Hey friends! No sugar coating here, it’s a really bad time for artists and small businesses right now with the obnoxious tariffs being placed. We’ve been quiet about the situation due to our optimism that it was all peacocking. Unfortunately seeing fellow companies in the space such as ViteRamen put in a really bad spot (and please go check out what’s going on, Tim is doing an amazing job dealing with the situation and explaining the full ramifications of the tariffs) really hammers home the idiocy of the whole ordeal.
Most of your merch is produced in China in some way, shape or form. Raw materials, packaging, finished products. Which means a 54% and now 104%(Now at the time of posting this 125%) tariff greatly increases all costs associated with providing these products.
What really throws everything out of whack is the continuous instability of the tariffs. 2 days ago we were planning business at 54% tariffs, then 104%, now 125% who knows where we’ll be in 1 week or 1 month. If we do a pre-order drop right now at 125% and then it doubles again before those products land in the US, nearly all profit can be wiped out from that drop. That puts everyone in a rough spot. We want to keep merch as accessible as possible while still providing the fairest payout to our creators while keeping the lights on here.
This is all just looking at the tariffs on China. We source from all over the world for various items. And so do many of our domestic production partners. There will be cascading price increases and instablility all across the board. Just this morning we saw a 90 day pause and walk-back of tariffs against other countries and just a blanket 10% tariff across the board. 10% can be dealt with inside of normal business operations. 125% not quite.
What do we do next?
We’re not giving up though, we’ve been churning on some ideas to keep things going as smoothly as possible. Some of these ideas are a little unprecedented, but we’re working through unprecedented events currently. Our core concept is being challenged by the exploitive powers that be, but we’re sticking it out. Here’s some of our immediate plans:
Continuing Thoughts…
We’ll also be opening a creator centered Discord server so that we can keep everyone updated easier during these rapidly changing times and get quick feedback on our proposed changes. Creators can find access to the server in their Hovercat Account!
We have several more, early stage plans tackling problems such as customers outside of the US, product diversification, manufacturer diversification and creator growth that hopefully we can talk about in the coming days and weeks. Thank you to all of our creators for sticking it out with us as we all tackle this rather troublesome time!
-Logan
