The great push to Jan 20th.

This is a shout out to fellow Canadian business owners preparing for the potential (real?) threat of tariffs coming into play Monday Jan 20th. This is also a shout out to the amazing team at Soak Wash Inc. who have worked tirelessly over the last month (including through the holidays) exceeding targets and goals moving as much goods as humanly possible across the border into the United States for our customers (D2C, B2B and distributors) over the last month.

For my colleagues who keep asking what I ‘think’ is going to happen with tariffs, I assure you that if I had those kind of prediction skills I would be much richer and not in CPG. I’m not ignoring you, I’m just focused on work.

I believe our team has done everything possible to mitigate risk. As an on-demand and in-stock business, there’s only so much we can do. We’ve offered up informative newsletters, coordinated with sales agents and done our best to answer questions we cannot answer.? And we’ve shipped a boat load of Soak.

Most importantly, we have explained over and over how for the last almost 20 years, we’ve ‘done the border work’ for our US customers. It was always what Canadian companies had to do. Need to do. Still do. Isn’t it? We are our own exporter/ importer. Soak is ‘made in Canada’ (from bottles, to labels to the liquid itself) and crosses into the US duty free (for now). We coordinate large twice-weekly shipments across the border and absorb the expense of brokerage (and other) fees through consolidated shipments, taking the complicated work of crossing into another country of the plate of our customers. Their orders appear to 'originate' in NY State, even though they actually come from our Canadian head office and manufacturing facilities and warehouse. Made is Canada is great, but cross-border paperwork isn’t. I should also mention that I get regular requests from global colleagues asking how they could/ would/ should export products- both into Canada and into other countries. The work to export or import is real, and it is often confusing and forgotten (or at minimum undervalued).

Soak Wash Inc. is almost 20 years old and is distributed beyond the US. Nevertheless, the US is a large percentage of our business. I am an expert on market penetration and displacing competitors. I’ve done a lot of that. I understand exactly why consumers prefer Soak and have worked tirelessly to make it so over the years. I believe they are loyal to our products, yet also price sensitive. As an evergreen product, we don’t often have ‘newness/ next season/ the next collection’ to compensate for pricing increases. What will be the tipping point for them to flip brands?

So here we are, the last business day before January 20th. By end of day we’ll have done three separate, giant cross-border shipments this week. We’ve hit our end-Feb sales targets (with 6 weeks to go) and are bracing for what some (most?) believe to be an incoming tariff war.

I worry that our US customers aren’t going to understand that it isn’t our fault, our making or our choice if we need to make pricing changes, or have additional handling fees to cover some or all of potential tariff costs. They also won’t understand that our brokerage fees will go up, because the brokers will have to administer the tariffs, and our accounting costs will increase as we account for the additional expenses or revenue. None of this will matter if our US competitors use the tariffs against us. If our customers flip to a US based brand, how much will it cost in time and money to get them back? I guess that’s what the incoming government wants?

Also, who is covering the cost of this mental load, this stress that we business owners are carrying? How will that factor into government support? I am already starting to get targeted ads for ‘how to manage tariffs and succeed as a business’. I clicked one out of curiosity. Their first suggestions were around cost cutting and trying to save on manufacturing. Do they live in this world? The one coming off the heels of a pandemic? I’m pretty sure we’ve already been dealt the ‘save costs, cut expenses’ card, played it and are still recovering from the last five years.

I have no idea what our government is going to actually do to support us over the next while.? I am appreciative of the newly formed ‘Canada-U.S. relations council’ and appreciate that the government is preparing counter-tariffs. I’m just not sure what they’ll be able to do for all the small business owners. How do those of us who aren’t in a key trading sector, or who aren’t massive organizations sort this out?

This week, an era comes to a close. I’m trying to take deep breaths and keeping my focus on things I can control in business and my world. Next week is out of my control. I have done the best that I can, with the little real information we have.

If you’ve made it this far, I thank you. I hope you know you aren’t alone, working through this chaos.

I would love to know how you’ve prepared your business for the coming months (years?!) as well. Let’s stay in touch. I think we’re going to need a new support group for this one. Stay Soakworthy. -j.

Jacqueline Sava (she/ her)