ZUMBROTA, Minn. — Busy Baby founder and co-owner Beth Benike paid almost $35,000 in tariffs for her delayed shipment of products from China on Friday, which she needs to arrive soon to fill her now empty warehouse.
Her latest shipment of silicone baby mats and related products has made the trip from China to Canada and she hopes it will arrive in Zumbrota by July 10, though it will probably be a few days later than that.
The struggles to deal with the higher than expected federal tariffs on her normal shipments have caused a strain on Benike’s eight-year-old small business.
“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,” she 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 from a 145% tariff on goods made in China to the current 30% tariff during
the 90-day pause in the China-U.S. trade war
means that she wasn’t required to pay more than $200,000 in tariffs. The pause is scheduled to end on July 9. Busy Baby did raise the $35,000 for the tariff from
so Benike said the company didn’t need to raise prices to cover the tariff.
Benike, a U.S. Army veteran who served in Kuwait, Iraq and Kosovo, created the prototype for her Busy Baby silicone placemat in her kitchen in Oronoco. Helped by economic development groups in the region, including the Southern Minnesota Initiative Foundation in Owatonna, she launched the company in 2017. She also appeared on the TV show “Shark Tank,” which features start-up pitches. Busy Baby products are now on shelves at Target and Walmart.
Since President Donald Trump’s move to put tariffs on international goods in response to a national emergency involving the illegal drug fentanyl, Benike has been a leader in speaking out about the impact of the additional costs on US small businesses.
She, along with U.S. Rep. Kelly Morrison and Sen. Amy Klobuchar,
championed exempting small US businesses from tariffs
as manufacturers of electronics are exempt.
Of the $34,894 that Benike paid to bring her shipment of products into the US, 20% or $23,263 is earmarked specifically to address the fentanyl crisis, she said.
“It’s very, very confusing how the administration has levied these tariffs,” she said. “I don’t know how a small American business owner who’s paying that penalty is helping the crisis in any way.”
Due to the uncertainty in the future of trade with China and the lack of appropriate manufacturers in the U.S., Busy Baby is opening doors to sell in countries other than the US. The Zumbrota firm now has a distributor in South Korea and is setting up an Amazon store for Australia.
Benike left part of her latest shipment of products in China to be sent to South Korea and Australia without the additional U.S. tariff costs.
Contributed / Busy Baby
Looking to the future, Busy Baby’s next batch of products being manufactured in China are being made from the higher-grade silicone required by the European Union. That means future Busy Baby products will be cleared for sale in Europe.
Using the more expensive type of silicone not only adds to the basic manufacturing cost, it also means the tariff on the next shipment to Zumbrota will be much higher than $35,000. Tariffs are calculated based on the value of a product.
Benike estimated the order made with the higher-grade materials could have a tariff of up to $50,000. Busy Baby is reconfiguring 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,” she said. “It’s like starting to ride a bike uphill from a complete stop.”
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