For Matt Hassett, founder of New York-based sleep wellness brand Loftie, the year-end holiday rush has always kept him on his toes.<\/p>\n
But this time, it has turned chaotic as import tariffs on China, from where Loftie sources its sunrise lamps and phone-free alarm clocks, disrupted supply chain.<\/p>\n
\u201cIt\u2019s been very difficult to prepare. We have sold down to extremely low stock levels \u2013 we probably have about 10% of the inventory we need,\u201d he said earlier this week.<\/p>\n
President Donald Trump\u2019s tariff flip-flop on goods from China, a lifeline for U.S. retailers, has forced small firms such as Loftie to choose between paying steep levies or finding new suppliers at even higher cost.<\/p>\n
When Trump threatened tariffs as high as 180% on Chinese imports in mid-April, Hassett explored shifting production to Thailand, where duties were lower.<\/p>\n
But when the rates on China were later cut to 20%, the alternative factories with 20% higher production costs proved to be costlier than the tariffs.<\/p>\n
Don’t miss out on what’s happening!<\/strong><\/p>\n Stay in touch with breaking news, as it happens, conveniently in your email inbox. It’s FREE!<\/p>\n In the end, Hassett stuck with his Chinese manufacturer. But the scramble delayed orders, leaving him dangerously short of stock ahead of the year\u2019s busiest shopping season.<\/p>\n November and December typically account for a third of U.S. retailers\u2019 annual profits.<\/p>\n Other small business owners are also struggling to balance inventory and changes to supplies, risking low stocks in warehouses and shelves during Black Friday.<\/p>\n Brooklyn-based Lo & Sons, which sells travel bags and accessories online, scouted up to eight factories between April and June in multiple countries, including India and Cambodia, before returning to its long-time supplier in China.<\/p>\n \u201cOn top of costing us a ton in tariff payments, the uncertainty prevented us from placing purchase orders,\u201d CEO and co-founder Derek Lo said. \u201cNow we\u2019re sitting on lower-than-ideal inventory.\u201d<\/p>\n Big-box retailers such as Walmart and Costco can soak in the supply jitters by leveraging scale more easily than smaller firms.<\/p>\n Operating margins for small retailers with total assets less than $50 million have plunged to negative 20.7%, according to business analytics provider RapidRatings, leaving 36% of them at a high risk of bankruptcy compared to 12% of large retailers.<\/p>\n \u201cFor the first time since the pandemic, average profit has dipped into negative territory\u2026 disproportionately impacting smaller companies that lack the scale and resources to absorb these pressures,\u201d said James Gellert, executive chairman of RapidRatings.<\/p>\n Uncertainty from tariffs resulted in some businesses placing big holiday orders to get ahead of duties, but they risk getting stuck with unsold items due to an increasingly fragile consumer confidence.<\/p>\n More than a dozen small U.S. retailers that Reuters spoke to also flagged significant cost increases, resulting in some of them cutting jobs or trimming offerings to save cash.<\/p>\n The ripple effect of supply-chain disruptions can be seen across categories.<\/p>\n Haus of Brilliance, a New York jewelry brand, shifted some production to Thailand and the U.S. to offset around 50% tariffs on India, its main hub.<\/p>\n The company has just completed its first production run in Thailand, which founder and CEO Monil Kothari is hoping will arrive in time for the holidays.<\/p>\n But \u201cwe will have shortages this holiday season and into next year\u201d, he said.<\/p>\n Loftie\u2019s Hassett also has a shipment landing in time for Black Friday, but he has missed out on sales. \u201cWe could\u2019ve made 50% more sales if we had enough inventory,\u201d he said.<\/p>\n Additional reporting by Siddharth Cavale in New York.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"For Matt Hassett, founder of New York-based sleep wellness brand Loftie, the year-end holiday rush has always kept…\n","protected":false},"author":3,"featured_media":408166,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,79,67,132,68],"class_list":{"0":"post-408165","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-united-states","11":"tag-unitedstates","12":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115621335265787128","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/408165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=408165"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/408165\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/408166"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=408165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=408165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=408165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}