Trump’s trade tariffs have now been in place for six months. This has created an air of apprehension as small businesses across the country are still unsure which duties will stick. Many are adjusting supply chains and reworking prices to deal with the changes. Shark Tank judge, Daymond shared some tips to survive raising tariffs. In this article, let us have a look at Daymond John’s tariffs tips.
Shark Tank’s Daymond John has firsthand experience with supply chain struggles. He often points to it as the toughest obstacle he faced while building his clothing brand FUBU.
Daymond recently discussed the issue with a founder he invested in on the show, offering his two cents on managing the challenges brought by the latest tariffs.
Daymond’s Tips on Navigating Trump’s Tariffs
Appearing at Alibaba.com’s CoCreate conference in Las Vegas, here is what Daymond had to say about business in the current geopolitical climate:
1. Balancing Tariffs With Smarter Business Decisions
Trump has turned to the Supreme Court to defend his authority to keep the tariffs in place. Many small business owners struggling with the added costs may hope the courts will step in, but John says waiting for policy changes isn’t an option.
John says business owners need to account for tariffs right away. That could mean pushing for better terms with manufacturers or cutting back on other expenses to balance the hit.
Your buyers need to know what kind of financial strain the business is facing and why certain changes, like pulling back from retail locations, might be necessary.
2. Knowing What Your Customers Truly Care About
John believes the smart way to handle tariffs is by watching customer behavior closely and adjusting to fit it. He comments on the same, saying, “I’m not sure Louis Vuitton is going to have the same problems that a more price-sensitive product will have.”
The point at hand is the risk of raising prices when a rival with cheaper sourcing can offer a better deal. In that situation, understanding whether your customers value quality or just want the lowest cost becomes very important.
3. Using Technology to Work Smarter, Not Harder
New advances in AI are giving business owners more options, whether they’re looking for suppliers or finding better ways to reach customers.
John elucidated on his own struggles: “I used to have to literally go into China and meet with a whole bunch of trading people and wonder what was going on. I didn’t have the ability to be agile and use things like Alibaba and AI, or to really source information and all these companies.”
4. Don’t Put All Your Eggs in One Basket
Diversifying your approach is smart in any situation. But it’s especially crucial when the market is as unpredictable and unstable as it is today.
Expanding on that, Daymond says, “If you’re putting all [your] eggs in one basket, you’re in trouble. Things could be going absolutely great: you’re making it in Turkey, and it’s going great. At the same time, you have to be trying India, you have to be trying China, you have to be trying the United States, you have to be trying Mexico.”
The Shark Tank investor advises mixing up production approaches. One way is to manufacture parts separately and source them from different vendors.
5. The Entrepreneur’s Mindset on Overcoming Challenges
Tariffs can feel overwhelming for new business owners. The way to go about it is resilience and perseverance, as cliché as that sounds. According to Daymond, dealing with these challenges is part of business life. Policies and politicians change, but the need to adapt remains.
When building FUBU, Daymond John also had to constantly adjust his manufacturing. They had initially started in Guatemala and Korea, then Turkey and India, followed by China, and more recently Vietnam, Mexico, and the U.S.
“We’ll deal with this like every other entrepreneur has, because entrepreneurs are the ones who are going to—no matter what—solve these problems and figure it out. That’s why we got into business, was to solve problems and figure it out,” says Daymond with a ray of hope and enthusiasm.
Adapting to Change for Lasting Success
At the end of the day, tariffs are just one of many obstacles that entrepreneurs will face in the course of building a business.
Daymond John’s message is simple, i.e, tariffs may raise costs momentarily, but that does not mean they have to sink a business permanently. Cultivating the flexibility to overcome market hindrances is what ensures long-term success. Those who leverage technology will be better equipped to ride out uncertainty.
No one can predict how long political trade wars will last, but today’s turbulence could be tomorrow’s advantage. Resilience and adaptability will make today’s start-ups into tomorrow’s Fortune 500s and household names.
It will be the difference between those who will survive the winds of politics-influenced trades and those who won’t (although Kevin O’Leary says you don’t need to be political in your business, but that’s another story).
