#265: Navigating the Tariff Changes in The Toy Industry | April 2025
Is it time to stop manufacturing overseas? Or are these tariffs just temporary chaos?
In this episode we're talking about the massive new tariffs shaking up the toy industry and what they mean for your bottom line. With import costs from China jumping up to 54% April 2nd, and a potential 104% threat looming over the horizon, toy creators everywhere are wondering what to do next. Should you absorb the cost? Raise prices? Cancel a launch? Shift production? I’ll walk you through what’s really happening, what’s coming next, and how to make a smart move without panicking.
On April 4th, I held a Tariff Toy Talk for Toy & Game Creators where we could get together and discuss what to do in light of the Trump administration's tariffs that are decimating our economy, and threatening the life of the toy industry.
Since so many of you reached out wanting to hear the recording, I thought it would be best to make this talk readily available on this podcast.
Tune in to hear from other toy people just like you—creators, inventors, and business owners—who joined me to share their questions, insights, and real-life experiences going through this rollercoaster. From surprise $9K tariff bills to last-minute Kickstarter cancellations and creative shipping workarounds, you’ll get insights from the front lines.
Listen For These Important Moments
[01:16] — A quick look back at how the 2025 tariff news hit the toy industry starting right after Toy Fair wrapped.
[04:27] — Several indie toy brands start to feel the heat. From canceled Kickstarters to massive clearance sales, the early ripple effects are real and painful.
[08:11] — A few creators share the gut-punch of getting charged thousands of dollars on orders they thought were already squared away.
[28:03] — Innovative responses begin to surface. 3D printing, fulfillment shifts, and DTC models come up as small brands brainstorm ways to stay afloat.
[43:20] — The big manufacturing question gets unpacked. Can U.S. factories really step up for toy makers or is that just a hopeful dream for now?
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This episode is brought to you by www.thetoycoach.com
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[00:00:00] Azhelle Wade: You are listening to Making It in The Toy Industry, episode number 265.
[00:00:11] Welcome to Making It in The Toy Industry, a podcast for inventors, entrepreneurs, and makers like you. And now your host, Azhelle Wade.
[00:00:23] Azhelle Wade: Hey there, toy people. Azhelle Wade here and welcome back to another episode of Making It in The Toy Industry. This is weekly podcast brought to you by thetoycoach.com. We can not get away from a conversation about tariffs in this industry.
[00:00:38] Azhelle Wade: What started out as a 20% tariff in March of 2025 has escalated to a 34% and then. 54% tariff by April 2nd, 2025. And by the time this episode airs, there are rumors that that number is going astronomically higher. How are toy and game creators dealing with these tariff changes? Well, I decided to host a toy tariff talk to get together toy and game creators in this industry that are navigating.
[00:01:11] Azhelle Wade: These tariff changes and challenges in real time. I thought it would just be really helpful to have a space for everyone to share what they're experiencing, what they're learning from their suppliers, their distributors, their manufacturing partners, their factories, so that we can at least gain some control over what's going down.
[00:01:32] Azhelle Wade: I also know there are some of you that have ideas that haven't launched yet that you were just thinking about placing orders on, or you're in the final throes of development with. What do you do at this stage? Well, I don't want you to just hear from me. Today's episode is a recording of the toy tariff talk that we held on April 4th, just two days after the 54% tariff was announced, and in this call we had dozens of toying.
[00:02:00] Azhelle Wade: Game creators show up and people are sharing. Their experience and insights guiding one another. If you want us to host another talk like this, please just leave a comment where you're watching this podcast or where you found the link to this podcast and let me know that that's something you'd be interested in.
[00:02:17] Azhelle Wade: Because of all the changes coming, it might be helpful to have something like this once a month temporarily, maybe twice a month temporarily, while we all figure out what the heck is going on. Well, without further ado, here is today's episode. Welcome to our toy tariff talk. So yeah, man, we have been going through it in tariffs, right?
[00:02:40] Azhelle Wade: So I'm just gonna share on my screen kind of a timeline of events for those of you that maybe don't know everything that's been going on, so we could look at it together. I'm gonna start with a March 7th, 2025, which was around the time that New York Toy Fair ended. New York Toy Fair was from March one through four, and I'm sure you saw on my podcast and you saw everyone talking about like 20% tariffs on goods from China, possibly Mexico and Canada, but definitely China.
[00:03:09] Azhelle Wade: So everybody in New York Toy Fair was talking about this 20% tariff. There was actually a great podcast episode I did with Mike Searles where he talked about this tariff and like what his. Team is doing what you should be doing. So there was a 20% tariff at that point. Everybody was freaking out then at toy Fair, but saying like, okay, we're gonna adjust.
[00:03:27] Azhelle Wade: There's gonna be a couple dollar change on the factory cost of our goods. And manufacturers were thinking they were gonna have to take most of that on unless retailers would less round prices. So then we can kind of fast forward to April 2nd. In April 2nd, Trump announced that we were going to have, uh, reciprocal tariffs added on top of, what was that?
[00:03:49] Azhelle Wade: Fentanyl tariff That was added March 12th. Now the Toy Association has been trying to lobby to keep toys tar free. I'm sure they're still working on that. But they sent an email to their membership on the second, I believe. Stating that effective April 5th, there was gonna be a blanket 10% tariff on all imports.
[00:04:09] Azhelle Wade: And then there were going to be reciprocal tariffs of 34% added to China, which is gonna be in addition to the 20% tariff that we talked about that came from March, which brings the total tariff rate for China imports to 54% higher than they were in, let's say like January, 2025. So that letter came out in the April 2nd.
[00:04:29] Azhelle Wade: Then we got this document that was shared showing all the reciprocal tariffs. And you can see China, the quote unquote discounted reciprocal tariff does not include the 20% from March 7th. We've got the EU getting an extra 20%. But I have a great chart I found from this site that I just wanna share with you guys before we get into our conversation.
[00:04:50] Azhelle Wade: So in this chart, you can see the gray was like previous tariff rates, the red. Is the 10% global tariff and this light red or light pink is the reciprocal. And what we're seeing here in this report, it's clearly a move to say, take all manufacturing out of other countries and bring it to the us. An unrealistic expectation.
[00:05:13] Azhelle Wade: But we're seeing like China now being at like 54% tariff rate with Vietnam, which was like the second place that the toy industry was looking at to reduce costs in our industry is now even at a higher tariff rate than China. Whereas Mexico is right after them, and then Canada right after them, Mexico being a third place where a lot of paper goods were being moved.
[00:05:35] Azhelle Wade: A lot of companies like Spin Master and even TCAs in the group we've been looking at and using factories in Mexico. So the big thing here is like, it seems like one retail prices have to go up because there's no way that small independents can support this, or what's gonna happen is the big guys. That can support this kind of increase, even if only for a little while will hold out until the smaller companies are gone.
[00:06:00] Azhelle Wade: And then perhaps, I don't know, my thought process is perhaps some of these tariffs will reduce and it's just a way to get less competition for the bigger guys. So then following the April 3rd, I did chat with some people to talk about like what's happening in the industry right now. So I wanna talk about small companies and then we'll talk about some.
[00:06:17] Azhelle Wade: Big company Rumors I've heard as well. So small companies, super Plastic is kind of a designer art toy brand and they already have the end of toy sale going up on their website where they have 79% off everything they specify on their Instagram page. That is because of the tariffs. You're seeing like $110 figures down to 23.
[00:06:39] Azhelle Wade: Now, the person who shared this with me is someone whose Instagram is B Barone, B-R-U-C-K-A-R-O-N-I. Um, and he shared all these, these companies with me. Now, this company, super Plastic, apparently was already having issues like a financial issues before the tariffs, but it seems like the tariff announcement really just pushed them over the edge and literally pushing to get rid of their inventory.
[00:07:04] Azhelle Wade: Now next from them, we're looking at another company, a Kickstarter of this brand called Long Box Hero Fans. So these are independent creators that had started launching their Kickstarter, and in this message you can see them saying, Hey everyone, we're so sorry, but because of the tariff announcement, we are gonna cancel our Kickstarter because the cost of our toy would have to be increased to a rate that we don't think that it's worth for you guys.
[00:07:30] Azhelle Wade: They just kind of address that they're canceling their Kickstarter for that reason. Now, if you're wondering like, why would somebody who's already launched cancel their Kickstarter? Or why would somebody who already has the product in business or a business running, why would they stop their business?
[00:07:44] Azhelle Wade: Well, another thing that Macaroni shared with me is some quotes from this creator, Andrew Bell, who runs this company Dead Zebra. And this is something that's been happening to some of my TCAs and clients as well. People that have ordered product. For this announcement, once the product was getting on the water or was about to get on the water, are getting hit with these tariff fees.
[00:08:04] Azhelle Wade: So this creator posted that he got a $9,000 tariff charge for projects that had been billed and invoiced in the past, and that he had to personally absorbed those after the fact. And this was all because of announcements that were happening like once he'd already placed the order. So some people just don't even wanna take the risk.
[00:08:21] Azhelle Wade: Their pricing was never built to account for that kind of extra expense. And there are some people here that I'm sure can speak up and share, but they are getting import fees or tariff fees after the fact, even after having paid, um, for order orders in full. That is all I wanted to share. So we had a little bit of like a background.
[00:08:40] Azhelle Wade: We're all kind of in the same head space and on the same page. Let us open up the floor. I can call on some people because I know some of you here if you are open to sharing, but I'd love if you just raise your hand and, um, say, Hey, Elle, I'd love to share a thought. Ask a question, share what's my, been my experience with my product so far.
[00:09:00] Azhelle Wade: Okay. Julie, go ahead. Julie. Hi.
[00:09:03] Julie: Hello. I'm in that, uh, situation where I've just got stuff that's, um, uh, about to be shipped fairly soon, probably in the next two weeks or so. So I'm gonna have to absorb that extra cost that I didn't anticipate, or I decide not to ship it to the US and just to have, I was gonna, I was having a split shipment, so I either bring it all to Australia and, and see if I can just, um, yeah, sell all that inventory here or yeah, take a, take a risk and just pay that extra cost.
[00:09:31] Julie: But I'm still working out my pricing, so I think I'll still go ahead and give that little trial in the States and just absorb it into the price and, and see, see how it goes.
[00:09:41] Azhelle Wade: So where is the product that is coming in, being sold? Are you selling it direct to consumer or do you already have retailers that have bought it
[00:09:47] Julie: in Australia?
[00:09:48] Julie: There'll probably be, yeah, I'll have some retailers that are, are keen to have a look at it in the us If I send it, it'll be through Amazon. Yep. So I'll be set shipping it through a GL and onto Amazon and it'll be a new, a new product that I'm, I'm trialing on there. So yeah, we'll see how it goes. Oh, it's a,
[00:10:03] Azhelle Wade: it's a new product.
[00:10:04] Julie: Yeah, it's one I've spoken to you about. You had a look at it with me. It's another card. Card game. Yeah. Was it the party one? Uh, it's got more of a broader appeal. It's sort of, yeah. Yeah. It's, um, still got the therapeutic sort of component to it, but yeah, it's got a bit more of a broader appeal than just that.
[00:10:21] Julie: So it's just adding to the brand a little bit.
[00:10:24] Azhelle Wade: One thing I was gonna say, I think she just popped out, um, but it was Samantha, but we talked about adding an a line item for the additional tariff costs, like as addit, a separate line item. Because the idea of rolling it into your pricing, when we don't know how long they're gonna stay for, we don't know if they're gonna go up or down.
[00:10:41] Azhelle Wade: It doesn't make as much sense to change the price of your product. But you can't do that with Amazon.
[00:10:46] Julie: No. No. Right. You'll have to just, yeah. Have to just decide on the, on the price and just see, see how it goes.
[00:10:53] Azhelle Wade: Can you distribute from any other country and sell to Amazon? Like can Amazon, does Amazon have distribution warehouses anywhere else?
[00:10:59] Julie: With what I'm doing in terms of using a GL, which is their shipping, which is basically their logistics, freight and logistics arm. Wherever you might. Well, they've only got it in China at the moment, but that's my understanding. But yeah, that saves you a lot. I mean, their shipping rates phenomenally cheap.
[00:11:16] Julie: I, I couldn't believe how cheap it was on my last shipment to Amazon. It was really, really cheap. Now it's probably got, it'll go up. I had a discount 'cause I was first time, but it still was really, really cheap. So yeah. This is an extra 500. Yeah, it's 500 US that I have to incorporate with this extra cha tariff.
[00:11:34] Julie: 'cause it's not a huge shipment, it's only just a hundred thousand units. You know, if I was doing 20 or 30,000 units yet, that would be a big, a big amount to have to take on board because a new product still sort of feeling the way with it. I think I'll absorb it and give, give it a go. But if I wasn't using a GL shipment Yeah, the, even the freight costs would be really, um, ex expensive.
[00:11:55] Julie: Yeah. What about your previous product?
[00:11:57] Azhelle Wade: Are you gonna be
[00:11:57] Julie: reordering.
[00:11:59] Azhelle Wade: Well,
[00:11:59] Julie: I already, well luckily some time ago I had a quite a big order that I did and sent over through Agile. That's how I, you know, saved a fair bit on the shipping. So there's a lot of stock over there. Oh, okay. Currently, yeah. But then going forward, I don't know, you know, I don't know how it's gonna go because um, yeah, Amazon's gone a lot.
[00:12:17] Julie: Yeah. It's got a lot quieter, so, and I think it will because prices are just gonna go up and consumers are gonna have, um, yeah. Less dollars to spend. I think it's really gonna have a big impact.
[00:12:28] Azhelle Wade: When you say Amazon's gotten a lot quieter, do you mean your sales have slow? For me,
[00:12:32] Julie: personally, yeah. Yeah. Oh yeah.
[00:12:35] Julie: Yeah. But that's because I've had a competitor that's come in, uh, yeah. And, and, and it's a Chinese seller. Oh my. And they've been able to, yeah. Been able to, on my main product, they've been able to really under undercut me. Yeah. Mm. But look, you know, that's, um, my sales in the Australia are good and I've got some you retailers in the states that have, have purchasing directly from here.
[00:12:56] Julie: So. That sort of
[00:12:58] Azhelle Wade: counterbalanced stuff for me. Mm-hmm. I'm so sorry, but thank you for sharing. I'm gonna call in Alex, but you maybe he has something to share that's connected with you. Hi, Alex. Hi. Nice to meet you.
[00:13:09] Alex: Hey, thanks for hosting this.
[00:13:10] Azhelle Wade: Yeah. Um,
[00:13:11] Alex: so I just kind of wanted to throw out like our situation.
[00:13:14] Alex: It's, um, what do you
[00:13:15] Azhelle Wade: do and where, what do you, uh,
[00:13:17] Alex: from Lethal chicken games?
[00:13:18] Azhelle Wade: Oh. Oh, hey. Oh, yeah.
[00:13:21] Alex: Yeah. So we make board games. We recently ran a Kickstarter where we had four games, uh, kind of in a, in a bundle, and everything's pretty much ready to go. They've got three of 'em ready to ship, and so we have that booked for shipping on Tuesday.
[00:13:36] Alex: And then I just paid a DDP invoice. Today, like for the balance of the three games, plus the DDP shipping. And all of this was set up like April 1st, or, you know, this new round of tariffs was announced. And then of course, that they went on their tomb sweeping holidays. So, you know, they're like, nobody's over there is working right now.
[00:13:55] Alex: So anyway, I, I just paid this invoice and, and it is DDP, so hopefully this is the only amount that I have to say, I just wanna,
[00:14:02] Azhelle Wade: sorry, let me just state this for some people in the room that didn't know it's, um, DD P'S like, uh, delivery duty. Paid. Paid,
[00:14:09] Alex: yeah. Right.
[00:14:09] Azhelle Wade: So it's like means the sellers, you're responsible for all costs and risks until the goods are delivered.
[00:14:14] Azhelle Wade: Well, it
[00:14:14] Alex: means that everything's covered, basically. Right. So that's the flat rate. And the shipper is in charge of taking care of the duties, right? Not me. As the ship be, I guess. Yeah. Um, so anyway, I just, I'm, I'm just super anxious as to how this is actually gonna play out, knowing that they have not technically shipped.
[00:14:35] Alex: It's booked for Tuesday. Um, but the invoice has been paid. Um, as of today, like literally this morning. So I don't know, like if anyone has any kind of thoughts or insights or experience.
[00:14:50] Samantha: Samantha, did you have experience with that? No. I have a shipment that's coming on the way, but I have everything coming through Canada so it's not being imported directly into the US And I was going to go and import through the US Like I have products on the go right now in production.
[00:15:07] Samantha: Um, and generally I usually put stuff into pre-order when I, before I put stuff into production and people would pre-order online and then I would put into production and then ship it. But given all this tariff uncertainty, I don't wanna do pre-orders until closer to I get it. 'cause then I'll know. What the actual cost was gonna be after all the duties.
[00:15:32] Samantha: But I've been trying to avoid the US like shipping direct. 'cause I, I don't know what's going on. But then now, like I have stuff going through Canada, which of course Canada has their own tariff, so I'll be paying double tariff. I. Pay for it to be imported into Canada or not double tariffs. Like double duties like, you know, I imported to Canada, then I had to pay duties to get into the US and so I'm trying to get my next shipment in to the US as much as possible before, I think it's May 2nd 'cause there's a di minimist role, which will start May 2nd.
[00:16:06] Samantha: So I'm trying to utilize that, like just try to get in as much stuff with my current logistics partner. 'cause they are, they have a warehouse like right out, right over the border. So as long as I can ship stuff over, it's under $800 as long. I'm not gonna be able to get a lot in. But I'm gonna get some in and I haven't quite set up with them yet, so I'm gonna lose, I'm losing time honestly.
[00:16:29] Samantha: But my new order, my new shipment that's coming in, which will be done in ready July or something like that. I'm hearing that these terrorists are like somewhat temporary, like in that he's trying to put in these tariffs. To cause leverage and all of this like a negotiating tactic. Mm-hmm. And these tariffs aren't somehow stay in place.
[00:16:51] Samantha: So like I'm almost unwilling to. Make like rashes and decisions, like move a whole ton of inventory over and then be stuck with inventory over and like have to like pay an exorbitant amount of tariffs while the tariffs are on. And then all of a sudden it's gone. Like, you know, with the flip-flopping he did, all these people were stuck with tariffs, like was on for like, what, a couple of days or a week and then you like lifted.
[00:17:15] Samantha: So like I, I have no idea. I, I, so I was going to be shipping, 'cause I mainly do D two C, so I was going to be shipping stuff to my customers, but luckily I held off on my shipments. Like during that tariff time. Yeah. And then they lifted the, um, because they couldn't, you couldn't or Okay. Was it that you called
[00:17:33] Azhelle Wade: somebody and you asked them and then they said like, 'cause I, there was, you got some number and you were like, oh.
[00:17:39] Azhelle Wade: They said because of the tariffs, they're not sure what's going on. So they were gonna preemptively charge you something. There was some
[00:17:46] Samantha: Oh yeah. So. My, 'cause I use a shipping company. And then they would just say, they said that because we don't know what's going on, we are gonna charge you, um, the 10% or whatever the tariffs were at the time for, for China.
[00:17:59] Samantha: And they were just gonna bill you. But I was like, didn't know what to do, so I held off on my shipments for a week. Oh, that, that kind of, um, procrastination actually was helpful to me because then the diminish rule was, um, well like they took it away and then they put it back and they
[00:18:16] brought
[00:18:16] Samantha: back. Yeah.
[00:18:17] Samantha: And so I shipped everything out like that whole week. It was craziness. 'cause I had to ship out like 300 or orders like myself. And then, um, yeah, I got them all out with no duties luckily, or like tariffs during that time. Um, uh, but yeah, now the diminished rule is. Being taken away. So I'm trying to get everything in.
[00:18:38] Samantha: Oh, before
[00:18:39] Azhelle Wade: time. I'll go back to di minimus in a minute, but Alex, I wanted to go back to you. I'm like, is the tip here? Maybe wait if you cannot ship right away, see if they go away.
[00:18:53] Samantha: I don't know. How long are we supposed to wait? Especially if you have goods on the go and it's in the, at the factory and like No, for sure.
[00:18:59] Samantha: I'm
[00:18:59] Alex: just joking. Yeah, yeah. No, I mean, and we thought about that too. It was just like, well, I mean we, it was kind of like, well, let's wait. And then it was, you know, at first it was like 10% and then it was like, well, not, let's wait. And then it was 20% and now it's 54% and you know, so it's just like, I don't know.
[00:19:17] Alex: When we were quoted with it at the 20%. And then seeing, like that's where I was just like, okay, fine. Let's just do it. Just book it. Just book it immediately. And uh, knowing that that April 2nd deadline was coming up mm-hmm. Not knowing what was gonna happen that day. I was trying to get everything locked in.
[00:19:34] Alex: So then, like, I paid the invoice this morning now that like the 54 percent's been announced. It's just like, and I'm hoping that when they come back from holiday on Monday, that they're not like, well that's not really gonna work. And, and then they've already got, you know, the 20 k that we just paid. So,
[00:19:52] Azhelle Wade: I mean, and uh, okay.
[00:19:54] Azhelle Wade: And going back to di minimis, I, so for anyone that doesn't know de minimis is this rule where it's basically the rule that allowed sheen to be sheen. And so any imports under $800. Were tar free. It was free. Completely tar free. Yeah. Yeah. And so I heard he got rid of it. You're saying it was back and now it's going again?
[00:20:12] Azhelle Wade: I thought it was just staying now.
[00:20:14] Samantha: No. So he wanted it gone because of the Shane, Tim, all of that. Yeah. Um, but what is it like the logistic right? Sorry. The, yeah, like, um, UPS and all of USPS, sorry, uh, couldn't sustain the backlog of postage because they don't have systems in place. Oh yeah. The reason why the diminish rules in place was because it's too logistically cumbersome to be able to man all these parcels that are coming in, especially lower, and it wasn't worth it.
[00:20:45] Samantha: Right. So it was causing a backlog. And so then they lifted it because it had the system's in place, but I don't know, are they really gonna have the systems in place by May 2nd? I don't know. Because it's, okay.
[00:20:54] Azhelle Wade: So that part, I didn't know that part. It's coming back May 2nd. They're trying to remove it again by May 2nd.
[00:20:59] Azhelle Wade: Yeah. Okay. Diane, you wanna talk next? Diane, go ahead. Yeah. You also shared a link in the chat.
[00:21:04] Dianne: Yes. Sorry. Longtime lurker. I've worked for, I'm with Connected through Michael Herring. One of your, uh, oh one, one of your people. Yeah. I actually run production for a mid-size, uh, games company. Oh, cool. Um, and so I obviously gonna take every opportunity to talk to my peers and I might have a little bit more information.
[00:21:25] Dianne: Yes. Give it very specifically. I'm gonna answer Alex, which is why my hand was raised. Yeah. Our forwarders, which is Flexport told us just yesterday that if your goods were handed over by, I'm gonna find the exact words, I believe it was on April 3rd, you will not be subjected to this tariff. So it really takes effect.
[00:21:51] Dianne: So everything that was handed over. So it sounds like, how do you define handed over ddp? I think it means at the container yarn. Oh, so if you paid an invoice for ddp? Yeah. My belief based on experience is that you will not have this additional cost.
[00:22:08] Alex: Definitely gonna fight it regardless. But I mean, it's not gonna be at the container yard until Tuesday.
[00:22:13] Alex: Tuesday are Wednesday, probably. Let
[00:22:15] Dianne: me look here. I'm gonna find the exact wordings from my, from my vendor. So we had very specific from Flexport, which is my forwarder, and secondly, I put in about the minimus. So there's an executive order on di minimis where it's actually across two levels. It doesn't really, it actually affects my competitors rather than us because we bring in direct to Target and Walmart and also have Amazon Channel.
[00:22:38] Dianne: Um, is that it is going to take effect over two points and there is either charging, I think it's 30% of the cost or $25 per shipment.
[00:22:51] Azhelle Wade: $25 per shipment, or 30% off per shipment, and
[00:22:54] Dianne: then per item, and then it goes up on June 2nd, I believe, to 50, I believe. I think it doubles. It's if you, it's in, it's. Wait, Z
[00:23:05] Azhelle Wade: Wait, wait.
[00:23:07] Azhelle Wade: Yeah,
[00:23:10] Dianne: read the executive order. The di minimus, like for small, independent, direct drop ship from China, I think we'll have a massive, uh
[00:23:20] Azhelle Wade: oh yeah. A duty rate of either 30% of their value or, or $25 per item increasing the $50 per item after June 1st. Yeah. What per item? So like not per ship. Per item. Yeah.
[00:23:35] Azhelle Wade: That's insane.
[00:23:36] Samantha: Yes. In addition to all of this, I don't know if it's helpful because I think most people ship directly from China, is that I also read that because the kmsa, like the, the free trade agreement between Canada and Mexico, so if your goods Mexican or Canadian made and if it falls under that KMSA or whatever it's called, the DI minis still applies.
[00:24:00] Samantha: So you, you can still ship in duty free like your. Whoever. Yeah. But it has to be, the country of origin has to be either Canada or Mexico.
[00:24:09] Azhelle Wade: So are you thinking about shipping your goods from China to Canada and, I mean, 'cause that's where you're at.
[00:24:14] Samantha: I thought that would be the loophole, but they're closing that loophole in that if the goods are still Chinese, made a Chinese origin then, because what HA is happening now actually is that a lot of Chinese companies, they ship through Mexico and then they ship into it.
[00:24:30] Samantha: They ship into Mexico and then they drive them over into, into the states. So they're closing that loophole. So as long as your goods are Chinese origin or not Canadian or Mexican, then it would still come in. But how
[00:24:44] Azhelle Wade: do, how do we define that? Like, like what if you got your packaging done in Canada and you've, you ship the dolls from China and you packaged it in Canada, like, you know what I mean?
[00:24:53] Azhelle Wade: Like how like, so,
[00:24:54] Samantha: okay, so the way that they define it is that if the HTS code changes, so for example, okay, so like you have say a raw good, you're like fabric for example, but then you make it so that it comes in as raw fabric or whatever. I don't know what the HTS code is, right? Yeah, yeah. You make it into a dull.
[00:25:13] Samantha: So then the HTS code is now dull. Oh. So then. That's a Canadian made good like heat made here. Got it. Box it. It's still a doll, right. So it wouldn't change it. It has to. So the way that also I've, uh, I've also been doing a lot of research. Like some companies, they'll, they'll send it to Mexico, but like just say, um, table parts.
[00:25:36] Samantha: Like they'll like, and then they'll make the table in Mexico and then it's now a table and then it, they can ship it into, yeah.
[00:25:44] Azhelle Wade: Wow. Interesting. Okay, so Amy wrote in the chat, so if I wanted to make a hundred promotional play mats or totes for my games, it would just be untenable. Yes. Uh, right. Yeah. 'cause even with the di minimus rule, yeah.
[00:26:00] Alex: So I, I think, and I just kind of replied to that in the chat, but I, I think that if you have your promotional items, like the lower cost things that are gonna get hit with a, what is it? 30%? 30% and then
[00:26:12] Azhelle Wade: 50% though by June, so,
[00:26:14] Alex: right. So if you have a promo item that costs a dollar, then it's a dollar 50. Um, I think it's when you're hitting like those things that it costs like $700 for example.
[00:26:23] Alex: Yeah. Where a 30% would be $210 per item, then that's where the $25 caps out. And uh, you know, I think the hardest, the suckiest ones are gonna be the ones that cost, you know, right at that, right at that midpoint where the 30% is $25, but then the cap is $25. And, and that's where, you know, you've like it, I think it's gonna hurt the most, but I think on the smaller, cheaper items.
[00:26:48] Alex: You know, especially where, you know, you're looking at a cost of 25 cents per promo item or something like that. Like, I mean, it's, it still sucks, but at least it's like a $25 per item tariff on something that only costs 25 cents. So I, that's my thoughts on it.
[00:27:04] Robin: This is a totally different view. So can I go ahead and share it please?
[00:27:08] Robin: Yeah. Okay. Here is the thing, the toying industry as a whole, I think, you know, the toy creators don't get the credit and we don't stay. I mean, I am just getting ready to launch and I. You know how much money I've spent. I mean, y'all know how much money you spend to get a toy or a game to market, and then you have to crawl along and try to figure out how am I gonna make some kind of a, a margin off of this?
[00:27:36] Robin: McDonald's used to make seven 50 an hour and they finally stood up and said, Hey guys, you're paying $7 for a cup of coffee, which is just water and beans, and this has value and the value isn't. 'cause. We saw something yesterday on LinkedIn where somebody had said, we need to point to what increase value there is in these toys.
[00:28:00] Robin: Well, I don't think the increased value is in the toys. I think it's in us. In us. So I think as a whole, as an industry, this might be that whole reset. I know that they're trying to get manufacturing opened in the United States. Samantha, I don't know if you could ever have switch over to the us, but it's kind of like being able to reignite the vision of.
[00:28:27] Robin: Having toys that are worth something. I know in China too, you're knocked off immediately, you know, after you launch something, then they've got some, some knockoff. So during this great reset, bragging the objection, you know, that yeah, guys, this has happened. Um, we've all sacrificed to put this forward and give you these great toys, and the cost has increased and we are going, we're having to pass them along to you.
[00:28:55] Robin: But that value being, does that make sense at all?
[00:28:58] Azhelle Wade: Yes, but I have like a devil's advocate, but also an agreement for it. Like I too have been saying to a lot of my TCAs, like I have. Uh, so many of the TCAs are usually create very high-end products, so they usually can command a higher price, but also at the same time, they're working people who are like, well, I don't wanna make my toy $50, 'cause I know that I would want it to be 40.
[00:29:20] Azhelle Wade: And now I'm in a position where I have to say, listen, if you can't get yourself 75% margin on this product, it's no longer gonna work. And it honestly, that number might be getting closer to 80. Now with these tariffs, the problem comes with like, yes. The idea of we need to raise our prices by two to three to $4 to offset this, and we are worth it.
[00:29:44] Azhelle Wade: Our products are worth it. Fair. The problem comes in, this is not just happening in our industry. So now this is happening in every industry, which means people have less money all around. So it doesn't even matter if, yeah, our toys are worth more, it's, they have to pay more for food, they have to pay more for cars, they have to pay more for house.
[00:30:04] Azhelle Wade: So it's like. We're just in a fight for the dollar at this point. And I think what actually is gonna happen is people that can innovate to make their, to keep their products cheaper or the same price are gonna be the ones that can stay. And I feel like this is a good segue into the next thing I wanna talk about, but then I want Layla to share what she shared here.
[00:30:22] Azhelle Wade: Um, but I just had an interview with someone who is making now 70% of their products with a 3D printer in their own home. And when they first started, and I'm, I'm playing with one right now. When they first started, they made plush products primarily in China. And they built a, a big following on Instagram, really strong and engaged community.
[00:30:44] Azhelle Wade: And then they, um, because of the, the first batch of tariffs that were being threatened, like I think a year ago, um, or he was just talking about, she was like, let me look into other ways of manufacturing. She looked into 3D printing. Nobody, you know, 3D printing doesn't always off like result in the smoothest, you know, design.
[00:31:01] Azhelle Wade: Like you can even see this guy has like ridges on him 'cause like that's just kind of like what 3D printing does. But she experimented with it. She tested it with her audience and they were open to it. And now 70% of her products of a business that supports her entire family of four are 3D printed items.
[00:31:20] Azhelle Wade: And it's like a real, it's like. Will we have to shift our perception of like, like what is a good quality plastic product? Is it no longer this smooth something thing? Is it something that comes from a A 3D printer? Are we gonna have to innovate with things that we can, we can actually produce on our own?
[00:31:37] Azhelle Wade: Like in our home, she's running like 11 3D printers out of our home right now and has plans to like quadruple them in the next couple, couple years 'cause it's going so well. Um, and. I don't know, like unfor, what I'm, what I'm seeing is gonna have to happen is like maybe we need to intro, introduce one or two SKUs that can be our higher margin SKUs that we can produce locally to keep our businesses afloat until maybe these tariffs go away or until, just so that we have like a backup, even if we're not gonna shift all of the production there.
[00:32:07] Azhelle Wade: Michael said a bottle of 3D printing fluid costs about $40. And if people hollow out prints and save money, they can crack open and expose people to toxic chemicals. So she is using a printer called Bamboo and it has like a filament cable. So what they did is they printed samples and sent it for safety testing and had it passed safety testing.
[00:32:27] Azhelle Wade: Um, so I, you know, I don't know, I haven't done that safety test and it's like a filament, like on a, it almost looks like a spool. It's spool, iss a filament, and I think each spool was like 24. But if you have any more follow up on that, Michael, please share. Oh, I'm sorry. Re oh, resin print. Okay. Thank you.
[00:32:41] Azhelle Wade: Thanks Michael.
[00:32:42] Robin: And what were you gonna say, Robin? Well, here is the thing, is that this reset, you know, I mean, everybody's gone to China because it's so much cheaper. And I asked my grandson, oh, where'd you get your shirt? China? You know, because we're so used to cheap, we're so used to cheap and whatever under undercuts went under ever undercuts.
[00:33:02] Robin: Our daughters are making more money than, I mean, they're making more money in their jobs. And I know that's not true for everybody, but when you have the service industry making $15 an hour, what is this going to look like when we are not having, you know, when people are all of a sudden going, wait a minute, you know Samantha, I can do your dolls for you.
[00:33:21] Robin: And it's going to be cost more to be manufactured in the United States because those people who have their. Those factories are needing to feed their families as well. But I think we have no choice other than to have a good attitude to think around this and be creative and think, how can we hold our heads up high and say, yeah, this has happened.
[00:33:45] Robin: The coffee is now $7, you know, it's water and a bean, you know, and, and we're worth it. We're worth this because this is what we do. And we're also not gonna have China sending all their competitive stuff through ev at, you know, ad nauseum. So that's the only thing that I'm thinking is that, um, we do it.
[00:34:08] Azhelle Wade: What I'll say is, I think it's, and I want Carter to speak up and share his point after I say this. 'cause he just put a point in the chat. What I think is like, it's a very different model when you can sell someone, let's say this, this little fidget ax a lot for $50 than when you sell it for 10. 10 is like.
[00:34:29] Azhelle Wade: Maybe the value of how many times you'll actually play with it and the joy it'll actually bring you and what it is worth in the grand scheme of paying for your house and your kids' education and your food. $50 is what someone might be willing to pay if they're in love with you as a brand. If you're like a lifestyle brand or you're a famous celebrity and they know you and they wanna be part of your community and they're buying a more of an experience than they're actually buying the product.
[00:34:52] Azhelle Wade: So I think what will happen to the people that will be able to command that higher price is gonna be people that are building a brand that is not primarily about the toy. It's gonna be a brand that's just about the brand itself. And then there's gonna be this subgroup that can afford to manufacture locally really affordably, but the products will definitely look cheaper.
[00:35:13] Azhelle Wade: Or people that will manufacture en mass, like the big companies, will still manufacture en mass, still go to other countries, but they have enough money to build their own factories and then they can eat the struggle to build up new infrastructure and then they can still undercut. The small guy. So I actually feel like it's gonna shift the way that people start independent businesses to being more high end.
[00:35:36] Azhelle Wade: But I think there for board games, I do think there's a potential for manufacturing to shift more in the us But Cardner, I'd love to hear your feedback if you can speak. If not, I'll read it.
[00:35:46] Cartner: Yeah, absolutely. I'm, my expertise is in board games specifically, but a lot of the paper materials like Chipboard Gray Board is not manufactured in the United States to, to, so to get that material to then print on, you will have to import it, which is subject to a tariff.
[00:36:05] Cartner: The printing press itself that does offset printing heidelbergs, are manufactured in Germany, which has a tariff now. So if you want to set up a factory in the United States. You'll need to import machinery and pay a tariff on that. That's already a huge investment. A six seven figure investment for one printing list.
[00:36:21] Cartner: Mm-hmm. If the tariffs are not expected to last the next 18 months, why would anyone do
[00:36:28] Azhelle Wade: that?
[00:36:28] Cartner: Right.
[00:36:28] Azhelle Wade: That's a great point.
[00:36:29] Cartner: Thank
[00:36:30] Azhelle Wade: you so much. I, I don't know, partner, I'm like wondering if the, there's like a bigger play here. I'm wondering if, I mean, I'm sure everybody else is wondering the same thing. The bigger play being, we're gonna put these tariffs in place just enough to cripple who we wanna cripple, and as soon as they're crippled and they're out of the game, we're gonna come back in, reduce it.
[00:36:46] Azhelle Wade: And then, I don't know,
[00:36:48] Cartner: it's very hard to say it. The, the stated intention is to increase United States manufacturing, but if there is no guarantee about what will happen in the next two weeks, let alone the next two years. Right. I can see how that's a viable business model for anyone to start a manufacturing facility.
[00:37:04] Azhelle Wade: Exactly. Like if we really wanted to increase manufacturing in the us there would be some sort of government program of, okay, we're literally setting up factories and all you have to do is move your stuff here and that's how we're gonna bring manufacturing back to the us. Stephanie, you keep popping your hand up and then it goes away.
[00:37:18] Azhelle Wade: Do you wanna share something?
[00:37:19] Stephanie: Sure. I had, I'm thinking about what we're talking about and an earlier question that may not even be a great question. Now it's more on like the pulse. Mm-hmm. My question was, do you think American manufacturers are going to accommodate this issue with lowering prices for creators and deals, or are they gonna try to price gouge and take further advantage of the situation?
[00:37:40] Stephanie: And then I was, you know, doing some research as we're talking and, and just everyone's saying that American manufacturing cannot handle it right now for many reasons. Mm-hmm. And that makes sense. So what do we do? I'm thinking, one, everyone's wondering how permanent things are gonna be in place. To whether, you know, pop-up manufacturing will then change the lifespan or the quality of products.
[00:38:02] Hmm.
[00:38:03] Stephanie: It's just, it's so many unknowns. So I think a really bigger picture here, which is what I ended up just posting in the chat, is that even if like all the tariffs go away, within two years, the damage of economic trust between countries will have been done. And so whether what that fallout looks like, whether it has that financial tariff to it or not, is what is concerning me.
[00:38:26] Stephanie: I was really interested in your email when you sent this out aal, because you said, you know, if you haven't launched yet, you might be in the best position. I'm wondering, is that the case? Am I in the best position if I haven't launched yet? Because how do I know whether, okay, I'm gonna start pursuing an American manufacturer and then like it's, it's too costly or it can't handle it, or I don't have the funds for that and then I.
[00:38:49] Stephanie: All of China comes back and then I'm out. So I don't really know if that's, I do what position I'm in.
[00:38:56] Azhelle Wade: Yeah, I mean, I, I'm open to hearing anybody else's opinion, but what Stephanie's talking about is an email I sent out that said, if you haven't launched your toy yet, you're in the best position. And I believe that as an independent business owner, because you have kind of a, a, a wider breadth of perspective than everybody else that already launched or already paid an invoice and is waiting for it to hit the water, you're not gonna have the surprise $9,000 bill coming to you for, for those fees and not having been able to price correctly for it.
[00:39:24] Azhelle Wade: Now we know even more how important having a reasonable margin is. I know so many people when they start coming through TCA and working with me, they're like, oh, I'm just gonna do like a 50% margin direct to consumer. And had you had that margin now launched, put it on the water, the tariffs will destroy it.
[00:39:42] Azhelle Wade: So I, that's why I think you're in a better position. It's not gonna feel better 'cause now one, you have to wait, but you also have to do a ton more research and you might have to build your own plan. Like the last product business that I launched with my own money was a clothing company and I didn't want to produce in China just 'cause I work with China all day.
[00:40:01] Azhelle Wade: And I was like, I don't wanna do it again. So at the time I was working at Toys Rust and I was like, I don't want to do this. So I launched in the US and I had to find. Just random people who, like I interviewed and I went to see their studio spaces and I, I found some small factories in Philadelphia that like, I couldn't meet their minimums.
[00:40:21] Azhelle Wade: And it was a lot of work. And then at the time, the cost was so high that the business became unsustainable because people didn't think the product was worth that cost. Um, but today that price would've been, you know, like completely reasonable. And so I think this gives you time to sit back and say, okay, what is important to me if worst case scenario happens and my cost goes up this high, how will I survive?
[00:40:46] Azhelle Wade: Like, you have more perspective to plan around. That's why I believe it's a great opportunity. Plus, okay, whenever there is a down season, we know that like small ships can rise to the top. So like there's also opportunity created with all of this fallout. So there's people that will want things with all of these companies closing.
[00:41:03] Azhelle Wade: So there's that opportunity too. But I'd love to hear anybody else's opinion on that. Like, are you in a better position if you haven't launched yet? Versus. If you're in the middle of launching with all this going on,
[00:41:13] Robin: Michelle, so what do you think is going to happen with the toy companies with like licensing?
[00:41:18] Robin: I mean, what are the big toy companies saying?
[00:41:21] Azhelle Wade: Yeah, so the big toy companies are cutting back. There's hiring freezes. They're cutting back on expenses already, like they're canceling trips. They're re just reducing, they're preemptively reducing expenses and commitments where they can. I think that when they start getting the bill, that's when we're really gonna know.
[00:41:39] Azhelle Wade: So like six months, I think we're gonna see big changes in six months. I don't wanna like put negative energy and thoughts into the air, but like I would predict product lines being cut maybe by a quarter and then people would get cut because they're, they might cut entire brands. If they aren't performing well, they might cut.
[00:41:58] Azhelle Wade: Um, a quarter of the products from brands and have less, let's say, project managers on those brands. I think they could shift a lot of people to freelance versus full time. And then licensing, you know, everyone's saying what people are, the talk in the industry is that they're gonna reduce inventor percentages, not the talk from like the toy companies themselves.
[00:42:18] Azhelle Wade: But that's what talk I've been hearing from agents that they're predicting the toy companies are gonna reduce the royalties they're offering. But I, I don't know.
[00:42:24] Dianne: I think for the larger toy companies, sorry, just talking. Yeah, go for it. Me. Is that because my company has sells into both Target and Walmart?
[00:42:33] Dianne: We are just at a second shipping, maybe have left before the ninth. Our, uh, target fall set. So we already have agreed pricing with Target,
[00:42:44] Azhelle Wade: right?
[00:42:44] Dianne: And so from last week till now, there's now a 54% tariff that's going to come in place. So that's the discussion in my company today is the pushback from the bigger retailers are that they were not the 20%, they were not going to have any discussions.
[00:43:04] Dianne: So all the like post toy fair, uh, conversations were, Walmart and Target will not gonna discuss raising prices. They're gonna have to at this point. And how that happens when we have products on the water.
[00:43:17] Or that
[00:43:18] Dianne: sets for fall is just kind of an unknown that our sales team are not dealing with. Right. Oh,
[00:43:23] Azhelle Wade: you said are not dealing with, or now they, they
[00:43:25] Dianne: are now just like today trying to get conversations with people.
[00:43:30] Dianne: Wow. Um, with the buyers. So like how, like I think that, going back to your original question, to not have that like set pricing for fall already agreed with a retailer and being new, um, not launched yet, gives you some little bit of time to see what's gonna happen.
[00:43:47] Azhelle Wade: Mm-hmm. In my interview with Mike Searles, he said something, so he said something about pricing, he said.
[00:43:53] Azhelle Wade: He thinks retailers are gonna have to give up that whole number pricing that they love so much.
[00:43:58] Dianne: Yeah. And the, and the, the feedback from our team also is that the retailers are also kind of planning a little bit ahead for potential recession.
[00:44:07] Hmm. And
[00:44:07] Dianne: looking like pressing us for like price points of more in the 15 to $20.
[00:44:13] Dianne: Yes,
[00:44:14] Azhelle Wade: yes, yes, I did hear that. Yeah.
[00:44:15] Dianne: Right. So that's something also like, and maybe that's an opportunity, but not really
[00:44:21] Azhelle Wade: well, because like
[00:44:22] Dianne: what's the profit on those lower? Yeah,
[00:44:23] Azhelle Wade: exactly. Mm-hmm. Anybody else have any comments or questions to bring up? Wait, hold on. I, do you see something, oh, go ahead. Sorry.
[00:44:30] Stephanie: Could you, could you clarify for me, like the 15 to 20 was, is that compared to higher price items or lower price items? What? What was that?
[00:44:38] Dianne: They're looking for 15 to $20 price points for games, very specifically. Okay. They're looking like, you know, most games if, if it's more than just a card game, you try to hit the 24 and above, but they're really looking for the, a lower price point to hit between $15 and like 20 is 'cause they're seeing that their customers are gonna have less money in their pocket now, you know, games and toys Didn't, you know, during the, um, COVID, you know, games took off, right?
[00:45:09] Dianne: Like, did you think about the, what Target looked like before 2020? I know, like the game section has, my company totally like, was thriving, so there's a lot of opportunity, but it's, when you look at the cost of it.
[00:45:22] Hmm. You
[00:45:23] Dianne: know, so like what I'm doing is like, okay, so maybe we can make a game. But instead of making like 300 GSM card, we might look at two 50 GSM card.
[00:45:32] Dianne: Mm-hmm. That's what I've been hearing a lot of, like how the larger companies are gonna look at the actual specs and like saving pennies.
[00:45:39] Azhelle Wade: Yeah. But it's like not enough.
[00:45:41] Dianne: No, it's not. Well it's
[00:45:42] Azhelle Wade: almost like a joke. You're No, it's, yes. It's almost like, I'm actually surprised 'cause I'd heard the $20 price point, but I was surprised it was not lower.
[00:45:54] Azhelle Wade: Like more like CS spot programs more like that they were looking for. So I'm surprised that you're not hearing lower.
[00:46:00] Dianne: I also have a comment just we were talking about domestic manufacturing. Yeah. So I've been around for a very long time and I've worked in a lot of different companies and so very specifically, I have a card game that's 150 cards.
[00:46:12] Okay. I
[00:46:12] Dianne: priced this out around the world last year. Uhhuh during this was coming. So I pay like a dollar for this in China.
[00:46:18] Azhelle Wade: Okay.
[00:46:19] Dianne: In the US in North Carolina. For a large company orally this costs $3 and 10 cents. So I'd have to have 300%, I mean, like what tariffs would be in place need to be in place to make this cheaper to be done in the US at a factory that does Wizards of the Coast and Pokemon.
[00:46:39] Dianne: So, and even India was like double the cost and with volumes of like a quarter of a million. Um, and my, oh my gosh, you know, this was, I was pricing this at like a hundred thousand. So your volumes have to be huge for us.
[00:46:53] Azhelle Wade: Wait, so you priced that at $3 for how much? How many units? A
[00:46:57] Dianne: hundred thousand.
[00:46:58] Azhelle Wade: Holy shit.
[00:46:59] Dianne: And even at that, it was like changing. You have to be like mechanical and trying to change some of the things. And so it's just really like domestic is really not viable for things that require any level of touching in my experience. And
[00:47:11] Azhelle Wade: especially if you don't, if you wanna sell to retail, like if, unless you're, if you're gonna go direct to consumer, you have a little bit, you have more space.
[00:47:17] Azhelle Wade: But if you're gonna go to retail,
[00:47:18] Stephanie: thank you so much for that. That was helpful. Yeah.
[00:47:21] Azhelle Wade: You brought up another point.
[00:47:23] Stephanie: Did it have to do with Diane's comment about like what level of tariffs would have to be comparable? Yeah. To a 300%. Yep. No, it's gone forever. Okay. Because that, that really stuck out to me. And that's, that's a really good point because even a 54% tariff on China is still cheaper than 300%, and you can get the scale that you need that we cannot produce here.
[00:47:50] Azhelle Wade: Oh, I do remember what I was gonna say. Thank you. Um, well this, this actually goes back to your US comment, Stephanie. You were like, are they gonna take advantage of pri price gouging? Diane, I would love to hear your thoughts on this. I don't think that the US manufacturers would even have to take advantage.
[00:48:06] Dianne: No, they wouldn't have to.
[00:48:07] Azhelle Wade: Yeah. Like if they got a 10th of the clients from that shifting from China to the us, they'll be the big players. They'll order half a million or more and they'll just, to everybody else, they'll say, we're too busy for you. We don't, our minimum is half a million units. Like, that's what they'll say.
[00:48:22] Azhelle Wade: Well, that
[00:48:23] Stephanie: makes competition. Insane. Like, yeah, right. Uhhuh like only singular people can, you know, can manufacture here because the, the competition is just too high.
[00:48:35] Azhelle Wade: Well, that's also why I feel like, like I wonder if the, I mean, and it's hard to say 'cause like, I don't wanna say, I wonder if the future will be this because a part of me thinks this administration will not be forever one and then two, hopefully these tariffs won't be forever.
[00:48:48] Azhelle Wade: But I wonder right now, if the future is looking like independent creators, no matter where you manufacture, you focus on direct to consumer. 'cause that's where you can get 70 to 75% margin. You do not do retail on less. Somehow you get linked with the distributor. That can get you to the numbers that would make retail work.
[00:49:05] Azhelle Wade: Like is it just that mass retail just won't work for independence at this point? Or any, any retail, any, any in between wholesaler will not work. Ed.
[00:49:16] Ed: Oh, were you talking? Sorry. Oh,
[00:49:18] Azhelle Wade: there's two s, two s. Sorry,
[00:49:22] Ed: ed, you go first
[00:49:22] Azhelle Wade: and bond. Yeah,
[00:49:25] Eduardo: sorry, Eduardo. Um, yeah, so, um, I'm in that spot where I have not yet launched my Kickstarter, so I'm just trying to make sure that, um, I'm thinking this through properly.
[00:49:38] Eduardo: So you, it's my game puzzle board, chess, which you may recall. Mm-hmm. And I would make it, uh, by hand here in upstate New York for 45. Do I was selling it for $45 a set.
[00:49:48] Right.
[00:49:48] Eduardo: Uh, I get the quote from, uh, manufacturer in China, uh, that can do it for about $3 a unit. Mm-hmm. And I think with the tariffs that would put it at like $5 a unit.
[00:49:59] Mm.
[00:49:59] Eduardo: So what I am wondering is what the final price should be on that, which, when I'm, like, when I send it out on Kickstarter, I was given a suggestion of 30, keeping it like 35 to $39. A unit and just wondering if that all makes sense.
[00:50:16] Azhelle Wade: I mean, I would like, there's so many other costs to consider, but I mean, honestly with everything going on, if I were launching this, I would probably, even though 45 for a game is a ridiculous price point, if I've been selling it at that price point, I would keep it there and discount it to 39, giving myself room to, if these tariffs continue to rise, to increase it.
[00:50:41] Azhelle Wade: But I mean, if anyone else has a comment on that, I'd love to hear it as well. Yeah, I
[00:50:46] Alex: agree with gel on that one. I, I think you keep it at, keep at 45, discount 39 and keep your margins as as high as you can with the uncertainty that there is in, in the market. Just keep your margins high for sure.
[00:50:59] Stephanie: I also agree because that gives you more regal room.
[00:51:03] Azhelle Wade: Um, Eduardo. Oh,
[00:51:05] Ed: hey. I just wanted to kind of reiterate what Diane was saying. We have a client, educational company who has made traditionally for 60 years their products in the us and then they came to us. We started investigating. We did some other work for them on redesigning some electronics for them and other things.
[00:51:24] Ed: But he just came to, he came to us with just some basic flashcards and just the pricing. He told me his pricing in the US it was $3 and 40 cents for just a small deck of cards, flashcards, and I could go to one of my vendors in, in China and get 'em for 40 cents. Mm-hmm. And so we were just talking that they are having some, the educational spaces even before tariffs, they've been having some issues and so they've had some, a couple of layoffs and other things, but.
[00:51:53] Ed: He said, he said, Gerardo, we might be having some problems paying invoices. You know, it's, it is one of those things where it's like they're waiting for some of the school districts, districts to do reordering, you know, for the following year. So they, they're in that cash flow conundrum right now. But he said, you're the ones that we pay and that we, and that we keep on working with because you're saving us hundreds of thousands of dollars because they were continuing to go and manufacture traditionally in the us, which I totally appreciate and totally advocate, but you just can't sustain that if you're trying to really make some better margins.
[00:52:25] Ed: And now with the tariffs and everything, I know he's worried about it, but even with the tariffs and shipping and everything, and he's air freighting a couple of things in and things to that effect, he's still making more than what if he did than if he did it in the us. Mm-hmm. So you just can't beat that.
[00:52:38] Ed: And the quality's there. I mean, of course we wouldn't be advocating this if the quality wasn't there, et cetera, et cetera. So, you know, a lot of different things at play of course, but I just wanted to kind of, you know, give, give you our, um, you know, our experiences from the other side of the equation also, you know, in helping clients.
[00:52:55] Ed: And it's just, it's crazy as much as we would love to try to, you know, uh, find better places to manufacture in the us. It's, we're just not finding it. And this whole idea of bringing manufacturing back to the us I applaud. I I love the idea, but it's going to take years. It's not something that will just
[00:53:13] Azhelle Wade: talk decade, maybe a decade.
[00:53:14] Azhelle Wade: Yeah.
[00:53:15] Ed: Yeah. Exactly. Exactly.
[00:53:16] Azhelle Wade: Uh, Julie just shared in the chat when she reached out to a US printer last year. They told her it would be three weeks to get a quote. And it was four times China prices. I mean, I would agree. I'm actually working with a TCR who's doing like a, a fort that's based out of cardboard and she's quoting China and US and the US company.
[00:53:33] Azhelle Wade: She's like, they just haven't responded to me. And I was like, oh, no, no. It just takes longer. And they've responded like two months later with like, prices that are like three times the price of China
[00:53:43] Robin: Azhelle. Can I say something? Yeah, yeah, yeah. I started this whole thing about the. USA, you know, it's just like the fashion industry, you know?
[00:53:52] Robin: What did the fa I don't know. I'm older, so I know. I remember, remember New York and Dallas where all the fashion was made, the designers were here, the fashion, you know, were here and all the knockoffs came from
[00:54:05] China
[00:54:05] Robin: came in, but they still held their own, or it's just like a farm, just like farmers I live in, just outside of Dallas.
[00:54:12] Robin: And so what's happened is they've, you know, they run huge campaigns about, made in the USA, made in the USA Buy from America. Buy from America. And everybody went to China, you know, to undercut, to un to well, because it was cheaper. It was just cheaper, but yeah. You know, you don't wanna necessarily live in China and, and there's a reason you don't wanna live in China.
[00:54:36] Robin: And so what's happened is these manufacturers have had to, and these cutters and sewers, you know, um, these designers have had to shut down and do something different because the American consumer didn't back them up. And so now all of a sudden, yes, I know that there are families out there who were shut down.
[00:54:57] Robin: Their businesses were shut down. I'm sorry. But just like farmers, the same thing. You know, we're growing and we're making a difference in the world. And people are like, well, you know, China, they're coming in from China. The food's coming in from all over. And unless you shop at Whole Foods, you're just not willing to.
[00:55:15] Robin: To spend money for, or you know, organic or food that's been taken care of. So I just want to put out there that looking at American manufacturers a little differently and being able maybe as a toy industry or as any industry, to be able to say, Hey, we're now in this position that we are having to do something differently.
[00:55:39] Robin: What, you know, what do something different? What does this look like? What would this look like if the toy industry came back? The fashion industry came back.
[00:55:48] Azhelle Wade: I mean, I remember when I launched my fashion company and I would use maiden USA as the thing, and I was like, oh, everyone's gonna love that. They didn't care.
[00:55:55] Azhelle Wade: I literally would get comments on my Facebook ad saying like, a hundred dollars for sequin. Legging. Yeah, that's right. Ridiculous. That's right. But they're gonna,
[00:56:04] Robin: anyway. They're going to, now what, what choice do they have? What choice do they have? You know, well,
[00:56:10] Azhelle Wade: I mean, they're just not gonna, they're just not.
[00:56:13] Azhelle Wade: But I do, so what I think might happen is I think startup companies will have to go, I think startup companies could potentially start here, but they'll have to have a very strong following, like celebrity status following, or like influencer status following. And they'll order less, they'll make it higher priced and it'll be like limited edition drops.
[00:56:34] Azhelle Wade: And then if a, if a Hasbro, if a Mattel, if a jazz wears seizure brand and thinks there's something there. They will either buy it outright and move all the manufacturing to another country, or they'll say, we'll distribute it and then they'll be re, they'll actually, uh, you'll might form a distribution deal where they're gonna manufacture it somewhere else.
[00:56:52] Azhelle Wade: 'cause they're not gonna, they're not gonna leave money on the table. They're just not, if it's $5 a unit, they're not gonna leave $5 unit on the table just to like,
[00:57:00] Robin: keep manufacturing debt before. But that extra money goes, you know, goes into the, um, into the economy right here. So the people will Yeah.
[00:57:09] Azhelle Wade: But they, even if they did, even if they said, you know what, we wanna help build the economy.
[00:57:14] Azhelle Wade: They would have to build such huge complexes to support the production. There would be no room for small manufacturers to build in the US anyway. They would take over everything. They, it wouldn't, right. I mean, it would, it just, I, I don't know. I'm, I'm just, yeah.
[00:57:28] Robin: I mean, this is
[00:57:28] Azhelle Wade: the
[00:57:28] Robin: thought process that I
[00:57:30] Dianne: Yeah, yeah.
[00:57:30] Dianne: Yeah. I think you're right because like manufacturing in China for toy, using toys very specifically. Yeah. Yeah. That moved in the late seventies. Right, right. Yeah. So we're talking like decades. Decades to where if anybody who, I'm sure some people here have been to China. Yeah. Like you, you have a plastic manufacturer and you get the eyes down the street and you get the Yeah.
[00:57:52] Dianne: Down the street and you get all these things and the quality of the work. I think we talked about this before, like to replicate that at any wing in the us like you are looking 10, 15, 20 years. Yeah. Because we have decades.
[00:58:07] Azhelle Wade: And the labor laws. And the labor cost is the other issue. 'cause they can work so much longer and their labor cost is, I mean, I haven't checked it in a long time.
[00:58:16] Azhelle Wade: Last time I checked it was like four or $5. So I don't know if it's still that, but yeah, there's that too. Right.
[00:58:22] Stephanie: I'm thinking about scale and kind of the fact that we live in a global economy and not right. That, um, it's all well and good and I really, that's actually one of the reasons I haven't launched yet, because I've always been personally averse to just taking all production to China.
[00:58:38] Stephanie: And that's just my personal opinion. And I have wanted, I have wanted there to be means for me to do something in the US or nearby the us like Mexico or Canada or something. Mm-hmm. But being of immigrant parents, I'm like, I actually really believe in the American economy, but it, it just doesn't seem viable without causing massive reception recession in such a way that by the time we try to bring the scale of manufacturing back over, I mean, it's all just gonna be kind of wiped out.
[00:59:08] Stephanie: Wiped out. Yeah. Um, it's just gonna be wiped out. So there like, where's the middle ground here of conversation between, okay, now we're highlighting the fact that so much manufacturing has moved to China and other places, and that has kind of like left. Our economy and manufacturing behind here, but, uh, we have gained strength in other ways mm-hmm.
[00:59:30] Stephanie: That have, so we've already pivoted as a country. Mm-hmm. So to go back to trying to be like in the industrial era makes no sense to me because we already pivoted.
[00:59:41] Azhelle Wade: Yeah. No, that's good. I know.
[00:59:43] Stephanie: What do we do? Like, I want, I want my game to be manufactured here. Mm-hmm. With, with 80 little chips, it's basically like you were saying with the card game.
[00:59:52] Stephanie: Mm-hmm. But I don't want it to cost $8 to manufacture. Right. And then. Sell at 12. Like, you know, I mean there
[00:59:59] Azhelle Wade: is, I want us, I mean I, we do have to close out soon and I appreciate everyone for coming, but there are a couple companies that are manufactured in the US and there's just limitations that those companies accept.
[01:00:10] Azhelle Wade: So, crazy Errands, for example, is one, he manufactured everything in the us. He literally built his own factories in Philadelphia, I believe. But the limit he has is literally everything he does has to fit in this tin. So like he's so limited by what he can do. However, in times like this, he is like the winner, right?
[01:00:29] Azhelle Wade: Like he's manufactured in the us. So I think what's gonna happen is things like that. Like we're gonna have to say, okay, my dream version of gens is this, but what's the version I can do in the US that's like good for now that's gonna get us off of our feet. I'm always,
[01:00:44] Stephanie: I'm always thinking that way too.
[01:00:45] Stephanie: Right? You know? Right.
[01:00:46] Azhelle Wade: Yeah. Yeah. So that might be the answer for right now. And then sometimes
[01:00:50] Stephanie: need causes innovation and we may just have to innovate to. Make do with what America can handle. But I'm, I guess for me personally, what it looks like is just much longer term goals. Yeah.
[01:01:03] Yeah. I really, I've
[01:01:04] Stephanie: just immediately extended my goals by five years because I'm going, yeah, this makes no sense now.
[01:01:10] Stephanie: And that's with knowing that maybe there will end up being some middle ground. But my fear, as I mentioned before, is I wait five years. I enter the American market, I manufacture in America, and then suddenly everything moves back to China again, and I'm wiped out after all that it could happen.
[01:01:26] Azhelle Wade: You can always shift though.
[01:01:27] Azhelle Wade: I mean like you could always shift if, if right now, like China's, I don't know if tar, I don't know. Like if costs went 10 x in the US and then China had zero tariffs, I'm sure crazy errands would be like, oof, guess we have to move to, you know, we just gotta do what we gotta do. So you could always shift.
[01:01:42] Azhelle Wade: So I wouldn't think of it that way. I would think more for you. It's like, okay, this tech combining with this toy, how the heck are we going to get this to a price that people can afford? Right? And that's the real struggle. Thank you so much for showing up. Uh, and this was so great. If you want another one, like email me and let me know.
[01:01:59] Azhelle Wade: This is a fun check-in. I've been thinking about doing more check-ins. Bye everyone. Take care and we'll, we'll get through this. Good luck and hopefully the tariff will go away. Well, there you have it Toy people. That is the toy tariff talk that I hosted April 4th. I hope you enjoyed the recording. We will be posting a video of this to YouTube, so keep an eye out for that.
[01:02:21] Azhelle Wade: Go to youtube.com/thetoycoach. Again, if you're interested in coming to future toy tariff talks, let me know, um, that that's something you'd love to be a part of. If you love this podcast and you want to see it keep going. You can do us an enormous favor by doing one of two things or both things. You can leave us a rating or review wherever you're listening to this podcast.
[01:02:44] Azhelle Wade: Or better yet, you can become a supporter of the show now. This is for toy people only, but for $3 a month, you can show your love for this show and make sure that we can keep bringing the industry together by sharing insights and information. For a link to support this podcast, head over to thetoycoach.com/support.
[01:03:06] Azhelle Wade: Again, it's thetoycoach.com/support. As always, thank you so much for spending this time with me today. I know your time is valuable and that there are a ton of podcasts out there, so it truly means the world to me that you tune into this one. Until next week, I'll see you later toy people.
[01:03:24] Thanks for listening to the Making It In The Toy Industry Podcast with Azhelle Wade.
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