Most Australians have not yet felt the direct impact of the commercial war between the United States and China, which has seen US tariffs on Chinese imports of a 10 percent increase in February 145 percent in April.
Last week he was forced to close the brand’s website in the US. And stop all sales to the United States as a result of the US president, Donald Trump,, eliminating 20 percent of RAQ’s income in the process.
“It eliminates 20 percent of its income that can mean that it is not benefiting at all,” Argyropoulos told 9News.com.au.
Although the brand is owned and operation of Australia and all orders are sent from a warehouse in Melbourne, Raq bikinis are manufactured in China and, therefore, Chinese products are considered when the United States is imported.
That means any request that RAQ sends to the United States is subject to Trump’s tariffs.
Then, when he signed the first executive order that imposed 10 percent tariffs on Chinese products in February, Argyropoulos transmitted the rate to US customers.
Then, when tariffs increased to 20 percent in March, he decided that RAQ would increase prices for US buyers and absorb the cost of rates.
But that tactic was not sustainable: when the tariffs shot at 145 percent on April 9, which meant that a RAQ bikini with a price of $ 95 would incur an additional rate of $ 137.75.
The absorption of the cost of the import rates of 145 percent would completely eliminate the revenues of the brand and there is no way that American customers of RAQ are willing to pay additional $ 140 in addition to an upper bikini part of almost $ 100.
Argyropoulos only saw an option for the brand.
“I made the call at that time to turn off our US website. We lost 20 percent of our sales,” he said.
“We are barely obtaining profits as it is, given the crisis of the cost of living and people who cannot spend so much, in addition to costs shooting a business.”
But close the RAQ website in the United States and stop all US orders. UU. It has raised new challenges for small business.
Swimwear is a seasonal and RAQ industry is generally based on orders from the USA to overcome the freshest winter months when Australians do not buy bikinis.
With winter less than two months away, tariffs that forced Argyropoulos to withdraw from the US market could not have arrived at the worse time.
“Our business model is based on the fact that we pivot the United States at this time of year to generate a cash flow to pay our production for the next season in Australia,” said Argyropoulos.
“So we literally turn off that touch.”
Cancel American marketing of the brand helped her save some cash, but she will not cover the cost of lost sales of the US market this winter, which could have a long -term impact on the business.
Moving Australia manufacturing to make Trump China rates is an option either.
Bikini Tops Armyropoulos designs are similar to Brazes and require specific technical skills to produce; Technical skills that are currently not available in Australia.
If I wanted to produce the same designs in Australia, you would have to invest a fortune in the creation of a factory, buy machinery and train a completely new workforce.
It is another cost that cannot afford a small business.
Not to mention that Argyropoulos has a working relationship with its Chinese manufacturer and does not want to leave them without work.
Argyropoulos fears that the situation only gets worse in the coming months.
Small businesses that manufacture products in China and depend on the US.
RAQ sales have not recovered since Argyropoulos closed the US website.
Now he focused on his focus on the United Kingdom market and, although he expects the brand to help overcome winter, there are no guarantees.
“You can’t simply turn on that at night,” he said.
“I am trying to stay optimistic that there are other markets out there, and I am trying to concentrate on what I can control [but] I don’t know if I can create a market out of nowhere. “
