Small businesses in the United States are facing significant challenges due to the ongoing trade war between the US and China. One such business is Busy Baby, a company founded by Beth Benike in 2017. The company’s struggle to deal with the higher than expected federal tariffs on its normal shipments has caused a strain on its eight-year-old business.
Busy Baby’s latest shipment of silicone baby mats and related products has made the trip from China to Canada, but it is still awaiting its arrival in Zumbrota, Minnesota, where the company is based. The shipment, which was delayed due to the tariffs, has cost the company almost $35,000.
- The tariffs have caused a significant drop in revenue for Busy Baby, with the company down 70% compared to the past 30 days.
- The company is now receiving only four or five orders a day, down from 100 orders a day.
- The tariffs have also caused a strain on the company’s finances, with Benike having to pay almost $35,000 to cover the costs.
Despite the challenges, Benike has been a vocal advocate for small businesses affected by the trade war. She has spoken out about the impact of the additional costs on US small businesses and has championed exempting small US businesses from tariffs.
“We are out of stock of our eight top selling mats. So we actually sell gift bundles more than anything, but we can’t sell those without the mats to go into the bundles,” Benike said. “As of today, I have enough money for my next payroll without paying myself, though that’s about it. Revenue is coming in, but we’re down about 70% right now compared to the past 30 days. … We’re down to four or five orders a day, when we normally have 100 a day.”
The drop in tariffs from 145% to 30% has helped to alleviate some of the financial burden on Busy Baby. However, the company still needs to pay the full amount of tariffs on its delayed shipment, which amounts to almost $35,000.
Busy Baby did raise the $35,000 for the tariff from a GoFundMe campaign, so Benike said the company didn’t need to raise prices to cover the tariff. However, the company is still struggling to stay afloat due to the ongoing trade war.
“It’s very, very confusing how the administration has levied these tariffs,” Benike said. “I don’t know how a small American business owner who’s paying that penalty is helping the crisis in any way.”
Busy Baby has been affected by the trade war in several ways. The company’s products are made in China, and the tariffs have increased the cost of production. The company has also had to wait longer to receive its shipments, which has further increased the cost of inventory.
Due to the uncertainty in the future of trade with China and the lack of appropriate manufacturers in the US, Busy Baby is opening doors to sell in countries other than the US. The company now has a distributor in South Korea and is setting up an Amazon store for Australia.
The company is also exploring the possibility of using higher-grade silicone for its products, which would allow the products to be cleared for sale in Europe.
“Using the more expensive type of silicone not only adds to the basic manufacturing cost, but it also means the tariff on the next shipment to Zumbrota will be much higher than $35,000,” Benike said. “Tariffs are calculated based on the value of a product.”
Busy Baby is reconfiguring its packaging to help absorb the additional cost of using the better material.
While she is trying to find the best path forward to keep her business alive, Benike feels that tariffs have halted the momentum of what was a growing company.
“Our flywheel is dead, because we’re not selling much. We’re not marketing because I can’t afford to market right now. So we have to start over from the very beginning,” Benike said. “It’s like starting to ride a bike uphill from a complete stop.”
Impact on Small Businesses
- Small businesses like Busy Baby are facing significant challenges due to the ongoing trade war.
- The tariffs have caused a significant drop in revenue for Busy Baby, with the company down 70% compared to the past 30 days.
- The company is now receiving only four or five orders a day, down from 100 orders a day.
Benike has been a vocal advocate for small businesses affected by the trade war. She has spoken out about the impact of the additional costs on US small businesses and has championed exempting small US businesses from tariffs.
“We are out of stock of our eight top selling mats. So we actually sell gift bundles more than anything, but we can’t sell those without the mats to go into the bundles,” Benike said. “As of today, I have enough money for my next payroll without paying myself, though that’s about it. Revenue is coming in, but we’re down about 70% right now compared to the past 30 days. … We’re down to four or five orders a day, when we normally have 100 a day.”
Challenges Ahead
Busy Baby is facing several challenges ahead, including the ongoing trade war and the uncertainty of the future of trade with China.
The company is exploring the possibility of using higher-grade silicone for its products, which would allow the products to be cleared for sale in Europe.
“Using the more expensive type of silicone not only adds to the basic manufacturing cost, but it also means the tariff on the next shipment to Zumbrota will be much higher than $35,000,” Benike said. “Tariffs are calculated based on the value of a product.”
Busy Baby is reconfiguring its packaging to help absorb the additional cost of using the better material.
Opportunities Ahead
- Busy Baby is exploring the possibility of selling in countries other than the US, including South Korea and Australia.
- The company is setting up an Amazon store for Australia and has a distributor in South Korea.
- The company is also exploring the possibility of using higher-grade silicone for its products, which would allow the products to be cleared for sale in Europe.
While Busy Baby is facing several challenges ahead, the company is also exploring opportunities to expand its reach and increase its revenue.
“Our flywheel is dead, because we’re not selling much. We’re not marketing because I can’t afford to market right now. So we have to start over from the very beginning,” Benike said. “It’s like starting to ride a bike uphill from a complete stop.”
Busy Baby is working to find a new path forward, one that will allow the company to continue to grow and thrive in the face of the ongoing trade war.
“I don’t know how a small American business owner who’s paying that penalty is helping the crisis in any way,” Benike said.