← The Product Boss with Jacqueline Snyder
The Product Boss with Jacqueline Snyder
684. What the Trump Tariffs Mean for Small Physical Product-Based Business (And How to Pivot)
00:29:49
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Jacqueline Snyder
Hi, I'm Jacqueline Snyder and this is the Product Boss podcast. I've helped launch and grow thousands of product based businesses, even one of my own. And over the last 20 years, I've seen behind the scenes of businesses just like yours. Whether they are makers, manufacturers, artists, or food and beverage businesses. I have spent so many hours studying it all. I've discovered what makes them successful, what mistakes they could have avoided, how did they turn their ideas into a successful business, and what are the strategies that they have used to make more sales and be discovered by more customers. And this is what this show is all about. Whether you're just starting out or you're looking to become a million dollar product boss, I'm here to give you the permission to chase your dreams, no matter how big or small. All you need is the right mindset, a little courage, strategy and support, and you too can be the next million dollar product boss. Let's do this. Hello everyone, and welcome back to another episode of the Product Boss podcast. I'm so glad you're here. So if you're new here or you've been listening for a long time, this is a podcast dedicated to physical product based business owners. Yes, people who have physical products, they have cost of goods, they're sourcing, they have to hold inventory, their shipping, all the things. This is for you. I know there's so many service based podcasts out there and podcasts for coaches and general business, but this right here is a place that if you make and sell something, you have a physical good and you're, whether you're a maker, a manufacturer, or you're sourcing it and you need to sell it to people. Well, welcome to the Product Boss podcast. So I'm going to kick this off because based on the title, depending on how you've landed here and where you're at, I want to start with that. This is not a political podcast podcast. It is a small business one. Okay, so I've, you know, I've been deciding whether I want to get into conversation about the tariffs. Part of the reason I have not is that there's so many things that have been changing and shifting and nothing's been solidified yet. So I've kind of been holding off on speaking about this, but I feel like right now I'm ready to jump in. I'm ready to give you my opinion, my ideas and ways that we can really think about navigating the ups and downs of what's happening right now on a global level. When it comes to this conversation about the tariffs and what that means for small businesses. So I know that there's news around the world, right? He's got Trump has these proposed tariffs. There's ones that are, are taking effect or they're not taking effect. I keep apologizing to all my Canadian listeners and truthfully, everyone, because none of us want the ruckus, right? We're not really looking for the upheaval. It's already hard enough to have a small business, but it is what it is. And the problem right now is that news and news cycles are really creating panic. And that's what they're meant to do. They're meant for us to click, they're meant for us to panic. They're meant for us to see the worst case scenarios. And I think that's really happening a lot for our community because our community are physical product based businesses. We manufacture, we source, we make. There's things that we cannot physically make yet in our countries or maybe it's gone overseas and we haven't been able to get it back. So what I want to do for all of you, and I've been in business long enough, I've been in business for 20 years as a small physical product based business owner and coaching them, I've been through the last recession in 2008. You know, when everyone was baking bread during the pandemic, I was live every single day coaching our product bosses on how to keep their businesses going. So this is one of those moments again where I want to step in, but I don't. I want you to know that this episode is not about fear. It's about context. It's about opportunity. It's about pivoting and that's what we're going to dive into. Okay, so let's talk about what's happening and why it matters to you as a small business. So, yes, there are proposed tariffs and those proposed tariffs right now at the time of this recording are going to impact goods coming from countries like China. Okay. Especially raw materials, components and finished goods. Now, again, we don't know what's happening. It's kind of the same thing with the TikTok ban. It's in, it's out. I have a lot of students that use TikTok and they have shops on there. And what we've done, I'm just going to say this so I have a couple students that are actually like the top, top, top shops on TikTok. But there's people who rely on that platform. And what we've done over the last year and a half knowing that TikTok could potentially get shut down, for example, we've been diversifying where sales are happening. We've been diversifying. We've been building email lists, We've been selling online direct to consumer through, let's say, shopify. We've been getting into wholesale. We have not had all our eggs in one basket. And that is true. The hard part is, is that when things happen. I'm going to say this again, like during the pandemic, when things got shut down, when in person, stores had to close their doors, when we had to get everything online instantly and figure out how do we reach customers and, you know, how do we stay in business and keep going? Which, by the way, my students thrived. They did so well during that time. We're kind of at that point again where it's like, okay, so this is happening in the world. And this is for my community, students, listeners, wherever you are in the world listening to this, whether you're in the States, in Canada, uk, Australia, New Zealand, Asia, South America, wherever you are, okay, we've got some students in Sweden. I mean, I know that this is listened to on a global level. It is what it is. And we're going to have to pivot. Okay? But when I talk about China, because China is a major supplier of raw materials, of components, of finished goods. And also, we don't know if he's going to, you know, put tariffs again, like on Mexico and Canada and all the places, we have no idea. And that's okay, because truthfully, we actually have no idea ever. It's this concept that humans have where they think every day is going to be how we expect it to be or the next. But you know this in other contexts in your life that things go wrong, things happen, we have to pivot like, nothing is sure. Actually, the idea, and I was reading this kind of very, like, Buddhist book, is like the idea of groundlessness is the thing that we can hook onto, the thing that we, if we know that it actually, if we're always ready for change, if we're always ready for the ground to shift beneath our feet, it's not going to surprise us. It's not going to throw us off. It's going to ask us to get creative, it's going to ask us to step up, it's going to ask us to pivot. And truthfully, isn't that what entrepreneurship is all about? So I know, and I'm not going to take away anything from the panic and the fear and the, the feelings that you might having knowing that if many of your supplies are coming from overseas, right, or your goods or your manufacturing and importing and everything is going to just jump. I get it. Pricing could go up, will go up. But here's what I want to say to you, is that prices are going to go up everywhere for everyone. So this is not just happening to you, this is happening on this level, at least in the US where it's happening for everyone. Import, export, we're talking about chips and iPhones, right? Apple is manufactured in China. So things are going to have to shift, things are going to have to change. But what I want you to remember is that prices are going up. So if you're worried about your prices going up because of the supply is coming from overseas or your finished goods are coming from overseas, just note that it's already at a cheaper price than if you were manufacturing it within, like domestically. And there is room for you to probably raise your price and it's going to go up for everyone. Okay? This isn't the first time that this has happened and this isn't the first time where people have had to scramble. So I know, I keep referencing back to Covid, but that's because it felt like this thing that hit us and we weren't sure how to navigate it. So during COVID one of my clients, one of my one on one clients, they were making equestrian apparel. And the craziest thing was our fabric that we had found and sourced and worked so hard to find didn't come from China, it came from Italy. And I don't know if you remember, but Italy was literally the first country to shut down. And we were right on the cusp of manufacturing. We were making everything in the US and we'd found this fabric. I'm not kidding when I tell you how much work it went into sourcing this material. And we found it and we couldn't get it and we had to pivot, we had to scramble. We had to look for plan A and plan B and plan C. So what I want to talk about knowing that is this is what small businesses get to do differently. Okay? You get to figure this out. This is actually a strengthening exercise to your business. I'm not kidding. I've been in this long enough, I'm telling you, two decades. I've been in this long enough that normal, random things could happen where we have to be able to pivot and then global things can happen where we have to be able to pivot. So what small businesses get to do differently Not I have to. This is from one of my coaches. She's like, it's not, I have to go do this. Just change that contact. Say I get to. So you get to figure out how to ride this. It's a trade war. It's on purpose. It's someone with a strong arm and strong hand trying to affect change and make things happen. And yes, it's really, really affecting a lot of us. You know, it's going to affect the consumer, it's going to affect the small business. But this is what you get to do differently as a small business. One you get to realize you're nimble. You are nimble, right? You don't need these massive lead times or red tape to make decisions. Think about it. And I've worked at massive fashion design companies. And so those companies have stakeholders and CEOs and CFOs and boards that they have to talk to. And then they have the boots on the ground, they've got the people, they've got suppliers overseas. There's just so many components and they have price points that are already established because they've suggested manufactured retail pricing. Right? These things are already happening, they're just established. So in my head, I imagine, I don't know, let's just. I always bring up Nike because it's a global brand that we're aware of. But Nike, they sell in all these places. I'm not sure where they manufacture but they have like the customer expects it at a certain price point and they have such a big ship to turn, it's very hard to turn. So I referenced this in the idea of the Titanic. The Titanic could not turn fast enough to avoid the iceberg. I'm not saying there's nowhere here, I'm saying that Nike is sinking. No, absolutely not. But the bigger your company is and I'm not even talking because most of you are probably, I think one of my students is at 25 million. So let's just say you know, you're in, you're either you're just starting out or you have a hundred thousand dollar business or a multi million dollar business. You're still a small enough business that you can be nimble. You're not hundreds of millions of dollars in with stakeholders and all these things, right? So you get to be the little zippy speedboat, turning, pivoting, changing, getting the heck out of the way of the iceberg. It doesn't mean that things aren't going to be, have to be strategic or tough or when I say tough like a Challenge asking you to level up to that. But we have this ability to be nimble and pivot faster. Okay. You also can try alternatives. That's another thing that you get to do differently. You get to figure out alternatives. And I brought up the pandemic because in all of the things that we had to pivot on, oh, I'm selling in person. I can't sell in person. How do I get online and how do I sell? I'm sourcing my products from here. I can't get it. I don't know if you remember, but vessels were so hard to get. Anything that had to do with, like, glass, Glass jars, that was so hard to get pumps, like the tops of pumps, because eventually the world shut down and we could not get the stuff then either. So if you've been with me for any period of time, you know that we all figured out alternatives. I want to remind you of this because I've been in manufacturing since I was born. My parents were manufacturing denim jeans in downtown la. Denim was is and was massive industry in Los Angeles. And I grew up. I remember my mom would be like, yeah, we'd put you, like, to take a nap in a box, like, of jeans stacked up in a big shipping box. I was like, cute. It's amazing that now I'm like, you know, helping physical product businesses, because I literally grew up, like, in manufacturing. And for two decades, I have produced apparel and accessories in Los Angeles, which, by the way, years ago, when there was the proposed plan to raise the minimum wage in California to $1718. Back then, this is years ago, I was already strategically planning this out with my students, with my clients, within my business, with my manufacturers. Was, how do we keep product made domestically? How do we keep this stuff still being made in Los Angeles when our minimum wage is jumping so high? Cost of living is a lot here, and we believe in paying higher minimum wages so that people who are working at minimum wage jobs can afford to live in Los Angeles, in California. And so why that was hard was you cannot make. If I'm paying someone $18 an hour or 11 an hour, just because I'm paying them more doesn't mean that I can possibly get them to make more in that hour. It doesn't speed up their hands. It doesn't speed up the process. So actually, everything already was just going up in price. So knowing that, yeah, manufacturing did leave. 5% of the world's garments were made in Los Angeles. There was manufacturing that did leave. Well, hopefully maybe now this returns it back. But what I want to tell you through all of this, because I, I am an expert at manufacturing domestically, is that manufacturing domestically is not dead, it's just rebuilding. I have a really good friend. Her and her husband have this company that's a full product development company, like, different products. They're based in Arizona, and they have been working diligently on figuring out how to ramp up their capabilities and production domestically so that they're prepared. Everybody on this planet has a job, okay? We don't see it. And I had asked someone this once. She was a psychic. I know this is getting a little weird. She was a psychic. And we were talking about these crazy world events that had happened. And I was like, did you know this was going to happen? Like, 9, 11. Did you know that that was going to happen? You know, like, things like that, if you're a psychic. And she's like, she gave me some examples, but I was like, so how do you, like, continue in this world knowing things that happen, not knowing things that happen, like, what do you do? And she's like, this is how I look at it. She believes that each of us have a job that we were put on this planet to do. If you think about, like, ants and an ant farm, like, everybody has something that they're doing. It's assigned. No, it's not assigned by some. Like, we don't have a boss that's assigning it to us. It's our life's mission in this world. So I want you to know that your job is to make products that meet the needs of your customers or the desires of your customers. Right? It's helping consumers feel good about their lives. You're solving problems with the products you're making. And also there are people who are manufacturers or manufacturing companies or production facilities that are working diligently to bring manufacturing back. That is their job. So. So note that you are going to keep coming up with these ideas, creating product, selling to consumers. And then there are going to be people within our countries that are working on domestic manufacturing. Does it happen fast? Fast enough. No, it doesn't. But those people are doing their job. And you're going to do your job so that when we're all ready, we can all meet together. I want you to think of this as it's rebuilding. Yeah, it's going to be rough, it's going to be tough, it's going to be rocky is maybe the word I'm looking for as we're navigating through it. But things will settle down, they will pan out. We will figure out what can be made domestically, what sources. There are small companies out there that can still do certain things. So you might even be someone of a product business that is also a service business. Maybe you do something that you've got the ability to do that people were feeling like they needed to do it overseas. Maybe this is the start of you having a business that you could be like, hey, I'm domestic, and I can what? I can do embroidery. I can do injection molds. I can, I don't know, develop certain things that people had to go overseas, but they don't know that you exist. So I just want you to think of this time as a rebuild time and a time that actually, like, millionaires, will be made. This is a place where people. I've said, like the Phoenix rises from the ashes. Right now, things are getting reset, and the hardest time is when it's reset. But here's why you do things differently. This is why you get to do things differently. You already know how to pivot. You do it every day. A lot of us did it during COVID We do it all the time when we're looking, you know, for supplies or we're looking for alternative ways to do stuff, or you're doing things right. You are scrappy and creative. You are an entrepreneur. You can do it again. So I just want to tell you, this is your reminder right now, is that small businesses do have the edge because we can shift faster, we can tell a better story, and we could raise prices fairly and explain why clearly. So I want you to really start to think of this as an opportunity. So let's talk about some real ways to pivot. Now. The first thing, and it's what I've been leading to this entire time, is you need a plan. A, B, C, D, however many letters you think you need. We always needed these alternative plans. We always needed other places to source from. We always needed other places to manufacture for us. Always. Just because you thought you didn't need it doesn't mean you didn't need it. You absolutely, a million percent do need it. A lot of people are handmade. Great. You can keep going handmade, right? But a lot of us that are manufacturers and we're working with production teams or we're sourcing overseas, it might be a time that you think to pick an alternative country. My friend who lives in. I actually went to art school with him. He went into graphics. I went into fashion. He. He actually recently sent me a message. He said, I'm guessing that you have A lot of clients that do business in China, Right. Maybe freaking out over tariffs. You know, Taiwan over here shares the same language, culture, manufacturing abilities, and looks like we'll be leveling with the US over this tariff situation. Not sure if that's something you consider just thoughts. So there are alternative places to make your products. There are alternative places that are not going to be in this trade war. That could be your plan B, plan C, or even just A. Let me go see what that looks like. I can do it this way for now, but this is allowing for the level, the playing field to get leveled. Where else can I source? So I want you to do that. And if you're in community, like so many of my students are in our communities, it's something to have a conversation about. This is what happened during COVID When vessels and jars were out, people were messaging each other and saying, like, hey, I've got extras. I can sell them. Or I found this from this place. Right. We were sharing it. We still have a very intimate community, one in which we support each other. So another thing I want you to think about on pivoting is reviewing your supply chain. Your job is to think about what do you rely on from overseas and where can you diversify. So not only are you coming up with your plan A, B, C and D, you're reviewing your supply chain and thinking about where can you get it, where can you diversify? And then you can use this moment as part of your brand story, depending on who your customer is, the consumer. Right. You can lean into made in America or made in your country, wherever you are, by a small business, locally sourced. Right. This matters to customers right now. So they're worried about prices going up. But how about supporting the small businesses? This is something, you know, we lost during COVID People were so in it to support small businesses. They were like, let's keep the small businesses open. You know, they were ordering from restaurants, they were buying from local suppliers and local, you know, people just like you. And then as the years went by and things started feeling tight, people were looking for the discounts and the cheap and all the stuff. Well, right now all prices are going up. So how do you then lean into, again supporting a small business? Through the tariffs? Right. We're all in this together, sourcing locally. So that's just something to think about as a spin. And then this is really important because I know so many of you want consistent revenue, but you also want profit. And profit is the money you make. Profit is the money you keep in your Pocket profit is the stuff that, you know goes back to your family or yourself. Like, that's why you became an entrepreneur. So I don't want you to undercut yourself. Everybody's prices will be going up, especially the big guys sourcing in China and doing all the things. So I do not want you as a small business to eat the cost to stay competitive. You are not in competition with Nike. You are not in competition with Lululemon. You are not in competition with Walmart or Target. You're not in competition with the big guys. You're not. Yes, they have a huge market share, but you're not in competition with them. You are a small business. There's enough money in the world, there's enough consumers in the world that you could have a beautiful, amazing business staying smaller and not competing. So I say that because if you ever heard the story about Zappos, and Zappos was the online shoe company, they, when they originally started this concept, can we sell shoes online instead of people having to go to a shoe store? Cause remember, that was how you got shoes was at shoe stores, right? Instead of people going to a shoe store, they were like, can people order shoes online? And people are like, no, they could never. Well, they did their research, and 5% of the people, I think, in the US were ordering their shoes from catalogs. For my young friends out there, a catalog is a book with product in it. And then you, you selected what you wanted and you mailed a check in, and you hope that that check got to them and you get your shoes in the mail, right? Like, people were doing catalogs and it was 5%. They were like, if we could just capture the 5%, not the 95%. Let the shoe stores and the department stores and everyone else have the 95%. If they could just get part of or that 5% of people ordering through catalogs, that was a huge, gigantic, amazing business. So I want you to think the same way. You do not need it when we talk about, like, the billion dollars that Sarah Blakely made with Spanx, right? A billion dollars. If you took like a.001% of that, it would be enough or not enough. I don't want to put enough on anyone, but it would be a really great business. So I just want you to realize you're not going to undercut yourself. Prices are going to go up. You're not competing with the big guys. You're not trying to stay competitive. You're not going to eat the costs. You're going to be priced correctly. And the right customers will come. Sell to the people with money. Don't try and sell your small business beautiful products to people with no money. That's just they're too much in survival mode. It's like Maslow's hierarchy of needs. Food, shelter. What's the other one? I'm forgetting the other one right now, but you get the idea. When people are at that level, no, they're not going to buy your beautiful, handmade, embroidered, custom small business, whatever it is, they're not in a place for that. So sell to people with money. They've got money, they're going to spend it. It's going to be discretionary. They're going to choose what they spend it on. But when they can hook to you and your story and the small business factor behind it, they're more likely going to buy that. Okay, so what I kind of want to wrap with is what I think this could mean long term, right? How this could be long term, what the effects could be. And again, I'm. I don't have a crystal ball, but this is my feeling, these are my thoughts. And you can tell me if you agree. Okay. I think it's going to level the playing field in a lot of ways. So I hate Sheen and Timu. Hate them with a passion. Not only because. And actually Target's really getting added to my list lately, but it's because of these companies knocking off literal students of mine. So I don't remember if it's Sheen or Timu, but one of my students, they took, she's the model in her photos and they took the photos of her and her product, put it on, I forget it was Sheen or Timu, and they used her photos to try and sell knockoffs of her product. And the irony was it was like the business owner was in this photo. So they, they're not who especially small businesses. I get that they're cheaper, but they don't have a soul to them right now. I'm pissed at Target because Target has been really great and supportive to a lot of our students. There's people that are currently in process of working deals with them. They've definitely, from a cultural perspective, been letting us down lately. And then recently there's a brand and she's been on the podcast, Virginia Sin. And they knocked off one of her candelabras that I own, put it under the Kate Spoon collaboration and are selling it. So Virginia Sin was like, I'm not having any of this. She's posted about it. People are going in and Leaving reviews like, how dare you knock off of the small business. So what does this do for us? Well, let's just stick with China right now as the example. It levels the playing field. Because not only are Sheen and Timu going to have to work harder to undercut small businesses with their knockoffs, but it's also going to help my students on Amazon. I have a student that was doing half million dollars on Amazon. Great product, small business. She sells wholesale now we've diversified. She sells wholesale. She sells direct to consumer. But people on in China were knocking her off and not knocking her off. Sorry, they weren't knocking her off. They were undercutting it and just making the same product, but way, way, way, way cheaper. Like, and she's already importing her stuff and not from China. And so what it's going to do, and I don't want any of you to hear of, like, that's why I don't sell on Amazon. No, no, no. There's lots of small businesses making millions of dollars on Amazon and Amazon is a viable sales channel. But what this is going to do is it's not going to allow China to knock off or to undercut with a similar product. They're going to have to pay more. And so why I want you to look at this as a benefit is like, great, now at least they can't undercut us in price and truthfully, quality. But let's go with price because especially online people don't know the quality until it gets handed to them. So think of this as leveling the playing field. Think of this as slowing down the unethical things that they've done. Now, I'm also going to say, I'm not saying all of China is unethical. I know companies, and myself included, that have sourced and manufactured in China. It doesn't mean I'm not going to continue to source globally. It just means that I'm going to have to pay more for certain things, but so is everyone. And it just means that the people that are undercutting and knocking off are not gonna be able to do it at a cheaper price or not as cheap of a price. And it's not saying that I'm not going to work with China or Taiwan or Italy or India or wherever we've sourced. Because I, I manufacture and produce globally. And I believe that we are a global economy and a global. We work together. But I really wanted in this episode to share with you ways that you can think in a positive light about it. Okay, so what I want to leave you with is that the consumer mindset is shifting. It's in the news, it's in the news cycles. And yeah, there are people that are worried about money. They're maybe being more discretionary. But you know what sells Stories. Stories sell more than just your product that sells. This is what we've been talking about inside of. We do this in both in the Product Boss sales accelerator and inside of the Product Boss academy, right? We're constantly talking about how you're selling not your product, you're selling the brand, you're selling the way that people feel about it. So what I really want you to think about is knowing that people are becoming more thoughtful in their purchases. So I want you to give them a reason to believe in you. I want you to give them a reason that they're going to buy from you as a small business and pay what you're worth, pay what your product is worth, pay the value that's there and make that choice again. When they're thinking, do I go buy the knockoff at Target that's produced in China or that also prices are gonna have to go up on, or do I buy from the small business that I love the brand, I love supporting the small business. They really know what I need. So I'm gonna leave you with some things to do next. This is what to do next. Talk to your suppliers. Start talking about what they can do. Is there other discounts they can give? What are the alternatives they can have? What can you do with these suppliers? Also, I want you to start thinking about alternative suppliers. Right? Plans A, B, C and D. Next. Adjust your pricing. Do not eat the cost. If prices are going up. Adjust the pricing. Pay attention. But listen, do not announce that you're changing your pricing, okay? That is not what you have to do. Just raise your prices. Nobody's paying attention. Talk to your customers. Let them know. Not saying, oh, I'm raising my pricing, but like, start to talk to your customers about, thank you for supporting our small Canadian biz. Thank you for supporting our small American business. If you're in Mexico or a Mexican business, like, wherever you are, Sweden, Spain, wherever it is, yeah, we might have to talk a little bit more insular to some people that need to hear it for right now, okay? And I don't want you to panic. I want you to pivot. You're not the Titanic. You're a little zippy speedboat, okay? You can turn quickly, you can shift course, and you get ahead while the big ships are still figuring it out. That is what you are. That is who you are. We are on those. We are having a lot of fun on those zippy little speedboats, right? Yes. Give us this challenge. Yes. I get to figure this out. Yes. And I want to remind you that you've got this, my friend. I've lived through this in so many different levels in this industry for the past past 20 years, and I've weathered many, many storms. Okay? So this is just one more shift. It's a shift we're going to pivot through. This is not the end of your business. If you're feeling alone, keep listening to this podcast. Right. If you join one of my programs, you've got community around you. I don't want you to feel alone. I want you to know you're not alone in this because the moms on the playground are friends. Even our family, they don't really understand the things that we're dealing with. So when other people are panicking, you get to lead and make choices with calm and clarity. That's your edge. So I'd love to hear from you. If you want to shoot me a DM over on Instagram at the productboss, you can DM me with how you're thinking about pivoting or sourcing. Right? Let's talk about that. Let's get into the DMs, let's chat. I'd love to talk about it. Okay, so remember, you've got this. I believe in you. We're going to keep working through it together, and we're going to crush it, because that's what we're going to do. We're entrepreneurs, we're scrappy, we're creative. We figure things out, and we're going to do it together. All right? Till the next one.