Busy Baby Founder on China Tariffs: When My Inventory Is Gone, I Don’t Have Anything Else to Sell

COATES: “This — hearing what you’re going through is so important to understand. And I know that you have already decided to abandon products that you have already paid for and manufactured in China because of these tariffs. Tell us why.”
BENIKE: “I mean, I can’t afford to bring it into the country. You know, we knew tariffs were coming so we budgeted for the — the typical, you know, 20 to 30 percent we were expecting. We knew that was coming. But when — when it landed at 54 percent, for us, shipment that’s ready to go, that would have been $85,000. I don’t — I don’t just have that sitting around. And I thought, well, you know, maybe I can help — get help from friends and family. Maybe I will set up a Go Fund Me because I need — I need my products to get here. And then the video you saw, I made that right after the— the jump to a 104 percent tariff, which would be $164,000. And now after today’s announcement, just to get my products in the country, it would be an additional $197,000.”
COATES: “Wow. On top of what you’ve already paid for this?”
BENIKE: “On top of that.”
COATES: “$197,000? I mean, that’s the more — it’s more than the cost to even manufacture it, isn’t it?”
BENIKE: “Yeah. Yes. It’s a 125 percent over the cost. It’s — it’s insane. It’s not — it doesn’t make any sense.”
COATES: “You know, when — when you said that you were concerned about even losing your home because of this, I mean, you’re a small business owner. So many people are trying to make ends meet, and you’re budgeting and hoping for these products to come in. How at risk are you and your family, Beth?”
BENIKE: “I mean, we’ve got about two to three months’ worth of product in our warehouse right now. And when that’s gone, that means I don’t have anything else to sell. And without the revenue that comes in from this — our online sales, I don’t have money to pay the bills, to pay my employees, to pay myself. If I can’t make my loan payments, I default on my loans, and I had to use my house as collateral on those loans. So, I don’t know. Maybe I’ve got six months if things stay the way they are right now.”
COATES: “You know, there are people, Beth, who are — who are probably saying, well, maybe there’s a simple solution. Just make your products in the United States. What is your response to that?”
BENIKE: “Right. You know, I — I looked into that today quite a bit. I have space in my property here. I have 10,000 square feet that are avail — it’s available for lease. What if I made my own factory? What if I bought the machinery and brought manufacturing here and created more jobs for — for my fellow Americans? The cost to do that, just for the machines that make my product is a minimum of $344,000 if I buy those machines from China. But now we’ve got a tariff, so double that because I’ve got to pair the tariff on top of that. If I were to find a factory that already exists here in the U.S. that would be willing to take us on, even though we’re a small business and they don’t take on people that produce such low quantities as we do, it would take at least six to eight months to get up and running because what I have to do first is I have to create a mold for each one of my products. We have eight products in our product line. Each one of those molds is going to cost us at least $20,000 —“
COATES: “oh my God.”
BENIKE: “— and take months to build. So, if I started tomorrow and we bought the steel, most people don’t know the steel goes to China to get machined to become a mold for machinery, even for American factories because that’s where the expertise lies. So, if I started that today, in six months and about $200,000 later, I might be ready to start production in the U.S.. Well, I’m already now three months out of inventory, no revenue, and I don’t have that money to — to start production in the U.S. like this. It’s just not possible for me. It’s — it’s not even physically possible.”
COATES: “You know, when people say and they — they’re almost flipping at times and thinking that they know better than the business owners and what you deal with day to day and what it means to you and your family. And, unfortunately, Beth, there are thousands and thousands of people just like you wondering what is next. And I really thank you for helping to explain what it is you’re feeling. Thank you.”
BENIKE: “Yeah. And — and look out for your fellow business owners. If you, you know, if you know somebody who has owned their own business, this is a mental health crisis for us. We are in complete turmoil right now. Even today, I had an idea for something we could do. We could export our products from China to Australia, repackage them, and then import them from Australia here. And that’s what a lot of people are saying to do, just send it to a different country and then bring it in. There’s some cost involved in that. There’s some time involved in that. I would have to execute that now, but since policy is changing every 36 hours —“
COATES: “Yeah.”
BENIKE: “— something can put Wash on that midstream. I — I can’t even make a decision because things are changing every 36 hours.”
COATES: “Beth Benike —“
BENIKE: “Impossible.”
COATES: “It’s an impossible position for you, and I’m sorry. Busy Baby, everyone, is the name of her business. There are many like it. Thank you so much.”