Opinion | I invented a popular kitchen gadget. Trump’s prices will kill my business.

I am one of those disjointed entrepreneurs that you see on Kickstarter and “Shark Tank”. Eleven years ago, shortly after starting a job that was a bad fit, I had meetings that changed life with two pan -fried duck breasts. The first created a cataclysmic disorder from my cook. The second, a few weeks later, inspired me to wrap my preventive pan in aluminum foil and create a shield of improvised conical splashes. At the end of the following year, the Frywall sold online and in stores.

The new prices on imports from China and Taiwan (and the threat of additional Chinese prices) are a kick in the teeth of my small family business, forcing me to increase my prices even though my profits are reduced. The government’s promise to reshape the production of simple articles like mine, from where I sit, as something dream of fever.

If you ever decide to start a product in the well-being space, here is a rule to do everything: make sure that the cost of manufacturing your product, including shipping and import costs, is 20% to 25% of your retail price. If these costs are less, consider reducing your sale price. If your production cost is greater than 25% of the retail price suggested by the manufacturer, the management of your business will want to climb a greased pole.

You will find it difficult to allow you the 50% wholesale that the retailers expect. And you will not have the money to finance Amazon costs, advertising, general costs, warehouse space, “free delivery”, legal costs, stock growth and the development of new products. My invention emerged from the moment AHA with duck breast; As a business, it would only stimulate life if and when I found a way to produce it for $ 5, and sold it for $ 25.

Asian suppliers quickly emerged as my only option. I found that the silicone products made in the United States were largely low-volume components and high value for industrial or medical applications. The most competitive American quotes were about $ 20 per unit, which would have meant retail at $ 80. I fantasize about a world where the splashing guards sell $ 80. It does not exist.

The price difference extended to my investment in the first year of start-ups in the molds. This cost me $ 18,000 in Taiwan would have brought me $ 120,000 in the United States, a figure to make an entrepreneur not tested with a product retirement not tested at his office work.

When you hear about an American company making a product abroad for $ 5, it seems that America sends money and simply gets a Doodad in return. In reality, these $ 5 buy us a product plus fuel to supply $ 20 of interior economic activity.

Because the difference of $ 20 between my manufacturing cost and my sale price flows to Americans, American companies and other American entities: Amazon warehouse workers and deliveries that I help to finance thanks to my Amazon seller costs; In Peter, my American postal service parcel carrier; software platforms, such as Google, Intuit and Shipstation, which I use to manage my business; to the independent designer working with me on a new product; to lawyers who protect my patents and my marks; to my advertising and marketing partners; to the chests of the US Treasury, New York State and New York City; And, let’s hope, at the end, also for me and my family. It seems that a horrible fire waste $ 20 in interior economic activity to get $ 5 more.

So here is how my company does cassettes after last week’s Sucker Punch Tariff. The cost of manufacturing my product in China and shipping it to America has gone from my average land cost (total price of the product, more freight abroad plus total import costs) from around $ 5 to around $ 7.50. To stay in the healthy ratio that I have cited, you have to increase the average selling price by at least $ 5, to $ 30, compared to $ 25.

An increase in prices of 20% is that which threatens to slip this product from the field of “a little expensive but which is worth it” in the country of “are you crazy?” The danger seems particularly acute as the price of basic products, such as food and clothing, increase and chew the discretionary budgets of consumers.

While the idea of ​​increasing prices rolls my entrails, my next Asian shipment arrives next month and will already bear the additional rate costs. I would love to keep a decision – maybe the prices will be negotiated – but some of my retail partners require three months notice for price changes. Every day, I await my date of price reset deeper in July.

Oddly, the American government can blur its price policy faster and with less warning than I can not change my retail prices. I am faced with a critical commercial decision and I do not have the minimum level of certainty to do so.

These factors also reduce my plans for a new product launch later this year. With the new prices, the retail price of this product will land 30% more than expected, the gallery of its probability of success.

The chances are now that I will slow things down for a while, to see what’s going on. This would mean the icing of commitment to an American patent lawyer, an American public relations company and an American independent designer. Unfortunately for me, it would also indefinitely mean the pleasure of getting a new product in the world, which is my primordial motivation.

Some commentators would make you believe that importers can amortize the highest price stiffness by negotiating lower prices with their suppliers. It is an attractive idea born of ignorance and divorced reality. The factories in Asia manage from beneficiary margins to a figure. In no universe cannot absorb a significant part of the tariff costs, at least not without radically devaluing their currency or making ruinous sacrifices to the quality of production. Do not be mistaken: tariff costs are paid by consumers in the form of higher prices and by companies in the form of diminished margins and slower sales.

My other option is production on land. I hope it will be possible one day. But the creation of a whole supply chain ex nihilo is complicated, even for a simple product like mine. Standing new contract manufacturers would most likely be the simplest part. More complicated is by far the construction of new chemical factories to make the right type of silicone and new factories to make molds, mold manufacturing equipment, presses and robotics to reduce the cost and the monotony of unskilled work that workers in advanced savings were already happy to release a century ago.

None of this is necessarily impossible. But at least, it requires stable policies, a huge investment and attracting foreign engineers and managers with the expertise and experience that we have not fed in the United States in generations. It is a question of years, even in the most pink scenarios. Companies like mine may not have so long.

I share many Americans nostalgia during a time when we did more things here and bought fewer things and they lasted longer. Who knows, there can be a way to return to a version of this economy. But I can’t watch a watchmaker why take a demolition ball in small businesses must be step 1.