Lessons learned from the launch of a company during prices

Irene Ham, 30, had just paid $ 62,250 in inventory for his new Korean cosmetics brand when President Donald Trump Liberation day prices were announced on April 2.

The shipment had been ordered but had not yet arrived. She said her heart flowed when she learned the news.

“When the prices struck, it was obviously a new emotional for me,” said Ham, who recently launched Poom Cosmetics after working on it for two years, told Business Insider.

Ham said that she had ordered the strict minimum that the South Korean factory would authorize – and even it has pushed its financial limits. Then came the news of a reference rate of 10% and a “reciprocal” rate of 25%, which, according to her, would have prevented her from moving forward with her business. HAM faced the possibility of more than $ 21,000 in additional expenses for the shipment of stocks from South Korea. In addition to this, its product packaging came from China, which was to be affected by a rate rate of 54%.

Because she paid customs before the entry into force of the prices, Ham avoided having to pay the prices on the sending of South Korea. However, she said that the current pricing uncertainty had resulted.

She decided to take a break by launching a new range of products for the face cleaner due to “unforeseen costs”, although she has already finalized the formula, approved it and finished the packaging design with its manufacturer.

Ham said she was told that she had chosen the “worst moment” to start a business. In addition to the prices, the imminent possibility of a ban by Tiktok is a threat to her marketing efforts when she built a suite on the application by documenting her entrepreneurial business.

Despite the challenges, Ham said that after reading prices and learning, they could be used as a negotiation tactic, she realized that the situation was not entirely unhappiness.

“I think that if I started a business when everything was easy, everything was in my favor, then I don’t think I would have resilience to make it last,” said Ham. “So a part of me is actually a little grateful, whether it’s the worst time to start.”

The art of the pivot

Ham said she had initially panicked the newly announced prices. But then, she realized that she would not necessarily have to increase her prices by 25% overall. The manufacturing cost of its foundation would eventually increase the price by $ 3 or $ 4 per bottle.

“”So adding this to the price instead of making it a huge increase in astronomical number, “said Ham, adding that he was more manageable.

HAM also realized that it could survive without obtaining packaging equipment such as boxes and logo stickers from China, so it began to study American suppliers like Uline and Sticker Mule, which did not increase their prices.

Although this meant that its products do not seem as refined or made to measure as originally planned, she said that sacrifices were necessary if it did not want customers to pay even more.

There was even an advantage of making the change. HAM said that the execution time is faster and that there is no bulk order requirement.

Have more confident in negotiations

Following navigation on the pricing impact, Ham told Bi that she had gained confidence in negotiations with manufacturers, in particular on the minimum quantities of order.

Ham said that some factories require 5,000 to 10,000 units per color per product per product, which leads to a high amount of order and a global price.

“In future orders, I plan to negotiate this to a number that seems right for me and the manufacturer,” said Ham.

The next time she will negotiate a new order, she will be able to test her theory – according to which manufacturers could be more understanding and open to negotiations, taking into account the changes that occur in the United States.

Keep the costs

After first thinking that she had to pay an additional thousands of dollars after spending her savings on her first inventory lot, Ham said she had learned to reduce expenses wherever she can.

“”I was very thin on my start -up costs because of the prices, “said HAM, adding that she is looking for ways to keep healthy product margins so that she can” better absorb future curves “.

For example, Ham said she had to pay her Shopify account every month if she wanted to have a pre -order application. She decided that she just didn’t want these expenses to increase.

Now, each time she feels tempted to spend more on personalized packaging or other extras, she wonders if it will lead to more sales or if it is only a “vanity metric”.

This state of mind helps him to make more profitable decisions, she said.