Paying the Price: Small Businesses in the Age of Tariffs
When we hear about tariffs, the conversation often revolves around nations, trade deals, and billion-dollar industries. But beneath those headlines, there’s a quieter story unfolding—one that affects the smallest players in the economy. For most small businesses, tariffs aren't just abstract policy tools—they're real costs that can make or break a month’s bottom line. From sourcing materials to setting prices, these added trade barriers ripple through operations in ways that are often overlooked but deeply felt.
Feeling confused?? You’re not alone. Immediately following the election in November one of the top Google searches was “what are tariffs”. Searches for “who pays tariffs” have risen 350 per cent since the election. The world economy is interconnected and rarely straightforward. However, how tariffs impact consumers can be explained quite simply. Tariffs are taxes on imported goods, and they’re usually paid by the importer—often a business in the country receiving the goods. That cost usually isn’t absorbed by the business; instead, it gets passed down the line to consumers in the form of higher prices, or to small businesses who rely on those goods to make their own products. So while the tariff is technically paid at the border, the real cost often lands on local businesses and shoppers.
Like most US products - “Made in America” is kind of a misnomer. From cars to computers the items we buy are largely manufactured using parts and pieces from all over the world. Even the packaging - the cardboard, the labels, the containers etc. are often imported into the United States from foreign exporters. This is not to say all US goods, but far more than we realize. Even your favorite California wine has to order corks from Portugal and Spain where they are largely produced.
Here at Anthologie Soap Co., a small business in the handmade soap and cosmetic industry, we strive to create ‘exclusive’ luxury bath and body products that are still ‘inclusive’ for all budgets. Our loyal customers range anywhere from six-figure earners, with plenty of disposable income, to frugal folks living modestly on restrictive budgets where every dollar is spent carefully. In order to accomplish this we must control our operating expenses, marketing and advertising dollars, and the costs of our raw materials. Thankfully our dedicated customers take care of a lot of the advertising for us. It is their referrals and positive reviews that spread the word. We wouldn’t be here today if not for their constant support. Additionally, in January 2025 we pivoted to an e-commerce model and made the tough decision to close our brick and mortar retail store. While necessary to control overhead costs - we were all saddened to see it go. However, raw materials - our soap ingredients are subject to supply chain disruptions and the market price being drastically impacted by US tariffs.
Let’s break down some of the main ingredients in our soaps and other products to see how the price of raw materials affect “COGs” - the cost of goods.
- Olive Oil - primarily sourced in European countries such as Spain and Italy
- Coconut Oil - primarily sourced in Indonesia and Philippines
- Castor Oil - primarily sourced in Brazil
- Sunflower Oil - primarily sourced in Ukraine
- Shea Butter - primarily sourced in West Africa
- Cocoa Butter - primarily sourced in Indonesia
- Essential Oils - primarily sourced in India
In addition to these ingredients - the majority of our boxes, packaging supplies, labels, printer ink, and the printer itself are primarily manufactured outside the United States. That is not to say all materials are imported. Lard is one ingredient that is readily available and ethically sourced right here at home. And while, yes - there are several American distributors of packaging materials - their minimum order amounts and prices are not conducive with small business needs. Full transparency here, China is the leading source for affordable packaging and value added items that a lot of small businesses, including ours, rely on heavily to keep prices affordable.
Consumer confusion is at an all time high. Trade markets, tariffs, and the overall economic chaos caused by the current administration has put the whole world on its head. In the end, when all the dust settles, one thing remains true. Tariffs are taxes placed on foreign imports and ultimately passed down to the consumer making the costs of goods increase. Many wholesalers at retailers alike have already raised their prices to compensate.
We made a promise to our customers at the beginning of 2025 that we would not raise our prices and we intend to keep that promise - even if that means decreasing our own profit margin. In fact, by keeping our prices steady we are rebuking the trend in which some companies inflate prices disproportionately to further increase their profits. We find that practice to be predatory and unethical. To that, and it should be no surprise, there will be some changes moving forward. You may see different packaging as we search for affordable alternatives. We are looking at cutting back or eliminating some lesser popular products. Across the board we are scaling back our retail production. This may limit the supply on hand of your favorite items. To further cut costs we are pulling back on some of the craft shows and vendor events we have historically attended the past several years.
According to the Consumer Confidence Index there has been a significant drop in consumer sentiment including a survey that found 59% of Americans report they are cutting back on spending. We get it!! We are all in this together! While the overall economic outlook is uncertain…rest assured that your confidence in Anthologie Soap Co. has not gone unnoticed.
We want to extend our heartfelt thanks for your continued support during these challenging times. Your loyalty, patience, and encouragement have meant more than words can express. Small businesses like ours don’t survive without a strong community—and we’re incredibly grateful to have you as part of ours.
Thank you for believing in us. We look forward to continuing to serve you.
With appreciation,
Anthologie Soap Co.