I get questions every day about how tariffs will affect my business. It's a hard question to answer, in part because the situation has been so unpredictable and chaotic. It's one thing one day and entirely different the next day.
But we're starting to understand that the tariffs on most imported goods are going to be very high.
The yarn business is, at its heart, an agricultural business. The kinds of yarns I carry are mostly natural fibers, whether from plant or animal sources. By their nature, many of these raw materials cannot be produced in the United States. So, much like bananas and coffee, most yarns produced for the hand knitting and crochet industry are either imported from their natural growth locations or can only be produced in smaller quantities and at very high prices in the United States. For comparison, look at a bag of Columbian coffee and compare it to the price of Kona coffee from Hawaii. Yes, the Kona is grown in the United States, but only small amounts of this quite luxurious coffee can be produced in Hawaii, and it's not feasible to increase that production level dramatically. We will end up paying more for Columbian coffee with tariffs because it will still be less expensive than Kona coffee from Hawaii.
Almost all of my yarn is purchased from American-owned businesses and it ships to me from American warehouses, but the materials come from all over the world. South American alpaca, Egyptian and Israeli cotton, New Zealand merino wool, Chinese and Indian silk, Mongolian Cashmere -- all of the fibers come from many places, most of which are not the United States. The major milling operations, which turn raw fibers into yarns, are located in South America, Italy, Germany -- places outside the United States. It would take generations to build a fiber production and milling industry in the US, not just a few years, and STILL some of these fibers will never be produced here due to the agricultural factors at play. Some critters and some plants just don't thrive here.
So what am I going to do? I'm scheduled to head to the major industry trade show in a few weeks, and I'm really struggling to plan ahead for a year that is likely to contain tariffs of 30% to over 100% for many of my major product lines.
I'll certainly have to purchase less for Fall. I've always been proud of my deep inventory and always want to have something for everybody, whether it's a non-super wash fingering weight or a hand-dyed superwash chunky weight, with everything in between. But for Fall, I'm going to have to pull back and focus on the best-selling lines I can with the lowest tariffs. It's hard to predict what that will be, but I've been working through the tariff lists as much as I can in the chaotic, uncertain situation we're in to try and figure out which lines are most likely to have the lowest increases in price.
I'll cut out all direct import lines. Yes, I've enjoyed carrying certain luxury lines, and so have my customers. I've worked very hard over the years to find The Best products and some of those I've imported directly. I'm going to have to find the "next best" products in some of those cases.
I'll hold the line on price increases for as long as I can. The entire first year I was open, I refused to increase my prices, even when my suppliers increased my cost. I ate a full year of price increases. I can't eat these increases, particularly the very high tariff rates, but I can hold the line on a some increases for a while.
I'll keep all of my prices the same on in-stock yarns that I have right now. I won't increase prices just to try to get ahead of tariffs. The price is the price if it's got a tag on it right now. I haven't seen any increases yet, so neither will you.
And finally, I'm going to listen to my customers and pay attention to my sales numbers and try to pivot as you do. The lines and price point that sell well as prices increase are the lines and price points I'll try to expand.
But I need your help in return. I need this community to support Chattanooga Yarn Co. I need you to come here first before you buy on the internet. I need you to tell people about our little shop and our big yarn-loving community. I need you to show up for events and bring a yarn-loving friend. I need you to tell me what kinds of yarns you're looking for. If you don't find what you're looking for, don't snipe on the internet. Tell me what you're looking for.
I need you to support this little local business. Come buy some pre-tariff yarn! Sign up for classes, show up to sit & stitch, but most of all, say good things to friends and family and fellow yarn crafters.
I'll tell you the truth. I believe that Chattanooga Yarn Company is going to get through this tariff mess. I believe that at the end of the 3 year lease I just signed, this little shop is going to still be here and solid. I believe that because you all have believed in me, and I absolutely believe in you. I believe in the power of the community that has held this shop up for three years now and surrounded me, my staff, and this tiny little business with love and support and positivity.
Thank you all so much for being so amazing. We're going to do this thing together!
Addendum: well, the tariffs changed again yesterday. Choas is the only constant.
