distributor and you know that that area so you deal with tariffs on a regular basis tell us all what tariffs really is and how it affects you um as a manufacturer bringing products into the US. [snorts] So look, at the moment nobody really knows, right? So we know that there was tariffs placed which we were all facing. They're in effect as of Tuesday, the last round. Um we had a first round for anyone that's importing anything out of um um China especially. Did I lose you, Brian? How did I get off? You know, we can we can we can hear you, but we can't see you. So, it looks like we lost your video. Hey, what happened there? I'm not complaining. I'm not complaining either. Look at that. The second your video went down, we got like two or three more viewers. That's weird. Yeah. What's up with the video? Let's have a look. So, um Yeah. So, I mean, for everybody that's listening though, um the reason I did this was because, uh I wanted to have a discussion about tariffs. Um, and it's a big deal for our industry and we all follow the the pricing and I think we've all gotten um, if anybody that's buying from any of the distributors, you know, um, probably one of the national ones, you probably already got some notices saying that there's either price increases already happened or um, it's going to happen soon. So, I got that as well. And um, I I see some of the stuff uh, Sasha and some of the groups and stuff where people are saying, "Hey, I don't think this is fair. Why am I getting an increase? You're still

Selling the materials that are in your yard right now." And um I probably have a different take on that. Um I look at it like well I think the increases are going to happen because they you know if you have a certain amount of product you can't just sell everything you have. And while Sasha's fixing this I'll kind of continue on. Um you can't just sell everything you have in your yard and then um replace it at a higher cost without um having without having that you know having that affect your bank account. So um I look at it like this. If you had a roll of chain link in your yard that cost you $100 and you're going to sell it for $115 um and then you're going to replace it with another roll of wire that cost you $100, you have $15 more dollars in your bank. Um so if uh the tariffs come into play and it's going to cost you um I'm I'm just explaining to some people about the you know tariffs how it affects us even as someone that's selling materials at our level. But if I have that same roll of wire at $100 and I'm going to sell it at $115 and it's going to cost me $125 to replace it, all I do is have less dollars in the bank and the same roll of wire. So that's only if I was planning on replacing that inventory to again over resell it again. So um if you're planning on going out of business and just selling your inventory, then the tariffs probably wouldn't affect you. If you're not planning on purchasing anything new, then you could sell at the cheaper cost. So, um I I think that in my opinion, I think that's how kind of how it works. So, that same roll of wire that you would sell for 115 to make 15, you now have to sell for 140, you know, to uh to make the same $15 if you're planning on replacing the wire. So, um anyway, so now that you're back, tell us uh how that tariffs affect you guys. [snorts] So, the the short of it is exactly what you said, right? The basics of the tariffs, um replacement costs, right? If you keep it really simple, the issue at the moment is the first round of tariffs that was placed on, you know, Mexico, Canada, then that was put back a month, you know, China got the hit of 10%. Um, that stuck. And the issue is then there was another 10%, then there was a 25%. And now there's this uncertainty. Is it coming? Is it going? Are they going to take it off? So, at this very moment, the tariffs are in place, but no one's really sure if they're in place for good. So, just today there was uh news that the auto industry was not going to get the tariffs put on them um just for another month because it's it's created Yeah, you're right. It's created that PSD for whatever that word is from the COVID time. So, yeah, we we're all don't know what to do. It's here. It's come. Um any fencing installers out there, you know, you've received letters from from distributors right now saying, "Hey, you know, we're lifting up um due to replacement costs." Um so it's just so uncertain um that Sam right here says the biggest issue is not knowing what's coming next. Kind of what you're saying, the uncertainty. So that kind of backs up what you were in the middle of saying. Yeah. Yeah. Yeah. And and the thing too is OmanX I come from, you know, with me, no pun intended, both sides of the fence. I'm not just a disturu. I actually first came out of the install side. So it's really hard when you're bidding jobs and you bid the job at this price. Then you're ringing me all the time saying, "Shash, where am I? What do I do?" I'm like, "Well, hey, currently this is where you should be prepared for." But what happens if it comes off? Like what do we do as suppliers, right? So, it's just there's just so so much uncertainty at the moment. And I really feel for the install side. Make sure you're really working with good vendors that actually know what's going on and how to navigate and help you navigate. So, going back to your first um point then, you know, the camera turned off um probably because I shouldn't say what I'm going to say. No, but the truth is this. There's material on the ground that's cost pre-tariff, right? Bang. Like you said, then there's the new cost of my new orders coming in, right? So, replacement cost we call it. What do I sell it at as a distributor? And I think that's the gray line that I feel for the installers, right? Because what do I tell you right now on the ground? I might have 100 uh 6 foot commercial panels.

Yeah. they're gone, the new cost is 20% more. So, it's it's it's a real balancing act. Um, and in the end, I I don't have the perfect answer because this is so uncertain. There's just no idea because the writing of the tariffs, they're very ambiguous. Like, hey, it's in Tuesday. They're all in effect, right? Southeast Asia, Canada, Mexico, and China got 10%. The question is, okay, that's the import side. What happened domestically? Like what's going on in the domestic market? The tariffs were always there though. I mean, they weren't It's not like when we say a 25% tariff, is that 25% on top of what tariffs were already there? Because I mean, there was always a tariff there, though. I mean, we we always had this tariff a little. Didn't you always have Marina bring us up whether it's 10% or whatever it is? So, when we say there's a 25% tariff on steel, is that 25% on top of what you were already paying? Yes. Is that what it is? So it's actually 35% tariff or whatever it is. Yeah. So when we got those first round of tariffs back in I think it was 18 somewhere around there whenever it was 18 19 somewhere there they stuck and we knew what was going to happen. There was no sort of uncertainty. It was like hey we're putting 25% on imports coming out of China and it was there. So everyone knew okay those people that were importing knew okay this is it. when this stock comes in the replacement cost is this. Today it's a little different because it's not so clearcut. Yeah, it was clearcut that this is going on but then the reaction of the markets have had a play in well maybe we went too far, maybe we didn't. In the end, what does that mean for us? I call myself a dumb fencing guy. What does that mean for me? It's really uncertain, right? like I've got bids going out. You got a bid that's going out that's not going to go, let's say, land for two months, you really need to put escalation clauses in your contracts, you know, and I've got a lot of people that I've been talking to that are nervous because like, well, do we bid it at today's market? I'm like, yeah, with escalation clauses to protect you because all the GCs, all of our clients know that the tariffs are here. But if you don't protect yourself as an installer, you know our industry, Brian, better than anyone. They're going to go, "Oh, that's your price." No, no, no, no. It's not your price. And these people have to understand these are government tariffs. These are not just, "Oh, it's a tariff." No, this is a government tariff. So, there's no ways around it. If they stick it, it's here. It's there's nothing you can do about it. And in my case, I have clients that have pre-ordered jobs, let's say December, right? Our lead times are probably if we're doing projects eight, whatever it is from overseas. Mhm. On the water. If it didn't land prior to Tuesday, I've got another hit. And it's just without even knowing. Yeah. Oh. So, so it's not even stuff in transit. I mean, it's not even stuff that's already here. It's stuff that could be in transit already built and and you've already paid for it. It's sitting there and all a sudden, bam, you've got another whatever $10,000 bill or something ridiculous. So what it what from what we understand the tariffs at the moment is anything that landed prior to Tuesday depends from what country it came from now right so if it came from China got another 10% hit if it came from Canada there's 25% if it came from Mexico and then like so it's when it lands at port the date it actually lands and gets off the ship is the date the tariff will back date so if you got everything off the ships on the bought prior to Tuesday, then there's no tariff. So, are you guys all out there with tugboats? Just tugging these two. I bought two real quick. Two boats, but unfortunately, they both sunk. So, trying to trying to tug that that freight land back to the to the but you know what that and that's interesting. I wasn't aware of that. I I assume that if it was a 25% tariff, that would be total. I didn't I didn't realize that was on top of whatever tariffs we were already paying um for the products coming in. So that's uh you know we could end up with a you know a larger increase but I I I'm one of those

Believers that put it in your bid. I like your escalation clause. I don't I think we I think I'm going to circle back on the escalation clause with um a lot of the members and stuff as well and even on here and maybe we need to have a whole discussion about making sure we need to come up with a simple sentence escalation clause sentence that we can all start putting inside of our quotes. I think the maybe the distributors and stuff, maybe when uh we start sending out quotes or manufacturers, we should start sending out something saying, "Hey, you might want to consider adding this to your, you know, this this clause to your quote." Maybe we could have a whole campaign and just get that out there. But, you know, one thing I've noticed though, if and again, I'm I'm just noticing back from past experiences back during the COVID in 2021 when they all had that that that spike where everything went up. obviously took a lot longer to come down than it it took to go up, but um when we did that and and I think the main purpose is because we're trying to make our domestic products uh more competitive with the import products. And I mean I that's t typically the the premise behind this you know why they're doing it. Not just to have a trade war but there's a trade war happen and China says they're going to they're going to fight to the end with this trade war but you know from what I was reading today uh you know on some of the articles. But wouldn't wouldn't if with all this 25 50% increases like right now normally when everything's stable everything's going on typically domestic goods are not more than 20% 25% more than import right so it's just uh if I was to to bid it on a project so if if the imports went up 25 30 40% then why isn't domestic why isn't the domestic always say you know at this point stay cheaper right why is domestic going to go up and increase above well our foods to answer that question due to my you know position. So that's a good question. Look, we've had this debate co was a good example of well actually 2018 was a great example of the domestic market. Right. Um the import and it's just China import for now at that period got a 25% increase. So for all you fencing people out there, you know, your your schedule 40, LG20, you know, your LG15, all your pipe, all your chain link, all the strand got a big hit. And what happened in the domestic market, Brian? Like we all know the domestic market went up. So yeah. Yeah. So a lot of people, you know, will say, "Oh, the domestic market's greedy." Look, there's money in everything, but when you look at what happened, and it's happening again, the domestic market can only have so much capacity. there's only so much that they can produce. So when you get a spike like this, what has happened? People are panic buying. They're going, "Now, you know what? I don't want import. I'm going I'm going to go straight over to the domestic market. I'm going to I'm going to buy domestic pipe." Here's the problem. They can only produce so much at the moment. They've got coils that they've planned for and they can only do what they can do when they're producing it. So what happens domestically? There's a massive supply. there's a massive supply chain issue because demand is here and supply is here. So they can't get to this demand. So what happens is they lift their prices up because they just can't they cannot produce the products quick enough. Now people say that's greed in business. Yeah, there's money that everybody wants to make. That's point one. But point two is they just can't afford. They cannot produce it. So it doesn't matter whether they give it to you for one cent or $2. They just can't produce it enough. So and everything becomes expensive even for them to purchase. So right they you don't think that we've been kind of talking about this. We didn't kind of know. So they just you think that they just didn't ramp up production because they why do that? Why ramp up production so you can just work harder to sell uh more materials when you could just sell the materials you have that you're going to produce at a normal pace at a higher price? Is that what it is? I mean I mean isn't this what they've always dreamt of? I mean if you had a business that was producing a product and you've now got a demand for it um and now you're trying to push people back into import products. It's

It doesn't make much sense to me. I mean no it's and I feel look there's a bit of that Brian for sure this you know there is a bit but you can't supply the product quick enough. So the other part that people don't understand is if you can't produce a product quick enough, what are you going to do? Like they have to rent because they're now doing like just imagine the mills at the moment going to do 24-hour shifts that cost money. They have to try and organize coils and the coils now are expensive. I got because they're not all getting domestic coil. They're getting import coil, you know. So there's a lot of the supply chain is the real breakdown. So I believe there's a bit of greed there. Don't get me wrong, but really when you look at it, and I think people don't understand that, when you look at manufacturing, once that supply chain breaks, it's a mess. Because even domestically, what am I going to do? I cannot produce enough uh pipe for your chain link fence and your posts. I've got to se selectively choose well not choose but I end up selectively having to sell to certain people that okay I can't just sell a bundle because I barely have a bundle I need to sell a truck. So it just it just bogs the chain the supply chain down with therefore increases the prices because everything's so expensive to make. It is costing them more. I mean, so it's just because they're selling more. Um, we want to think, oh, well, you would think naturally that like anything else, if I had a project that had 10,000 ft of fence opposed to 100 ft of fence, I the more footage I get, the cheaper I can sell per foot that fence for. But, um, it feels like with our materials, the more materials I want, the more expensive it's getting. So, and for us in the fence industry, maybe on our side, it's like the larger project, we're expecting the better price. And if I remember back um even during the co stuff when you called up and tried to get a truckload of stuff, it was it was actually more than if you were to just get a you know a few rolls of wire. So um it's just for us at our end and I'm just talking to you now as uh you know a a distributor slash you know manufacturer. I think we get frustrated with that. you know, why, you know, why why why is it now that we're trying to buy more and more domestic that we're going to get charged, you know, even more than when we were buying a smaller amount? And it doesn't seem like it's almost like almost like see it seems like it was premeditated to raise the price up on us. It feels like to us as, you know, and I'm talking to you now as a fence company owner and we remember what it was like in 2021 when everybody was reaching out and to me as well, you know, because through the association and they couldn't get supplies. it felt like all the, you know, suppliers gates were locked and they couldn't get new accounts and you couldn't get supplies. So, I think people are paranoid of that happening again if there's some sort of shortage of materials. Um, you think, do do you think something like that could happen again? I mean, we all remember it. Uh, especially the smaller fence companies. Uh, some of them were almost borderline taken out. They were selling jobs. They couldn't actually start because they couldn't get materials. Do you think something like that could happen again or are they just going to have to bid stuff higher? [snorts] Well, it's going to happen. Look, these tariffs are going to cause the same issue. I don't necessarily think it's going to be as bad as as that as that co period, but yeah, of course it is because the the fact is while we turn to the domestic market, they're not ready for this spike. And that's the issue. The issue is you can't just go firing up mills left and right. It's not like starting your truck, right? It's a lot of work to get meals going, get production going, get it all get these things moving. and the cost to to mass produce is very expensive. So yeah, I 100% it's going to happen because there's no other op these the tariffs are going to do what the tariffs do normally, right? It it it pushes people. So when you look at the domestic market, you got to remember it from a really like micro point of view that everybody now. So everyone was happy buying, you know, you I know clients that love import. I know clients that only want domestic, but there was enough to go around and supply whoever needed whatever they wanted, whether it

Was import or whether it was domestic. As all of these import people now turn around and go, "Dude, I need domestic." Well, you can't sustain that because the mules can only produce hex. And remember too when they're not just running inch and 78 247. They're running inch and 78 one night. They're running inch and 5/8 the next night. They're running, you know, 2 in, 3 in, 4 in, five. They're not. We don't just have this millet magic. Oh, it pops out inch and sevens and then the next run pops out inch and fives. It doesn't work like that. They have to run these in bulk. So they'll run one night they'll run the inch or one week or one couple of days they're running inch and 78 and then tomorrow they're going to run inch and two you know two and 38. So what happens when there's a demand like this? You've got people with deeper pockets going out buying up and the mill's not even ready to run in 78 for another week. So it's not that simple. Like the mill process I think sometimes we don't understand that process is not that simple. Do you think that that um some of the larger distributors or something or larger manufacturers or places like that would deliberately go in and I mean you keep I have no idea. I'm just speaking out of my my my mouth right now for I have no idea. Nothing to back up what I'm saying. But do you think that it could be um it could ever happen where one of the larger distributors or manufacturers something buys up all the one and 78 pipe and just so they can control part of the market and then that helps drive the costa or is it they they or does the does the people producing and rolling the pipe or whatever do they do a pretty good job at distributing it out equally to the country so that everybody gets supplied no comment so okay no so look so look no it's it's not perfect system right so you can't I can't go bashing the domestic market even though I'm an importer right because the system's not perfect um you know ultimately when you're running a company and and look you're an install company, you've got certain clients in certain GCs, you know, hey, they pay really good. I love working for them. And then I got certain other GCs that don't pay that you're like, ah. So, when you're busy, let me flip it a little bit. When you're busy, do you necessarily want to work for that GC that's like, you know, does holding on to your money, waving the hat, you know? So, it's the same in the supply on the on the domestic side, right? There is too much demand and not enough product. So the natural behavior of that is I feel like the natural behavior in any business is you start to pick and choose your battles. You start to pick and choose who necessarily you work with and etc etc. So not necessarily do the big boys just buy the product to hold it. It's just the natural progression is well we don't have enough product on the ground. Who am I going to supply? I'm going to supply my best customer that takes care of me. Right? And it might happen to be that big boy and but I have to make a choice because this is all I've got. It's business. It's business. It's capitalist. I mean, I get it. Yeah. Yeah. We can't we can't complain about the very same business that allows, you know, the very same system allows us to be in business. And but it's hard in a supply chain. This is what people don't understand. Once you're out of that product, you're out. Like it's not that simple on the supply chain that um you know oh dude I can produce this by the no once I'm out I'm out. I don't know what I'm going to do next. And I you know that co peri is a big eye opener domestically because you know these guys produce I'm just an inch and 78 schedule 40. Right. They run that. Then they go to the two and 38s. They run that. They sell out and now it's six to 8 to 10 to 12 weeks before the coils. You know what I mean? Sorry. Hey, explain to everybody um and and how a tariff works. Exactly. I mean, I think a lot of people we have no idea. I mean, of course, and you know, until Trump and everything he's got going on, you know, and uh he says tariff's a beautiful word. So, uh you know, and a lot of us are learning about tariffs, I feel like, during, you know, we learned a little bit obviously during some of that co stuff to a degree and stuff as well, but uh right now it's a it's a hot topic and I think a lot of us don't don't understand. Of course, we've got both

Sides. You got the left and the right trying to, you know, one says it's great and one says it's bad and, you know, one says that uh the consumers are paying, one says the businesses and the the people and other foreign companies are paying. How does the tariff get paid? You know, who who actually pays this or you know, I mean, what would a 25% if we, you know, how exactly does that work? What does that do to a $100 item, right? A 25% tariff. So, [sighs] so the initial tariff gets to get has to be paid by line for example, right? So, the initial tariff gets paid by us cuz we're the importer. We bring the goods in. So, at port we have to pay the tariffs to release the product off the bat. There's certain codes that we have to enforce and follow. There's anti-dumping, there's fees, and then there's tariffs. So, that they have to get paid at port. So whoever's bringing it in, for example, we'll just use line as an example because it's easy. So line brings it in, we have to pay that tariff, [snorts] right? Us or or our factory, one of us is paying the tariff for it to be released out of port. And you're paying that to the government. You're paying that to the government to the United States government. The tariff is being paid to. So it's not being paid to the the the manufacturer back wherever you bought the material or the freight company or anything. You're paying a separate to the United States Treasury Department, the government, whoever it is, right? Yeah. 100%. Yeah. Exactly. The problem with tariffs is they end up getting trickled down to the end user, right? It's just natural. It's a cost of business because, you know, we everyone thinks there's all this money in selling and distribution. And the honest truth, there isn't. the market's tight, margins are low, you know, there's a lot of competition, which is good for the installer, but when this happens, it just gets trickled down and passed to the end user. The problem is the install company that's not really working with good vendors that are educating them and helping them go, hey guys, it's coming. You can send me a letter and go, "Hey, Brian, I'm line sending you this letter." But if I say, "Brian, bro, hey, coming up next three months, I don't know what's going to happen. Make sure you got escalation clauses. Make sure you're, you know, you're making your clients very aware that we're only holding quotes for seven days because if it's on the ground, it's good. If it's coming, it's a tariff. And maybe the tariff will change in a week, maybe it won't." And that's the uncertainty right now. There's no like blanket, hey, it's locked in. We're off and running. And I feel like I'd rather get it locked in and know, hey, that's business. And then we can just let everyone know think. But right now, because it's so uncertain and I think when tariffs come to people hedge their bets a little bit, right? Because replacement costs are replacement costs. and you look at the product on the ground and you're like, man, that's worth some money now, right? Where before it was worth little money. Now it's worth money. So, you start to hedge your bets and go, well, here's my increase letter, etc., etc., you know, cuz it's truly replacement cost. It's it's a real thing, but that's where it sort of gets convoluted a little bit. But in the end of the day, I can understand and and as everyone can tell from my accent, I'm from Australia, but I can understand why the tariffs went in because fair is fair, right? Americans products are getting tariffed overseas, yet some of these products that were coming into the country from other countries weren't getting tariffs. So, I get the principle, right? That's what people have to understand. And it's not just that part's true, but how much is too much cuz it's really going to affect business. And well, what gets confusing I think um for a lot of people is we hear 25% tariff on Tuesday, 25% tariff on Tuesday. So we know on Tuesday a 25% tariff went in and then how come how come we get an increase from one of the big distributors of 10%. So I mean are they eating the the are they eating the 15%. I find it hard to believe considering, you know, is that what they're doing? No. Yes and no. Yes or no? Like we'll like, you know, good vendors will partner up with clients and go, "Hey, we'll help you out." But also, just know that like, let's say it's a blanket 25%. It doesn't mean that's the full amount that Lion Fence is going to get. The 25%

Because it's based on all sorts of different products, right? It's 25% coming out of, let's say, Canada. So line orders are from Canada, but it's not necessarily a full 25. It depends on the product. Raw raw products different, shipping's different, depends on shipping costs at the time. It also depends on what we can save and what we can't. And then a finished good might not get the full 25. It might get 20. Okay. So yeah, it's it's it's very it's it's really murky waters, right? So you know so certain things that are 100% 25% across board does not matter. It matters what country it comes from and that's it. But generally across the line it depends on um on the products and that's why you know there's different different increases than than you think you know. Yeah. So because I mean I I was just back I haven't seen anything higher than a 15% increase coming across. We get uh you know we purchase from a lot of different places so we get the notifications and of course people are posting them online and we're seeing them all and all that stuff and people are reaching out to me Brian what are your thoughts on this and you know how do you feel you know about this and this and this and I've yet to see anything bigger than 15% from anybody. So it just makes me uh even myself wonder you know well we keep seeing 25% 25 well why you know what's happening to that 10%. item. I'm seeing 25% increase on steel ornamental, which I do, right? That's my that's what Lion's really good at. And it's coming from other companies, not our company. Um, so it's it's there, but also too domestically, like let's say domestic pipe, domestic pipes only 10%. How much import versus domestic. So all these letters that are going out are very confusing for customers cuz they're like, "Oh, what's going you So, I just tell everyone out there that talks to us, you know, look guys, we're going to educate you. We're going to help you through this. Um, just I warn everyone, try to try to work with FWA. Try to work with good vendors that can help navigate through this cuz it's a mess. It's completely uncertain times. Um, and just protect yourself because I feel like if you're not aware, you can't do anything. But at least if you're aware, you know, some things that you can try to, you know, try to work. When I saw you last week, um, at Fence Tech, I noticed that and a lot of stuff has changed in the last year, two years. Um, when I saw you at Fence Tech, you were surrounded by a lot of, um, the European and Asian markets and stuff that were coming in, way more than I've ever seen at a fence show. Um, you know, it was a lot and it was a lot of guys selling iron and things like that. So, um I'm just curious with that huge I I don't know if it's if they were always here or if it's new, but with all these new um suppliers and manufacturers are coming in selling to um fence companies and everything, do you think that's going to help control the fence companies from being taken advantage of or the greedy people that would have normally raised the price 60 70%. You know what I mean? Even though there was only a 20% tariff or 10 15 20. So, um, do you think that's going to help control the market a little bit for fencers anyway? Well, look, I think, look, you know, me and you always talk about competition's good. As long as it's good competition, right? You know, if you're playing, if you, you know, play sport and your opponent's always weak, how do you improve? So, if competition's strong, you're going to get better as a sports player as well. Same goes in business. So, if the competition's good and playing by the American rules, yeah, it's good. It's healthy for everybody cuz it means that everyone's got a more even playing field when it comes to the installation side. The issue is, are they playing by the rules? Now, s everyone's going to ask what are the rules, s I just wrote down American rules because I'm going to circle back to that. I love that you said that. I didn't want to forget that. So, look, you know, we don't have to dig up a dead horse that's buried three, four years ago when I moved from a big company to come over here, right? So, people said a lot of not so nice things about Sasha. All right. And lion, but we never came to the market to to try to to

Um just cheapen it. We came to market to to work to take care of like that, you know, that distribution model, right? Like nobody wants to destroy that model because I feel like this that happened, this new this new um era of all these importers and European importers coming in, this could be bad for distribution. And I feel like we're trying to circle back and go, no, we need distribution. We really do. We don't like the this direct sale model and Lion has a part of the direct sale model, but it's a hybrid and it's what we've told people many times. If we sell to a distributor, you're getting a better price. We sell to a contractor, you're getting a better price, not as good as a distributor because they need to resell it and then everybody underneath pays a fair price, but it's not like the contractor. So trying to protect the industry in the fact that you need this, you need distribution right now when you allow other companies in and look that's fair. I told you competition's goodition to interrupt for one second. And so when you say American rules, we're thinking about because by the way when America is different than a lot of places, a lot of other countries we are we are we are probably holding on to the uh manufacturer, distributor, dealer, uh end user or which is the homeowner customer or whoever it happens to be. We are holding on to that model and we're holding on to it as long as we can here in the in the US in America a lot longer. So is that the American um is that is is that going to be the American rules you're thinking the manufacturer, distributor and then dealer which is a fence company kind of model. Yeah, that like I mean that's the model I believe again coming from an Australasian market European market for many many years is a different model. It's completely different model um where the American market is is that model within a nutshell you know sort of you know little gym but that's pretty much it. So that model I feel like a healthy model, but there was a there's a break in that chain. And the scary thing, not scary, the it's not scary, but the fact that there's now more foreign companies coming in and going more direct and circumnavigating, you know, that distribution model. And the issue is what's the point of like how do they sell, right? Like so certain companies will sell a certain way. Um and certain companies will try to tell, you know, the American people, hey, no, this is what you want. This is what we're selling you. And that's like, yeah, no, that's not going to work either. So, it has to be a balance. And I feel like that could be a problem with seeing that many. To be honest with you, I've never seen it that with that many manufacturers from overseas. Um, are you talking about last week at Fence Tech? Yeah, that was the biggest I've ever seen that sort of that many. Um, so you think though, going back to my original question, do you think um, and of course we're the Fence Workers Association. So, uh, you know, I while I'm also somebody that distributes and sells a lot of materials around the country, um, you know, now I'm talking to you as the president of the fence workers association, which is 80 or percent above a lot of the workers in the small fence companies and things like that. So, um, for our members, do you think that because of the access to all these additional um, you know, direct sale manufacturers and things like that, do you think that's going to keep everybody in check is what I'm kind of asking. Do you think that some of the people we'd normally buy from that if they didn't have all that that would have maybe raised it up and got away with it, do you think it's going to check it a little bit because we have access outside of our normal, you know, normal controls that we would have? I think it's going to keep it maybe initially, right? But the issue at the end of the day is quality. Like it's like and my theory five years ago was very simple. I feel like quality is going to be less and less important because as the market tightens and we're all trying to make money and it's all going to be about price but not as much right it's like so yeah there's going to be quality issues there's going to be all sorts of representation issues you know um representation in America like there's going to be all these little things that I think

Yeah initially I believe it's going to it's going to cause a sto stir but I think people are going to find out that at the end of the day this distribute, this American model uh per se, I think it's going to change a little bit. It might be a little bit more hybrid than it's ever been, but I really feel it's a model that, you know, we need to try to keep somewhat alive, you know, try to keep it in. Yeah. Yeah. We got to protect it. And you know, I'm a big fan of the manufacturer, distributor, dealer, and then out to every everybody else. And I think I guess I look back and, you know, I have a lot more discussions than probably I ever have or probably anybody should have regarding this subject because I talked to a lot of fence companies and they all struggle with the same thing about supplies and stuff and about service. And I still, and you've heard me say this before, I think we stop judging our um we stop judging our companies by their service and their and their products and started judging them by who they sell their products to. And that's where it's gone. You know, it's it feels like and I and I can't help and I have this question I have with a lot of people. I'm like I get, you know, I think they were always here. I think that you could always I mean, we were always getting hit up whether through Alibaba, whatever it was. We were always getting hit up by um people from um Asia and stuff specifically, right, trying to sell uh chain link, iron, and all this stuff. But, you know, for decades, we just blew them off. We wouldn't even talk to them. Uh it wouldn't matter if they were here or anywhere else. I mean, look, Sasha, you you came into my office for 5 years. You couldn't even get past the front door, right? I was that loyal. Um, I mean, that loyal to my distributors, right? And I did nothing. I bought everything. You if even if right now, if you go to my yard, most of it is still from distributors. I mean, I every iron I mean, 10,000 uh temporary panels I bought from um distributors where either came from builders, merchants, masters, or whoever it happened to be that was delivering up to us. And we we had a system. It was a good system that worked. You know, we supplied smaller fence companies here. We supplied uh contractors and you know, mainly contractors and if there was events going on, whether it be, you know, things like that, they would come buy the temporary panels from us. And you know, I'm just using numbers. Say we sold those for, you know, 12 to 150 that was what going price in the neighborhood or something. But then all of a sudden, we're bidding against our distributors, you know, and I, you know, they're selling them to the contractors and selling them to the event places for the same price they sell them to me for. So although I didn't want to talk to people like yourself that was coming in or I'm not I'm not putting you as a bad guy but you know what I mean anybody that was trying you know that was selling to us besides my my same distributor I bought from at all and then it felt like we had to go out and find you know and go around the distributor because the distributor went around us. So I look at um why are they here? Why is the Asian um and the European markets here and why why is it working so well right now when it didn't work 101 15 years ago? So we got to ask ourselves what's causing that. Oh, look the magic questions why I think and we can complain all we want. Like I mean to complain all I want because we're Americanbased company that happens to import, right? But we're Americanbased of American employees, you know, blah blah blah blah blah. But then I have to look at myself and go, well, why are they here? Right? So they're not here because we pushed them out. They're here because there was an opening. Right. And I didn't mean to lump you in with that that market. I'm I I was lumping you in with the fact that I I was as loyal and I think fencers are as loyal. They're probably some of the most loyal customers you can possibly have and we have been for decades and decades to one specific distributor that maybe our uncle bought from or our father bought from and we stick with that person. We don't question their pricing. We don't play any games. We order. We write a check when the stuff's delivered or maybe have the credit. So when I say, you know, you were coming in or reached out, I mean, we we wouldn't even talk to

Anybody else. So, what is what is opening that door up for everybody? You know what I mean? If if if you know, if our distributors and stuff are still there, what's what's making it what's making it possible for them to come in and dump all these money into our trade shows, all this money into our advertising, our sponsorships, how how are they able to do it now when they couldn't do it 10 years ago? Because I feel like distribution needs to recheck itself, right? So we, you know, me Brian, I think we get I can only put myself in that box. Won't put you in there because, you know, I don't want to have to answer for you, but you know, I think we get misinterpreted, especially me, because I don't want the distribution model to go. But the problem is the distribution model needs to check itself because how does that make sense if my customer for example Las Vegas fans has a retail business and I'm now selling to your GCs and people you're selling to. It makes it very difficult for you to put bolt on some more money into your business. And that was not our traditional model. Like the traditional distribution model was, you know, preached to me from day one when I started in American distribution was C13 license, C13 license, only self-defense contractors only sell offense. It was just drilled into me and it made sense, right? It is like we here to protect that industry. Yet somewhere along the line, Brian, and really don't care who out there disagrees with this because it's living proof it's happened. I know you've experienced it firsthand. We've sort of lost our way a bit. You know, we need to rein that back and remember this industry isn't built without the fence installer. End of story. See you later. And some of these fence installer and I'm not going to say some. A lot of fence installers have a really have a retail business. It's part of hey, we're buying chaining, we're buying fittings, we're buying pipe, we're buying iron. like let's stock a bit and in their little communities look even in Southern California I sell but I have clients that have little retail businesses all through SoCal and we're surrounded by the biggest some of the biggest supply companies of America in SoCal like we're saturated yet in these little pockets I have customers that have retail businesses so it's a fine line but we got to remember as as dist as distributors if we're going to preach C13, whatever that license is, then we got to live it. But if we're not going to preach it, then that's okay. But don't don't say you're doing something and you're all about this when you're not. And I feel like that's how we re back that that um I won't say the good old days. I don't think there'll ever be the good old days, but at least rain back that distribution model that I feel like Brian as a fence. I'm an ex fencing. I didn't want to deal with three manufacturers and three dist I just man I had a foil guy I'd go to him first and if for some reason he didn't have it as I was doing these bids I'd go to the other guys because he just didn't have it but generally I don't have time to go pricing things and walking around I got to work with someone because I got my head down throwing out you know estimation after estimating after bid after quote after you know and then throwing the tariffs like I've got my head down like oh how do I bid this tariffs Here's the last thing I want to do is worry about my distributor selling to Oh my god. Yeah. Got to be exhausting. No. And and don't get me wrong, I am a big fan, if anybody knows me, of if you got a product, sell it to whoever you want. So, um you know, I want to protect the distribution model and you know the the what we call the American rules. I had to write it down because I'm going to remember that. But, um I want to I want to protect that, but at the same time, I'm a fan of everybody selling to whoever they want to sell to. But what I'm not a fan of is uh protecting it when you know only for certain parts of it. I think that we if we're going to respect it, everybody has to respect it. Uh you you know I don't think just the fence company should respect it. Everybody else does whatever they want, you know, and uh it's tough, man. But I I can only imagine having a a product or something that you you you developed and you built and then uh none of the distributors want to carry it or something. Um and then you're out going, "Well, I got to feed my family. I got a

Mortgage and kids to put through school and things like that." So, it's either you got to go belly up or you got to start selling your products to the fence companies. So, um what do you think we can do to um I I hate to see it. My my prediction in the next three to five years is um if we're not careful, we're going to have nothing but a hybrid model happening and it's going to either hurt or I don't know how it's going to affect the small fence companies because um as you know, as much as I as much as I'm not happy the way the distributors are going around the fence companies, I'm going to be less happy that we don't have them there to service the small fence companies. they can't buy truckloads and things like that. But I don't think that it's right that they're abused, you know what I mean? And that I don't think that they should be dropping stuff. Uh they should be using our distribution channels of the small fence companies to supply box stores and things like that. Um I think that's, you know, that's not right either. So um I don't know. I think if we don't fix that, it's going to be a mess. I think our, you know, our it's going to be real toppy turby for the um you know, for the distribution model and all of a sudden we're going to be stuck, you know, stuck with just everybody direct selling. So, I'm nervous about that and I'm hoping that um some of that gets fixed. What do you think something we can do to fix that or do you think it's just kind of going down a road that there's not much anybody can do because it's set in its ways? Well, the issue isn't can we fix it? Yes, we can. Are we going to fix it? Well, we need to get together, right? And the issue that distribution has is we're all trying to outdo each other. We're all trying to oh, who who's in who's in your booth? Who's in, you know, got the binoculars down? Like, who cares? like we need to start as a and I mean dude I've been beating these drums since the day I started at line. It was not it's not the model that we wanted. It was the model we were forced to do right and in the end of the day if we're not working with each other we're working against each other. So I feel like that's the issue. feel like um you know in this uncertain times like I don't care what fence company whether you got one truck or 50 trucks good luck bidding right now you are going to struggle to bid I don't care if you're not lined up with the right vendors helping you walk navigate through these tariffs you're going to struggle to bid and I feel bad because what's going to happen there because just like the domestic market the supply chain issue is going to be this I don't have it. What do you mean you don't have it? Well, we sold out of it because we can't get it quick enough, right? Or, you know, there's all these supply chain issues. Or, oh, by the way, the cost is 50% higher. Well, what do you mean it's 50%. I bid it at this price. I don't have 50%. Look, I don't even have 15% to put in this, you know? So, I feel like that's that's where I feel like that education part. Look, we don't need to get along, but I don't understand like we're all selling f like so from a supply side, right? From distribution side, we're all selling fans. Who cares? There's plenty of work out there. We just need to remember we we can work together and work this out. But that takes people, that takes movements, that takes effort. But in the meantime, if we don't, I'm telling you, these importers are going to come in. And yes, and yes, power is going to go to it's going to shift and installers are going to go there. Yeah. They're going to get rewarded because not of these not all of these in porters are who they crack themselves out to be. And there's going to be lessons learned, but it's going to be disruptive for sure without a question in my mind. Man, I hope not. I mean, I know um you know, with FWA and the fence show and all that, I'm part of somebody that's maybe pushing things to come sooner. Um because I I am so out there and so open about it and I think for so long nobody's talked about it. It's almost like they're afraid to upset somebody, right? Or afraid to say something, they might get cut off or this or that. But um I think I say stuff because I want it um I want it to stop. I want I want it to go to, you know, back to how it's supposed to be. And um I want that chain. I want that fence companies buying from distributors. And um but I

Want the distributors buying from the manufacturers, you know, not, you know, and not trying to control it to the point where one manufacturer controls the whole market and we're all at the mercy of of one manufacturer deciding who's getting the jobs based off of this person they supply the materials to and things like that. So I wanted a more open channel of lots of options because if the European Asian markets are willing to come in and sell, I'm sure they would rather sell through distributorships. I'm I'm I'm guessing if I was coming in here, I'd rather sell my product in bulk to the large distributors and have the distributors which already have the um you know the network to distribute it out to all of us through our channels, right? I'm sure they'd rather go that route. I'd like to see them um open the floodgates to more options on materials and buying from you, you know what I mean? And stuff like that as well and having I'd rather see you guys all just supply these distributors and distributors do that. They've got the the network in in place and and stuff. But my nervousness is if we don't get to that point where um you know they're they're looking out for our best interest and they're shopping for the best deal they can get to get us the best deal, not just relationships um you know with a couple manufacturers. I think that uh it's going to go away and I'm nervous. So I hope that it changes and I hope it changes. I hope distributors get stronger and and uh see what's happening um as well, you know, and fix that. So um let's talk about the fence show man for a second. I I know we could you and I could go down that road for a long time. So, uh being that we were just talking about Fence Tech, uh you had pretty similar booth at the fence show and a lot of people are already reaching out to us. We had a flood of people every year after Fence Tech, we just get flooded with people getting their booths for the fence show. Yep. So, you guys are going to be there. You got your booth all picked out? Yeah, we're there. We're we're going to be centering up line in in in the show. We're looking forward to it. Um, I'm I'm excited about it. Um, you know, clients, new clients, uh, new people. Yeah, I can't wait. You know, love Vegas. One of my favorite places to run away from the wife. Did I say that on the podcast? Sorry. Just having So, no, look, it's it's I'm excited, right? It's all about I feel the atmosphere is there and um, you know, it's a good time. Love the venue. Feel like it's affordable. I know a lot of my clients loved it and um yeah, it's going to be a good show. I can't wait. Yeah, we got some cool stuff. Anybody's listening, um actually the portal's open now for hotel rooms, too. We opened that up not too long ago. So, fenceshow.com. Um go in there and register. Uh you have a code, too. I don't know if we got your code. We should have got you made sure you knew your code. Um we're going to drop in the comments. We're going to drop Thash's code in uh if you want to uh register and get a free Expo um hall pass. Let's do it. Um we're pretty excited about it. It'll be a lot of uh a lot of new people coming in. um a lot of large groups. We found that uh we really kind of catered it to not just uh the business owners themselves coming, but being able to bring their whole team to get more fencers and um stuff to the show as well. And I got a lot of people making it their I guess they we had one guy that uh came over and said, "Hey, you know what? We're going to be bringing 10 people this year. We brought just me and our wife last year and they said, "You guys have made it to where um you know, you could put two people in a room for 250 bucks for the whole week and they're using this as a big morale booster." And we got another guy that said, "Hey, you know what? We bring our team of 20 to your show and uh we but we make them do we make them work for it. They uh every one of them has to get an OSHA 30 card or something on their own time or so we make them or and they have to when they go to the class they got to sit through at least a couple of the classes when they go to the show. So um there's little things you can do like that and the morale is just uh you know through the roof. They look forward to it you know for uh you know every year coming. So um Sasha um I know I probably made you talk on a couple subjects that I wasn't planning. We were just going to talk about tariffs, but uh somehow you and I always always got stuff to talk

About. Hang me like you know that loose a little bit. Yeah. Thank you. Appreciate that. Yeah. Thanks. Thanks for coming on. I'm going to let you go. And everybody everybody that's watching live, thank you. And everybody that's watching this uh you know in the future uh pre-recorded. We appreciate you uh taking the time. Um we will talk to everybody next Wednesday. We got some uh really cool stuff going on next Wednesday. Um, we'll be doing some sneak peeks of what we're going to be discussing, but definitely watch for those. Sash, we'll talk to you later, man. Thanks.