How Tariffs Are Hurting Small Craft Businesses — And Why It Matters to You
I sat down today to write an uplifting article about how soothing knitting and crochet are during turbulent and stressful times. But I just opened the pile of mail on my desk to find my first tariff bill from a Canadian import, and really lost my enthusiasm for that topic at the moment.
So here I am, piling onto Amy’s excellent article from a couple of weeks ago with a very specific example of how tariffs are impacting a small business—and ultimately, you, the consumer.
Stitchers use many tiny gadgets, widgets, notions, etc., as part of their craft. These tools are necessary, but are almost entirely manufactured outside of the U.S. We lack the equipment and facilities to make these items here. One of our favorite women-owned notion businesses is from Vancouver. Firefly Notes makes these adorable storage tins that work well for storing these little notions. I use one to carry around medications in my purse. Each has a vintage-inspired design on top (we have over 30 designs at the shop right now). They’re both practical and adorable.
On April 25, I ordered $2,460 worth of tins and stitch markers from this small woman-owned business in Canada–for items that can not be purchased from a US manufacturer. The items arrived about a week ago. Yesterday, I received the tariff bill. It’s common that a tariff bill comes in from UPS, FedEx, or some other freight company, often up to two weeks after the shipment has landed. This means there’s a delay in our shop knowing the full cost of the goods we put on the floor.
Tariff fees are determined by the codes placed on the freight invoice by the shipper. Each code corresponds to a different fee, and the tariff code system is incredibly complicated, even before the Trump administration added flat tariffs on top of existing ones. It’s often difficult for us to anticipate import costs, but now it’s even more likely that a small business will be surprised by a significantly higher cost for items we've been ordering for years.
The tariff bill was a staggering $1,016 for goods totaling $2,460. This used to be a few hundred dollars for a shipment of similar value. As the business importing these goods, this bill is paid by my business, and I am legally responsible for paying this tariff to the U.S. government. It’s now built into the cost of these goods.
At this point, I have a choice to make:
Do I absorb this new cost, cut my margins in half, and make significantly less money?
Do I pass the cost on to the consumer and maintain my margins?
Or do I stop selling these fantastic items in our store, with no potential replacement from a U.S. source?
The first is really not an option, as cutting our profit in half on items like this will significantly impact our ability to pay staff and cover our overhead costs. A brick-and-mortar business really must make a certain margin on goods to be able to operate.
Unfortunately, tins and stitch markers from this vendor will now cost more. You, the consumer, will pay that tariff because our business can not simply absorb that cost. These tins were priced at $12 and $18 (small and large). We’ve added $1 to each item, covering only half the tariff. I’m not sure these items will sell if we raise the price any higher. Before we reorder from this vendor, I have to consider what the market will bear and whether we can continue selling these items in the store.
As you see prices rising at your locally owned businesses, remember: we’re likely absorbing much of the increase in costs for you. (In this case, I’m covering only half of it with this price increase). This will have a tangible impact on our long-term stability, as we cannot replace imported items with American ones. They do not exist for many of our industries.
As a yarn shop, our entire needle inventory is manufactured in Asia, where the facilities for these unique items are located. Without needles and hooks, our yarn products can’t even be used. It is a product we must keep stocking, despite the massive increase in the cost of importing them.
Your small businesses are all facing massive shifts in their business models to keep serving our communities in this unstable economy. We’re doing as much as possible to cushion the impact on all of you for as long as we can. We are anxious about the future.
I’d encourage everyone to start thinking about holiday gifts early this year. I expect prices will likely continue to rise as retailers pass on increased costs. And of course, please shift your shopping to support small, independently owned businesses as much as you can.
